Iraq Instability Weighs on Zain Group

By John Lee.

In its financial results for the six months ended 30 June, 2015, Zain Group gave the following update on its operations in Iraq:

"Zain Iraq launched 3G services at the beginning of the year and is very active in rolling out 3G services across the country that saw data revenues grow 17% Y-o-Y.

"The performance of Zain Iraq has been severely hampered by the escalation of social instability that has seen several million people displaced internally, coupled with Zain Iraq enduring frequent temporary network shutdowns and associated higher network operational costs.

"These exceptional circumstances coupled with intense competition and currency fluctuations, adversely affected the operation’s financial performance, as its revenues for the first six months reached USD 604 million, with EBITDA reaching USD 221 million and net income amounting to USD 60 million.

"The Zain Iraq team is committed to maintaining a resilient and efficient network regardless of the situation in the country and the operator foresees significant growth for all key financial indicators due to mobile data revenue growth given the pent-up demand for broadband services. The operator now serves 12.8 million customers."

Zain Group CEO, Scott Gegenheimer (pictured) noted:

"Although our digital transformation and efficiency drive efforts are well on track across many of our operations, we are disappointed by the severe impact that the increased social instability and intense competition in Iraq is having on our overall financial results for the year to date.

"Nevertheless we are encouraged to see growth of our customer base in key markets, with both Saudi Arabia and Sudan witnessing healthy growth in all of their key financial indicators.”

(Source: Zain)

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