Thursday 20 December 2018
Positive Financial Impact of 220 Million SAR during the First 9 Months of 2018
Zain SA has announced the signing of an agreement with the Ministry of Finance, the Ministry of Telecommunications and Information Technology and the Telecommunications Commission. The agreement entails the unification of the annual commercial costs for services, reducing them from 15% to 10% of the Telecommunications net revenues, starting 01-01-2018. Additionally, the agreement includes a final settlement of the monetary disputes between the company and the Telecommunications and Information Technology Commission regarding the costs of commercial service along with the annual payment of the 2009-2017 license. Moreover, the company will have to carry out its infrastructural investments in accordance with the terms and conditions of the aforementioned agreement during the next three years.
The company anticipates that this agreement would have a positive financial impact on the company in the form of a reduction in the financial costs by 220 million SAR in exchange for a commercial service from 01-01-2018 to 30-09-2018. This positive impact will also be manifested through the company’s future financial results. The company also estimates that the settlement with the Communications and Information Technology Commission from 2009 to 2017 will yield up to 1.7 billion SAR during the next three years through the implementation of the terms and conditions of the infrastructural investment’s settlement agreement.
For his part, Prince Naif bin Sultan bin Mohammed bin Saud Al Kabeer, Chairman of Zain Saudi Arabia, expressed his immense gratitude to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, and His Royal Highness Prince Mohammed bin Salman bin Abdul Aziz, the Crown Prince, Vice President of the Council of Ministers and Minister of Defense, for supporting the Telecommunications and Information Technology sector through effective partnership with the Kingdom's Telecom operators. This will promote the competitiveness of the Kingdom's economy, contributing therefore to its prosperity as one of the most fundamental pillars of the 2030 Vision.
Prince Naif also thanked HE Mohammed Aljadaan, the Minister of Finance, HE Abdallah Al Sawaha, the Minister of Telecommunications and Information Technology, and HE Dr. Abdulaziz Salem Al Ruwais, Governor of the Communications and Information Technology. Commission (CITC), for all their efforts to finalize this agreement.
Similarly, Sultan bin Abdulaziz AlDeghaither, Chief Executive Officer of Zain Saudi Arabia, imparted his thanks and gratitude to the wise leadership represented by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz, and His Royal Highness Prince Mohammed bin Salman bin Abdul Aziz, the Crown Prince, Vice President of the Council of Ministers and Minister of Defense, for their support and empowerment of the Telecommunications and Information Technology sector to upgrade the Telecommunications infrastructure across the kingdom. He also thanked the government, mainly the Ministry of Finance, Ministry of Communications and Information Technology and the Telecommunications and Information Technology Commission.
AlDeghaither also stated that "At Zain SA, we are actively working on implementing the board's strategy to improve our financial statements in order to create a greater shareholder value through innovation, a more developed product and to ensure continued improvement of customer service. This agreement is a mere extension of the positive results we have achieved recently, considering we have already announced the board's approval to sell the structure of the company’s towers for 2.43 billion SAR, which- in turn- will repay the company's debts. We already paid 600 million SAR for the Murabaha financing agreement, thereby reducing the financing burden."