Mobily sees growth in all segments; continues to expand market share: CFO

Khaled Abanami, CFO of Etihad Etisalat Co. (Mobily)

Etihad Etisalat Co. (Mobily) reported growth in all its segments in the third quarter of 2023. The business segment was the largest contributor to revenue growth, in line with the general trend of the telecommunications sector in the Kingdom, Chief Financial Officer (CFO) Khaled Abanami told Argaam.

He explained that the revenue growth came from digital, government and mega projects, in addition to the digital initiatives unveiled with the company's strategic partners and SME clients.

The growth in this segment is supported through digitization and product innovation, Abanami added, noting that the company's developed infrastructure has enabled it to meet growth requirements and gain market share.

Abanami pointed out that the business segment is a key driver for growth in the coming years, as the company's strategy focuses on how to benefit from infrastructure and investments to maximize returns by increasing its market share.

Mobily's market share continues to increase on a quarterly basis, he added.

Below are the interview details:

Q: Mobily’s profit increased 44.1% to SAR 524 million in Q3 2023 from SAR 373 million in Q3 2022. How do you see these results?

A: During the third quarter of 2023, Mobily succeeded in registering the highest level of net profit for the third quarter in the past 10 years due to its commitment to achieving its strategic goals to transform into a leading company in the technology, media and telecommunications (TMT) sector, as it was able to report revenues growth in all segments. This growth was supported by the boom in the business segment, an increase in the customer base, in addition to the higher earnings before depreciation and amortization, Murabaha interest and Zakat expenses (EBITDA).

The company's efficiency in managing its operations and the growth of financing income contributed positively to these results, despite the increase in financing costs to SAR 162 million during the quarter due to high interest rates. The company also focused on maximizing customer experience and shareholders’ returns, which impacted net profit during the period.

Q: Which segments contributed the most to the company's revenue during the third quarter?

A: Mobily achieved growth across the board, but the business segment was the top contributor to higher revenue this quarter, in line with the overall growth in the Saudi telecommunications market. This surge comes from digital, government and mega projects, in addition to the digital initiatives with our strategic partners and SME clients.

Growth in this segment was supported by digitization and product innovation, as the development of the company's infrastructure enabled us to meet our growth and market share requirements. Meanwhile, distinguished services have contributed to several promising partnerships and attracted new partners, particularly from government agencies and the SME category. This segment is not limited to providing wireless or fixed connectivity, but also includes cloud computing services, data centers and other services with business partners. These factors drove Mobily's market share to grow further every quarter.

The business segment is a key driver for growth in the coming years, as the company's strategy focuses on leveraging its infrastructure and investments to maximize returns by increasing market share. We believe there is much room for Mobily to achieve this in the future.

Q: What was the size of projects in the third quarter, and what are the company's plans and expectations for the upcoming projects?

A:  Mobily maintained effort to invest in digitization, infrastructure development, expand 5G deployment, invest in the Internet of Things (IoT), and expand fiber optic network coverage (FTTX), with capital expenditures reaching SAR 949 million for the first nine months of 2023.

We believe that there is great potential for growth in this sector, as a result of government initiatives aligned with Vision 2030 and Mobily's ability as a key enabler of digital transformation, which provides ample opportunities for the growth and development of the telecommunications sector in the Kingdom. We currently have many projects underway, particularly those related to digital transformation across many fields, such as business, IoT, 5G, and other modern technologies that will support future growth opportunities. 

Q: Does Mobily plan to increase the number of its towers, or rather sell these towers? 

A: At Mobily, we always strive to improve and expand the network. This is not limited to towers, but covers enhancements in various fields. Mobily was recently crowned with the LEAD Awards for Customer Experience Excellence presented by SAMENA Telecommunications Council, in addition to receiving the Best Customer Experience Award for 2022 for the second consecutive year by the Communications, Space & Technology Commission (CST).

Concerning the towers, we continuously evaluate the offers to achieve the best return for the company and its investors, raise the participation rate in telecommunications towers, achieve maximum efficiency, and upgrade the communications and information technology system with the support and supervision of CST. Any material developments will be announced in due course. 

Q: What are your expectations for the fourth quarter earnings? Will it be better than the previous quarter? 

A: The macroeconomic environment is currently favorable for growth, with the support of our wise government, as GDP is likely to grow, in addition to expectations of an increase in population, a recovery in tourism and a surge in the number of giga projects in the Kingdom. Mobily will continue its effort to grow further and provide services at a high and advanced level, achieving its strategic ambition and creating added value for its shareholders, which, in turn, will contribute to improving the company's overall performance and improving profits for 2023.

Q: What are the company’s activities that support social development in Saudi Arabia?

A: Mobily always strives to positively impact in all aspects of its business by applying the highest social standards and investing in the community. This principle is a key to all our business as a company, employer and supporter of the sustainable social and economic development.

Mobily's sustainability and ESG program aims to develop and continue to deliver multiple initiatives and create value-added community partnerships for all stakeholders. The community policy evaluates opportunities based on the company’s sustainability goals, strategy and values.

Mobily will continue to enable the rapid technological development of communities across the Kingdom through outstanding digital platforms and services. It will also seek to take advantage of several opportunities and participate in a range of programs to support youth employment across the Kingdom.