Bahrain Telecommunications (Batelco) and Kingdom Holding have signed a non-binding term sheet with Zain Saudi as part of their $950 million purchase of a quarter-stake in the operator, the bidders said Wednesday. The term sheet follows a similar agreement between Batelco, Prince Alwaleed Bin Talal's Kingdom Holding Company (KHC) and the seller of the stake, Kuwait's Zain, which was signed in April. On July 13, Batelco's chief executive Peter Kaliaropoulos told Reuters he expects the deal, which was initially agreed in March, to be completed within eight weeks. Zain Saudi Sunday reported a second-quarter net loss of SR448 million, compared with a net loss of SR632 million a year earlier. The operator, which launched services in 2008, had a 16 percent share of Saudi Arabia's mobile subscribers at the end of 2010, leaving it a distant third to rival carriers Saudi Telecom Co. and Etihad Etisalat (Mobily). Batelco reported Wednesday an 11.2 percent drop in second-quarter net profit, its fifth straight quarterly decline, as customer costs in its home market rose amid stiffening competition. Batelco made a half-year net profit of 38.8 million dinars. Gross revenues were 163.2 million dinars, down 4 percent from a year earlier, it said in a statement. Batelco is one of the smaller telecoms operators in the Gulf Arab region with a home market of about 1.2 million people in which it faces rising competition from bigger rivals Kuwait's Zain and Saudi Telecom (STC). "Mobile and broadband operators in Bahrain continue to add new customers; however, revenues per customer are declining whilst costs to acquire and retain customers are growing," said chief executive Peter Kaliaropoulos. "In a highly penetrated market for mobiles and broadband with three mobile operators, this is a natural competitive consequence." This squeeze has pushed Batelco to expand overseas, with foreign operations accounting for 37 percent of revenues in the first
