Gulf phone companies see profits surge on global growth

Dubai: The biggest phone companies in the Gulf may say net income surged in the third quarter on global expansion and regional demand, analysts said.

Saudi Telecom Co, the Arab world's largest phone company, may report profit jumped as much as 25 per cent to 3.92 billion riyals ($1.04 billion, Dh3.82 billion) due to higher cellular sales and acquisitions in Malaysia and Indonesia, according to an estimate by Global Investment House KSCC.

Emirates Telecommunications Corp (etisalat), the United Arab Emirates' big-gest phone company, may say profit rose by more than 50 per cent to Dh2.42 billion ($660 million).

"We're very bullish on the Gulf telecom companies,'' Faisal Hasan, head of research at Global, said in a telephone interview.

"These operators are benefitting from regional wealth and demographic profile. The young segment of the population is willing to pay for value-added services.''

Phone companies in the Gulf are expanding abroad to boost sales as domestic markets mature and competition grows. Saudi Telecom bought a 35 per cent stake in Oger Telecom Ltd, which operates in Turkey and South Africa, in April for 9.6 billion riyals. etisalat bought a 45 per cent stake in Indian Swan Telecom for $900 million to service an area covering 900 million Indians.

Qatar Telecom QSC, which provides phone services in 16 countries, will likely say its profit grew 66 per cent to 684 million riyals ($188 million) in the third quarter, according to Global estimates.

Qtel in June bought 41 per cent of PT Indosat, Indonesia's second-biggest mobile-phone operator, for $1.8 billion from Asia Mobile Holdings Pte.