Saudi Telecom Co. (STC) said Tuesday its third-quarter net profit slipped 20 percent compared to the same period a year ago, dragged down by investments in its foreign affiliates. The company, the second largest to be publicly traded on the Saudi stock exchange, said net profits totaled SR2.4 billion ($640 million) in the three-month period ending in September, compared with SR3.01 billion in the same period in 2008. STC said in a statement the decline in profits came because of investments in overseas affiliates, particularly in Turkey, India, Kuwait and Indonesia - cash outlays tied to setting up new networks and upgrading existing ones. STC's chief executive, Saud Bin Majed said the telecom giant is currently investing broadly in all its affiliates in order to boost market share and earnings overseas. Operating revenue climbed to SR37.75 billion in the first nine months of 2009 versus 35.14 billion in the same period the previous year - a gain of 7 percent, the company said. STC's share price was down 4.6 percent to SR49.6 riyals on the Saudi bourse by early afternoon. Likewise, Zain Saudi Arabia posted a 26.3 percent rise in its net loss for the third-quarter due to growing costs of operations and marketing, 13 months after starting operations in the Saudi market. The firm, in which Kuwait-based Zain holds a 25 percent stake, made a net loss of SR820 million ($218.7 million) in the three months to end-September, up from SR649 million a year earlier, it said in a statement. The firm attributed the rise in the loss to the growing costs of depreciation, operations and marketing. Revenues increased to SR825 million in the third-quarter, up from SR701.5 million in the second quarter of 2009 and SR81 million during the third quarter of last year. The company started operations in August 2008. “The firm has realized a new breakthrough in the growth of its market share during this quarter by grabbing more than 15 percent of the volume of the mobile telecommunications market in the Kingdom,” it said. A company spokesman later clarified that Zain Saudi Arabia reached 15 percent market share of overall mobile phone users in the Kingdom. Zain Saudi had 4 million active users at the end of June, he said. There are no official figures on the number of mobile phone users in the Kingdom, but industry analysts say they exceed the country's 25 million population, with some 70 percent of them being active users.
