Strong subscriber growth bolsters MTC profits

15 Feb 2005

Kuwait-based mobile operator MTC-Vodafone chalked up 3.192 million active customers in five countries at the end of 2004, up from 1.92 million the previous year, while its consolidated revenues reached USD1.1 billion from USD891 million. MTC ended the year as the leading wireless operator in Kuwait and Jordan, where it operates under the Fastlink banner, with 1.26 million and 1.14 million subscribers respectively, and reported significant gains in Bahrain where, a year after launching commercial operations it boasted a 16% market share and 105,068 users. Elsewhere, the regional operator reported 244,338 mobile subscribers to its MTC Atheer Iraq unit, following a commercial launch in March, and 441,211 customers for MTC Touch Lebanon (formerly LibanCell).

Strong subscriber gains helped drive up net income by 18% to USD410 million, while consolidated EBITDA for 2004 improved by 14.55% to USD598 million. On a less positive note, the EBITDA margin of 54.4% was a slight decline on the 58.3% figure reported in fiscal 2003. Commenting on the results, the Group’s Director General Dr Saad Al-Barrak said that the company’s subscriber base grew by 29.42% in Kuwait, helping the unit secure a market share of 60%, up 3% year-on-year, in a country where cellular penetration is running at close to 85%. In Jordan, MTC subsidiary PELLA (Fastlink) reported a market share of 71%, after boosting its customer base by 22.6% in 2004. The gains came despite increased competition in Jordan: the country has three network operators and a fourth is due to launch in June 2005. The Group’s fledgling Iraqi venture MTC Atheer also performed well thanks to the popularity of its pre-paid services; more than 99% of all users take this option. The parent company is committed to improving network coverage in 2005 and hopes it is well positioned to expand beyond the Southern region of the country into Central Iraq.

MTC Touch Lebanon is the most recent addition to the MTC Group. In April 2004 MTC and Deutsche Telekom-owned consultancy DeTeCon won the contracts to manage the country’s domestic wireless operators LibanCell and Cellis respectively from 1 June that year. Each company agreed deals to charge the government a fee of around USD200 million for a four-year term, during which both undertook to improve network performance, increase subscriber numbers and introduce new services – hopefully putting them in a prime position for when the government next attempts to privatise the networks. Following seven months of operations, MTC Touch served more than 411,000 subscribers, up from the 385,000 the cellco reported in September 2003.

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