Zain KSA posts positive financials in 2020 despite challenges, eyes new qualitative sectors: CEO

Sultan AlDeghaither, CEO of Zain KSA

Mobile Telecommunication Company Saudi Arabia (Zain KSA) reported positive financial results in 2020, despite the COVID-19 challenges, CEO Sultan AlDeghaither told Argaam in an exclusive.

In 2020, the telecom operator maintained its profitability for the fourth consecutive year.

AlDeghaither added that he is optimistic for 2021, backed by the company’s strategy, which will be a new chapter in its history.

Zain KSA aims to strengthen its presence in new qualitative sectors that shape the future of innovation in the Kingdom’s fintech industry through providing various solutions that support the government digital financial transformation.

The company continued to inject investments and launch initiatives to expand its network across the Kingdom, he explained.

Moreover, Zain KSA, backed by its strong financial position, voluntarily repaid SAR 4.9 billion of its debt in installments from Q3 2018 until the end of 2020, AlDeghaither noted.

Here’s the full interview with Sultan AlDeghaither:

How do you evaluate Zain KSA’s performance and sales in 2020?

Despite the COVID-19 challenges in 2020, Zain KSA reported not only positive, but qualitative results on all levels.

Financially, the company maintained its profitability for the fourth consecutive year. Revenue rose to SAR 2.061 billion in Q4 2020, a growth of 6.90%, compared to SAR 1.928 billion in Q3 2020.

Zain KSA reduced the 2020 accumulated losses by 96.6% to SAR 54 million, from SAR 1.608 billion in 2019. On the operational level, 2020 witnessed the success of the company’s expansion strategy, which was adopted for the interest of shareholders and the development of the Kingdom’s telecommunication sector.

This strategy helped us overcome the great challenges faced by most sectors due to the COVID-19 pandemic, and also helped it accomplish qualitative investments, even at the most difficult times. Zain KSA rescheduled its Murabaha agreement, restructured its capital, injected more investments to enhance the quality of its services through its Zain Cloud service, dedicated to businesses, SMEs, entrepreneurs, and government sectors in partnership with AliBaba Cloud, one the world’s largest cloud computing companies.

The company also boosted investments in human cadres, mainly “women empowerment”. We became the first and sole operator in the telecommunications sector. Women representation at Zain KSA’s leadership hit 70% in 2020, when compared to 2019. The employment rate of women at the company also rose by 50% when compared to 2019.

Zain KSA achieved quantum leaps in all services last year, ranking as the local market’s first telco in terms of fixed internet speed, 5G deployments across the Kingdom, based on the CITC Meqyas report for the fourth quarter of 2020.

Moreover, Opensignal announced in a recent report that Zain KSA won all three awards of the Saudi Arabia 5G User Experience report on Best 5G Download Speed, Best 5G Availability, and Best Download Speed Experience - 5G Users. Ookla’s Speedtest website — known for measuring internet speed globally — also declared Zain KSA the fastest fixed internet in Saudi Arabia. Zain KSA scored a triple triumph at the Telecom Review Excellence Awards 2020. The pioneering telecom provider was recognized in three separate categories for ‘Best 5G User Growth’, ‘Best Cloud Provider’, and ‘Best 5G Infrastructure Deployment’.

How do you see the company’s performance in the first half of 2021?

The telecom operator continued to inject investments and launch initiatives in order to expand its network across the Kingdom. We will build on the milestones achieved during 2020 to provide the best and most advanced services. It will also continue to expand the 5G coverage to provide the best user experience.

We aim to strengthen its presence in new qualitative sectors that shape the future of innovation in the Kingdom’s fintech industry through providing various solutions that support the government digital financial transformation.

We are optimistic for 2021, backed by the company’s strategy, which will be a new chapter in the company’s history. The company aims to be the digital services provider of choice in the Kingdom.

What about the voluntary payments made by Zain KSA to repay its Murabaha facility in the last few years?

Zain KSA, backed by its strong financial position, voluntarily repaid SAR 4.9 billion of its debt in installments from Q3 2018 until the end of 2020.

The first installment was paid at SAR 600 million in Q3 2018, the second at SAR 525 million in Q4 2018, the third at SAR 300 million in Q2 2019, in addition to another installment worth SAR 675 million in Q2 2020. Zain KSA also repaid SAR 2.8 billion in H2 2020 from its rights issue proceeds.

Did Zain KSA waive any accounts receivable to Etihad Atheeb Telecommunication Co.?

No.

The company invested almost SAR 2.9 billion in the 5G network. How many telecom towers were developed by the company under the 5G network in this year? And how many towers are expected in Q1 2021?

Zain KSA continued to inject investments to expand its network across the Kingdom. The 5G network was extended to 50 cities with more than 4,700 towers. Zain KSA’s 5G geographical expansion is based on a clear strategy that aims to expand coverage to the entire Kingdom.

The company is keen to provide its clients with the most accurate information about the 5G coverage through detailed interactive maps on its website.

What are the latest updates about the company’s talks with Mobily on telecom towers? What is the investment business model and when do you expect it to start?

In 2019, Zain KSA terminated an agreement to sell and lease back the passive physical infrastructure of its mobile tower portfolio to Mauritius-based IHS Holding at a total value of SAR 2.5 billion, due to regulatory reasons. Since then, Zain KSA joined Mobily to look for the best options for both companies in this regard, but no deals have been signed to date.