Saud Al Daweesh, STC Group CEO
STC announced its consolidated financial results for the period ending 30/06/2011 where the 2nd quarter revenues increased to SR 13,880 million compared to SR 12,591 million for the corresponding quarter last year with an increase of 10%, the increase is mainly from increased contribution from Broadband in the local market & growth in international operations. Operating Income for the quarter reached SR 2,783 million compared to SR 2,345 million for the corresponding quarter last year with an increase of 19%.
Earnings before interest, taxes, zakat, depreciation and amortization (EBITDA) for the 2nd quarter amounted to SR 5,086 million compared to SR 4,504 million for the corresponding quarter last year with an increase of 13%, and for the 6 months amounted to SR 9,900 million compared to SR 8,964 million for the corresponding period last year with an increase of 10%.
Net income for the 2nd quarter amounted to SR 2,256 million compared to SR 2,062 million for the corresponding quarter last year, with an increase of 9%, and compared to SR 1,573 million for the immediately prior quarter, with an increase of 43%.
The increase in net income for the quarter comparing with the corresponding quarter last year, is attributed to the strong growth within the domestic Broadband (fixed & mobile) and content revenues, in addition to the growth in revenues from international operations.
STC’s earnings per share for the 6 months amounted to SR 1.92 compared to SR 1.92 for the corresponding period last year. The Board has adopted the distribution of SR0.50 per share for Q2, 2011 which represents 5% of the share par value. The distribution of SR 0.50 to the registered shareholders at the close of the market on the 27th of July and payment will be made on Wednesday the 10th of August.
Group CEO Eng. Saud Al Daweesh stated that this continuous increase in the Group’s revenue is mainly attributed to strong growth within the domestic operations revenues as a result of increased broadband customers (fixed & mobile), where STC is the only company offering packages that are inclusive of voice, internet and digital television. Currently, there are more than 11million internet users where the company’s internet traffic, encompassing all technologies, surpassed 1,600 terabytes accounting for around 90% of the Kingdom’s traffic. In addition, international operations, where the percentage contribution of revenue increased to 34% as a result of STC Group affiliates and Subsidiaries acquiring increased market share. These subsidiaries & affiliates will continue investing in expanding their existing networks and deploying advanced 3G networks.
Domestically, revenues grew as a result of broadband, data and content services, where STC is the only company that can provide multiple, integrated and comprehensive solutions for internet users in the Kingdom. This was achieved through broadband networks, fixed or mobile, using various modern world technologies (DSL, FTTH, 3G, HSDPA + and soon LTE).
Also STC, as the first telecom operator in the Kingdom to launch an internet package at 100 MB for the home, allowed the introduction of an interactive TV package, Invision. Where the Subscribers to this service have increased by 717% during the first half of 2011, mainly as a result of the company having the largest protected fiber optic network in the region. This network covers more than 130 thousand kilometers and includes all cities, villages and roads within the Kingdom, where the network links to the largest operators worldwide, through several routes.
In addition, it is the largest network in the region that links through submarine and terrestrial cables that extends both east and west. It should be noted that the number of subscribers of fixed broadband increased by 15% compared to the same period last year, similarly, the number of VERVE subscribers increased by 309% since the beginning of 2011. In terms of service excellence STC is providing a substantial internet service that will ensure that homes have the latest applications that are available, this will ensure that they are ‘smart homes’ and that they fulfill all the families requirements, such as browsing, gaming networks, interactive video communications as well as view television channels that display content in 3D, and HD, e-learning and e-health services.
Furthermore, STC keeps its customers linked via more than 2,000 Wi-Fi ‘hot spots,’ that is offered exclusively and free of charge to DSL, VERVE and broadband packages.
With regards to ALJAWAL, the first half of 2011 experienced an 83% increase in Broadband revenue compared to the same period last year and postpaid revenue increased during that period as a result of the increased sale of smart phones and usage. In addition, during the 2nd quarter, mobile subscribers have increased by 8% compared to the same period last year, as a result of the efforts to develop excellent loyalty programs and offering customers new postpaid packages where network coverage has reached 99% of roads and populated areas. In all cities and remote areas STC provides wireless broadband services, at speeds of up to 42.2 Mb/s.
STC now leads the smart phone market by providing the Samsung Galaxy S2, Motorola Zoom and exclusively the HTC Desire HD and also provides the best packages in Saudi Arabia for the iPhone 4. STC continued with the development of content services that serve more than six million customers, to become the major content provider and ensuring that the offering suits all segments of society and meet the diverse requirements of all customers. The company continued to invest in modern applications being one of the most important features in the very competitive domestic market, where the development of many applications for Saudi Arabian communications were posted on the Apple Store.
Also STC continued to launch exclusive applications to facilitate innovative access to social networking sites. In addition, the company continued to make offers to post and prepaid mobile phone subscribers with saving package keys. More recently STC launched a fifth key for students. In order to coincide with the holiday season, the company has provided a variety of services to assist customers when traveling abroad, for example, providing the internet free to Blackberry subscribers while roaming, and the ‘open’ package with roaming to surf the internet abroad, without limits. In the context of continuous development and as a priority, that we offer our customers outstanding service, the company launched the ‘Tamayouz interactive’ free, which enables the client to know the details of the program and concierge services.
With regards to the Enterprise sector the company has strengthened its position where, during the second quarter, the company launched several services, such as Telemetric solutions for utilities companies to take meter readings that enables the customer to shift from the traditional manual way to electronic data reading, using Telemetry or M2M, through the use of the mobile network. In addition the sector has just launched recently A’AMAL LIGHT package which includes data and voice solutions from one source to address the medium size business. Also launched, the mobile service POS (Point of Sales), which is characterized by its ability to carry out procurement through a network of Saudi Arabian payments (SPAN) using mobile technology, and also launched the business Quick Net that allows a customer to surf the Internet and e-mail at speeds of 42 Mb/s.
In addition, the Golden Bulk messaging service is specifically targeted for customers in banking and key accounts, to enable them to send the largest number of messages, at the same time, with high speed and accuracy. Furthermore, STC has implemented a number of mega projects worth billions of riyals which will contribute to the development of the sector and strengthen the company’s market share and financial position.
The second quarter marked the introduction of the LEAD Strategy, a new strategy for STC that will cover the period 2011 - 2013, which was the result of careful reading of the future of the market, the telecommunications industry and information technology, as well as the announcement of the new Group organization structure in accordance with this strategy.