STC sets offer price for remaining shares in Viva Kuwait

Saudi Telecom Co (STC) said it will offer KWD1 (€3/$3.30) per share for the shares in Viva Kuwait it does not already own in order to increase its stake in the mobile operator from 26 per cent to 100 per cent.

According to Reuters, the Saudi telecoms operator announced the offer price in a statement issued to Riyadh's stock exchange after it received approval from Kuwait's market regulator for the takeover plan. The buyout period will be open to other Viva shareholders from Dec. 27 to Jan. 31.

STC will fund the takeover through its own cash reserves, the bid document said. Viva had a market capitalisation of $1.81 billion (€1.6 billion) as of Sunday's market close, Reuters reported.

Viva Kuwait launched services in 2008 and became profitable in 2012, Reuters noted. The company gained market share through an aggressive pricing strategy, competing against rivals Ooredoo Kuwait and Zain Kuwait.

In October, Ooredoo Kuwait revealed the extent to which Kuwait has become a fiercely competitive market by announcing it would offer zero-rated content to help it win back customers. The mobile operator said it would not charge customers for the data they use with over-the-top (OTT) services such as WhatsApp, Skype and Viber.

At the time, Ooredoo Kuwait COO Hani El-Kukhun said market penetration was at an all-time high in the country's mobile market. Reuters also reported that voice and text revenues of operators in the Gulf had been particularly hard hit by the growing use of OTT apps.

"The key is here how you get your customers to spend more on data...You either join the OTTs or you fight them, so we embraced them fully," Kukhun said.

Also in October, IDC said the mobile connected devices market (smartphones, tablets and portable PCs) in the countries within the Gulf Cooperation Council (GCC) suffered its worst ever quarter-on-quarter decline in the second quarter of 2015, falling 8 per cent to 8 million units. The region includes Saudi Arabia, the UAE, Bahrain, Oman, Qatar and Kuwait.

However, IDC said it expected the GCC mobile connected devices market to increase again in the third and fourth quarters of the year. In the year as a whole, IDC expects the GCC mobile connected devices market to increase by 6 per cent year on year to total 34 million units, followed by further growth of 10 per cent in 2016.

For more:
- see this Reuters article

Related articles:
Ooredoo Kuwait offers zero-rated content to win back customers
IDC: GCC's mobile connected devices market suffers heaviest quarter-on-quarter decline on record
Zain Kuwait seeks regional lead in NFV with 3-year Huawei deal
Nokia, Ooredoo sign new 5-year deal spanning 2G, 3G and 4G
Ooredoo generates nearly a third of total revenues from mobile data

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