MANAMA, (Reuters) – Saudi Telecom Co (STC) said on Monday the global financial crisis had created opportunities for acquisitions it would focus on expansion in the Middle East, Gulf and Asia while adding customers at home.
Saud al-Duweish, chief executive of STC, the second-largest Arab telecom company by market value, said mobile telephone penetration in Saudi Arabia was likely to surge to 140 percent in the coming two years.
Facing competition from two new mobile telephone operators, STC expected its revenues to grow at the same pace as they did in 2008 as it taps into a growing market among Saudis for broadband Internet and enterprise services, Duweish said.
“The international financial crisis is an opportunity to get acquisitions and licences,” Duweish said on the sidelines of an event in Bahraini capital, Manama. “Our priority is the Gulf, the Middle East and Southeast Asia.”
Shares of STC bucked a downtrend on Saudi Arabia’s main index .TASI on Monday, rising 1.39 percent at 1019 GMT.
Economists have said the economy of the world’s top oil exporter would grow by no more than 1 percent this year and some are expecting it will shrink as oil prices collapse during a global financial crisis.
Saudi Telecom, which posted a 62-percent drop in fourth-quarter profit, has faced stiffer competition in its home market as it competes with rivals Zain and Etihad Etisalat (Mobily).
As part of its strategy to diversify revenues, STC has expanded into new regional and Asian markets by buying stakes in Malaysia’s Maxis, Oger Telecom and led a consortium that won a third mobile phone licence in Kuwait.
STC — which stands to lose a domestic fixed-line monopoly this year — also won Bahrain’s third mobile telephone licence.
However Duweish said growth potential in its home market, of about 25 million people, was still strong.
“We think (mobile) penetration will reach 140 percent over the coming two years,” he said, adding that demand for broadband Internet was likely to continue growing “at the same rate” for the next five years.
“This is a growth area where all operators will try to grab this opportunity,” he said.
The enterprise market was also “still under penetrated”, he said.