RIYADH: Mobile Telecommunication Co. Saudi Arabia, also known as Zain KSA, reported a net profit of SR405 million ($108.06 million) in the first half of this year, representing an 84.09 percent rise compared to the same period in 2025.
In a Tadawul statement, the company attributed the rise to a 3 percent increase in gross profit, which reached SR3.31 billion during the first six months of this year.
According to IMarc Group, Saudi Arabia’s telecom market reached $17.4 billion in 2025, and is projected to grow to $23.1 billion by 2034, registering a compound annual growth rate of 3.13 percent from 2026.
The sector’s steady expansion is being driven by accelerating digital transformation, the widespread rollout of 5G networks, and sustained government efforts to strengthen telecom infrastructure.
Factors driving growth
According to the statement, the firm’s earnings before interest, tax, depreciation, and amortization rose 1 percent to SR1.68 billion. In comparison, operating profit increased 7 percent to SR619 million, mainly due to lower depreciation and amortization expenses.
Commenting on the financial results, Zain KSA said in a bourse filing: “Gross profit for the 6-month period increased by 3 percent to SR3.31 billion compared to SR3.21 billion in the first six months of 2025 with an increase of SR103 million as result of the revenue mix improvement despite the handsets revenue decline.”
The company’s total revenue for the first half if of the year amounted to SR5.30 billion, marking a marginal decline of 0.69 percent compared to the year-ago period.
Zain KSA also booked SR112 million in one-off income from the Universal Service Fund and saw its financing costs fall by 11 percent.
This improvement was partially offset by reduced handset sales and a SR90 million rise in total operating expenses, even though expected credit losses fell by SR55 million.
Total shareholders’ equity, after excluding minority interest, reached SR10.82 billion as of June 30, compared with SR10.46 billion in the same period of the previous year.
Melwyn Abraham, CEO of Cogentix Consulting, told Arab News that Zain KSA’s profit growth was driven by six key factors: an improved revenue mix, stronger monetization of 5G services, and growth in its business-to-business segment, as well as cost optimization, lower financing costs, and reduced depreciation.
“The bigger story is what these numbers say about the business model. Revenue was broadly flat while operating profit grew, meaning Zain is getting better at turning the same network into earnings,” said Abraham.
He added: “Telecom is moving from a volume game to a value game where the winners will be operators that can generate multiple revenue streams from the infrastructure they have already built.”
Quarterly comparison
According to the Tadawul statement, Zain KSA’s net profit for the second quarter stood at SR204 million, representing an increase of 60.62 percent compared to the same period in 2025.
Compared to the first quarter, the company’s net profit also witnessed an increase of 1.49 percent.
Zain KSA’s total revenue for the second quarter stood at SR2.65 billion, marking a marginal decline of 0.11 percent compared to the same period in 2025 and a 0.18 percent drop from the previous three months.
Commenting on the financial results, Vijay Valecha, chief investment officer at Century Financial, told Arab News that one of the drivers of profit stood out as an improved revenue mix, primarily from higher-margin services like the consumer 5G segment.
He added: “Telecom companies invest heavily in setting up signal towers, fiber optics and overall network equipment, and once these assets become fully depreciated, the expense recorded in the accounting books declines even though the assets continue to generate revenue. This directly leads to better profit margins without requiring additional sales.”
Leading Saudi Arabia’s 5G evolution
Earlier this month, Zain KSA announced the commercial launch of Advanced 5th Generation technology for individual customers, becoming the first company in the Kingdom to offer this service.
The launch came as an extension of its leadership in developing digital infrastructure, following its earlier success in launching the 5G Standalone network in Saudi Arabia.
Commenting on the growth of the telecom sector in the Kingdom, Abraham said: “Saudi Arabia has already built a very large digital appetite. The next question is who captures the value from it. Consumers are using more data, businesses are moving more workloads to the cloud, and AI is creating a new demand for computing and connectivity.”
Valecha explained that the Kingdom’s telecom sector is supported by rapid digital transformation and rising demand for fast and reliable Internet and communication services.
“In Riyadh alone, 5G coverage exceeds 95 percent, making the capital city one of the leading global cities in terms of 5G accessibility. This widespread availability of high-speed Internet is expected to catalyze further growth in the digital economy, particularly in sectors like e-commerce, telecommunication, and digital services,” said Valecha.
