Two emerging market mobile giants reported third-quarter earnings this week, but while net profit almost doubled at Egypt-based Orascom Telecom, rival Zain saw profit halve due to currency fluctuations and network expansion costs. Orascom reported net profit of US$180.9 million in the quarter, compared to US$90.5 million in the year earlier period, which it attributed to a recovery in local currencies in markets such as Algeria, Pakistan and Tunisia. The profit beat most analysts’ forecasts. Net revenue for the first nine months of 2009 was US$3.765 billion, down 1.9 percent, while the operator’s total subscriber base grew 12.1 percent year-on-year to reach 89 million. “The performance of Orascom Telecom in the first nine months of 2009 has seen an improving trend over the course of the year as local currencies in most of our key operations have stabilised against the US dollar after the sharp devaluation of the currencies in Algeria, Pakistan and Tunisia,” said Orascom chairman Naguib Sawiris (pictured) in a statement. It was also announced that Orascom’s COO Khaled Bichara has been promoted to CEO, a role Sawiris will now relinquish to concentrate his efforts on future growth. “I believe that the telecom market will see massive consolidation during the coming years, and with the new structure I will be able to devote more time and effort in this direction,” he explained.

Meanwhile, Zain disappointed investors yesterday by reporting weakening net income of KWD41.2 million (US$144.4 million), down from KWD87.2 million a year earlier. Currency changes reduced profit by US$130 million, the firm said. However, consolidated revenue for the first nine months of the year rose 24 percent to KWD1.78 billion (US$6.3 billion). “The global economic crisis, unfavorable foreign currency fluctuations, particularly in many of our African operations coupled with reduced interest income and investment income plus higher financing costs, have had a significant impact on the company’s overall profit,” said CEO Saad al-Barrak in a statement. He also pointed to the costs in launching two new networks (in Saudi Arabia and Ghana) and increased fixed costs as a result of network expansion across many of Zain’s markets. Analysts were alarmed at the fall in profits. “The earnings are very weak,” Irfan Ellam, an analyst at Al Mal Capital PSC, told Bloomberg. “Our thoughts are that capital expenditure has been financed by increased debt.” One of Zain’s main shareholders – Kharafi Group – is currently leading the process of selling a 46 percent stake in the Kuwaiti-based firm.