Batelco maintains leadership in Bahrain, region

Shaikh Mohamed Bin Isa Al Khalifa Batelco Group CEO
Batelco Group, which reported a net profit of BD34.6 million for the six-month period ended 30 June 2012, said that it had sustained the leadership patterns in the home market as well as across the six countries where it operates.

Batelco announced earnings of 24 fils per share and an approved interim cash dividend of 15 fils per share.

“While intense competition naturally continues to impact us in Bahrain, we remain pleased with our ability to maintain market leadership and with the overall retention rates for our mobile, broadband and enterprise customers,” Group CEO, Shaikh Mohamed bin Isa Al Khalifa, said, while commenting on the highlights for the period.

“Looking across our regional operations, there was additional progress made in a number of key markets especially Jordan and Yemen. A significant investment was made in Jordan with the launch of the Umniah 3.75G service late in June and strong customer take up of mobile data services is anticipated,” Shaikh Mohammed added.

“While tough competition continues, Batelco successfully remains the leader across the full spectrum of telecommunications services in the Kingdom of Bahrain. Providing value, innovation and exemplary customer care continues to place Batelco at the forefront for high value residential and enterprise customers,” Shaikh Mohamed, said.

“We ended the period with 7M customers across six markets. We are working to build on this. Further organic growth is expected in our overseas operations during the second half of 2012. We are also actively pursuing opportunities to build our network through strategic acquisitions, which will add value and enhance our operational capabilities as we go forth,” Shaikh Mohamed, added.

For the first six months of the year, the Group reported a decline in mobile subscribers of 34% when compared to the corresponding 2011 period. This is largely due to the adjustment for the exclusion of STel operational and customer data. As announced previously, the sale of STel is expected to be completed by the end of October 2012.

“We have continued to work hard to retain our high value residential and business mobile, data and broadband customers and are pleased with the results our efforts have yielded over the past six months. We are especially pleased to see customers utilising our value added services as evidenced by the growth of mobile data subscribers across the Kingdom during the period. This is an area of focus and expected growth for us and we will continue to look for ways to both expand and enhance the user experience for our customers,” Shaikh Mohammed, said.

Normalising for the exclusion of STel, mobile subscriber numbers across the Group for the six-month period was stable year over year. This was in line with expectations and primarily the result of ongoing competitive pressures in Bahrain and the review of the subscriber base in Yemen, which was announced during the first quarter of the year.

On a quarter-over-quarter basis, however, mobile subscriber numbers grew by 2%. This positive trend was supported by progress in Jordan and Yemen in particular, where the Group’s operations continued to strengthen their performance.

Broadband customer numbers for the period were stable for the first six month of the year, growing by 1% year over year and by 2% since the start of 2012.

Jordan: Significant strides were made at Umniah, the Group’s 96% owned subsidiary in Jordan, where 3.75G services were successfully launched in mid-June 2012. Customer response, in just a few short weeks, has exceeded demands for the service. 11,000 new customers have already been added, bringing the Group’s total subscriber base in Jordan to more than 2.3 million. This accounts for 1% growth year over year and a 2% increase quarter over quarter. With the continued rollout nationwide of 3.75G services during 2012, which will ensure faster and more reliable transfer of data as well as well instant Multimedia Services (MMS), even stronger uptake and an increase in subscriber numbers is expected.

Growth was also achieved by Umniah in its broadband customer base. The company posted a strong increase of 33% compared to the corresponding 2011 period and has grown its subscriber numbers by 17% since the start of the year. With the solid uptake of WiMax further expansion of Umniah’s broadband user base is expected to continue.

Kuwait: Batelco’s subsidiary Qualitynet, which delivers total ICT solutions to the Kuwait market, maintained market leadership and steady subscriber numbers for the first six months of 2012 when compared to the 2011 period and quarter over quarter. This totalled approximately 40,000 users of the company’s Data Communications and Internet Services.

Other JVs: Sabafon (Yemen), in which the Group has a minority shareholding, continued to make progress throughout the six month period. Year over year, its customer base of more than 3.5M subscribers remained stable. Importantly, the company registered 4% growth quarter over quarter, effectively reversing a decline in subscriber numbers during the first quarter of 2012 as a result of revisions to its customer base to exclude non-active sim cards. With a marked reduction in conflict in the country and the return to almost normal operating conditions, further expansion of the customer base is anticipated throughout the remainder of 2012.

Atheeb (Saudi Arabia), in which Batelco holds a 15% stake, reported a 15% decline in voice and data services customers for the first half of the year when compared to the corresponding 2011 period and 9% decrease quarter over quarter. Despite a lower number of subscribers, which now stands at 102,000, the company’s revenues increased as a result of the addition of a number of new higher value business customers. This is in line with Atheeb’s recently announced strategic shift which has seen the company turn its focus to the business sector where considerable opportunities exist for customer and revenue growth in the coming periods.

At the end of the first half of the year, Batelco continued to maintain a strong share of the mobile market in the Kingdom. Whilst subscriber numbers decreased minimally when compared to the previous year period, the operation witnessed 74% year-on-year growth in mobile data subscribers.

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