ZOI will be the gateway to the world
A new joint venture Zain Omantel International (ZOI) will become the Middle East’s premier international wholesale services provider, claim the participants. They will revolutionise the wholesale telecoms sector by offering the unique proposition of unparalleled service and support to customers worldwide due the relative might of the participants. Kuwait based Zain Group is operating in seven markets in the Middle East and Africa while Omantel is national telco for Oman. Zain will hold 74 per cent of the venture’s share capital while Omantel will own the remainder 26 per cent, according to a Boursa Kuwait filing. ZOI will build on Zain’s extensive regional presence and success in the retail and digital arenas, combined with Omantel’s wholesale capacity and experience built of running international subsea and terrestrial networks. The joint venture will cater to telco operators wanting end-to-end connections in the Middle East, international carriers, data centres, hyperscalers, and cloud providers seeking services within the region and beyond.
ZOI will now manage all the international wholesale requirements of Zain and Omantel operations in eight countries, serving over 55 million customers, immediately cutting operating costs and raising its game through access to the latest low-latency and high-capacity services over its extended footprint. Zain Vice-Chairman and Group CEO Bader Al-Kharafi detailed the strategic value of the pact and collaboration has been a significant step in its 4Sight profitable growth strategy. Al-Kharafi said this exemplifies how Zain is transforming the business, creating new synergies, extending its reach and improving its capacity to offer the highest quality services to customers. “ZOI is ideally positioned to evolve into a significant international player on the wholesale telecoms scene that will benefit both Zain and Omantel on financial, commercial and operational levels,” said Al-Kharafi.
The international arm of Omantel Group is contending as a global provider on the strength of its performance as a regional wholesale player, according to Omantel CEO Talal Al Mamari. “ZOI is poised to become the primary gateway from our region to the rest of the world, with the combined strengths of Omantel and Zain,” said Al Mamari, “with these differentiating factors, ZOI is the preferred partner with a unique presence in international telecoms.” Along with its consortium partners ZOI will undertake the development of the Jeddah to Marseille (J2M) subsea systems, Blue-Raman Africa-1. It will also embark on an extensive terrestrial network building programme, connecting most of the regional countries to the landing stations and data centres. High-profile projects like this, and others in the pipeline, will create an ecosystem that is unrivalled in the region, it claimed.
Sohail Qadir, who has served 13-year tenure as the VP of Wholesale at Omantel, has been appointed as the CEO of ZOI. Qadir is accredited with making Omantel a brand after he increased revenues tenfold. Under Qadir Omantel Wholesale attracted investments in more than 20 subsea cables and this in turn led the hosting of global hyperscalers, direct interconnections with all major international service providers and extensive roaming coverage all over the world. The scope and consumption of reliable wholesale services has matured in the region this new partnership is perfectly well-timed to capitalise on global trends, according to Qadir. “I look forward to leading ZOI in serving regional and international customers alike, and providing more value and better customer-experience to every stakeholders across our extensive operational footprint,” said Qadir.
Meanwhile, Zain’s first-quarter profit rose 15 per cent year-on-year (YoY) to reach €161m (KWD 54m) as the company’s flagship Kuwait operations witnessed a 4% growth in customer base to serve 2.6 million and a net income of KWD19m (€57 million). The increase in the company’s net profit reflects earnings per share of 13 fils. The telco said its consolidated Q1 2023 revenues surged 15 per cent YoY to KWD 468m (€1.4bn) while its earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 8% to KWD165m (€495m).
Zain KSA, the company’s Saudi Arabia unit, reported a six-fold increase in Q1 2023 net income to $151m, revenues jumped by 11% to $644m and EBITDA reached $189m, reflecting a margin of 29%. The Kuwaiti company is using a global increase in investor appetite for tower portfolios to derive more value from its assets. Zain KSA, which is 37 per cent by Zain Group, completed the sale of 8,069 towers for $807m to the Public Investment Fund with at least 3,600 towers transferred in the first quarter of the year. The ownership of the remaining towers will be transferred in batches in the coming quarters. Zain also entered into a definite 15-year leaseback agreement for its 4,968 tower portfolio in Iraq with TASC Towers Iraq for $180m earlier in the year.