Saudi Telecom Company (STC), has announced that its second-quarter net profit fell 31% to SAR2.06 billion (USD548.3 million) from SAR2.99 billion in the corresponding period last year. STC saw its operating income fall 27% year-on-year to 2.35 billion, slightly below its level in the first quarter of this year. The state-controlled firm’s net income of SAR2.06 billion fell within a SAR1.6 billion to SAR2.41 billion range predicted by five industry analysts selected by Reuters.
Although STC declined to comment on the fall in quarterly earnings, it suggested that the 31% drop in net profit was down to a rise in capital expenditure in its foreign investments, lower tariffs for international calls and higher spending on fibre-optic deployment. Since 2007 STC has spent in the region of USD7 billion to consolidate its foreign presence, most notably in Asia. In the meantime, its domestic market has opened up to more players, intensifying pressure on the incumbent.