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Mobile Telecommunications Company Saudi Arabia (Zain) signed an agreement with the Ministry of Finance, the Ministry of Communications and Information Technology, and the Communications and Information Technology Commission (CITC), the company said in a bourse filing on Sunday.
The agreement includes the consolidation of the annual royalty fee and reduces it to 10 percent from 15 percent of net revenues starting from Jan. 1, 2019.
It also includes settling the disputed amounts between Zain Saudi and CITC regarding the payment of the commercial service and the annual license from 2009 to 2017. The company will invest in the infrastructure according to the terms and conditions over the next three years.
The company noted that the expected financial impact of applying the unified royalty fees from Jan. 1 to Sep. 30, 2018 will result in a decrease of SAR 220 million.
“This amendment will be reflected in the next financial results, anticipating a positive future financial impact of reducing the fees for commercial service delivery,” the statement added.
In addition, the expected financial impact from the settlement of the disputed annual royalty fees from 2009 to 2017 is expected to reach SAR 1.7 billion over the next three years, by implementing the terms and conditions of the Settlement Agreement with the CITC for investment in infrastructure, it further said.
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