Operator group Zain said its results were impacted by continued instability and tax issues in Iraq, with “intense price competition” also affecting key operations.

Asaad Al Banwan, chairman, said: “It is pleasing to report growth in several of our key financial metrics for the second quarter and six-month periods, given that Zain Group is exposed to conflict zones and currency fluctuations that continue to impact the growth potential of our business.”

Quarterly net income of KD45 million ($148 million) was up 14 per cent year-on-year, on revenue of KD275 million, down 3 per cent. For the first half, net income increased 2 per cent to KD82 million ($272 million), on revenue of KD552 million, down 2 per cent.

The company ended the period with 45.2 million active customers.

Data contributed 22 per cent of total group revenue in the first half, with the company citing a focus on “leveraging 4G networks”. Zain Sudan launched LTE, the technology’s debut in the country, marking the sixth Zain operation to introduce it.

Iraq troubles
With regard to Iraq, continued instability plus the introduction of a 20 per cent sales tax on mobile services, as well as “wide-ranging tax increases on other sectors in the country”, are affecting spending on mobile services. H1 net income more than halved to $24 million, on revenue which decreased 11 per cent to $536 million.

Scott Gegenheimer, CEO, said: “The severe impact of ongoing civil instability in Iraq is a concern for us, both from the perspective of the human suffering that it causes, but also due to the detrimental impact it has on our business. The sales tax instituted in the country also had a determined negative effect on our overall financial results, though we remain optimistic that the strategy we have in place is the correct one for our circumstances.”

For its home market of Kuwait, Zain noted “a very challenging six month period that witnessed intense price competition impacting its financial performance”.

Gegenheimer said: “We are actively seeking and securing sources of incremental revenue in the digital space including enterprise M2M services and smart city solutions to governments and mega real estate projects across the region. We have entered into several strategic partnerships recently, which we strongly believe will fast-track and further enhance our ambitions to unlock many lucrative opportunities in the connected society revolution.”