Change in shareholders, executive management but Vodafone to keep brand presence in Qatar

DOHA: Vodafone Qatar yesterday made several important announcements, which include a change in the company's shareholding structure, extension of its Licence for another 40 years, and the appointment of new executive management for the company.

Vodafone Europe, a subsidiary the UK-based global telecom giant, has decided to sell out its stakes in Vodafone Qatar for about $371m (QR1.3bn) to Qatar Foundation, which is one of the founders and a major shareholder of Vodafone Qatar.

However, Vodafone, the world's second biggest mobile operator, will keep its brand present in the country under a future partnership deal.

The local telecom service provider also unveiled plans to launch 5G services very soon, and enhance infrastructure to boost the network coverage and other services to expand its operations in the country.

'Regardless of shareholding, we are part of the Vodafone family. So we will have the advantages of the scale of Vodafone and will be one of the first adopters of 5G network, Ian Gray, Current CEO of Vodafone Qatar told reporters in a press conference.

Gray added: 'There is a change in the nominal value of the company's shares, but since there is no cash transaction, so there will not be any impact on the company's balance sheet.

Vodafone and the Qatar Foundation hold 45 percent of Vodafone Qatar through a joint venture, with the rest of the operator owned by the government of Qatar and other investors. Vodafone holds 51 percent of the joint venture.

Asked about investment and capital expenditure (Capex) plan for this year, Gray said the Capex in 2018 is expected to be significantly higher compared to the previous year.

The company also announced its financials for the 9 month period ended December 31, 2017. The revenue for the reported period stood at QR1.48bn, representing a decrease of 4 percent year-on-year driven by a subscriber decrease of 6 percent year-on-year as a result of the network outage and slowdown in the overall prepaid market.

However, compared to the previous quarter, total revenue grew by 25 percent led by the acceleration of both the postpaid subscriber segment, handset and equipment revenues.

The Company's net profit excluding amortisation improved by 12 percent year-on-year to reach QR120m driven by higher EBITDA and lower depreciation. The net debt position continued to improve, reaching QR620m by December 31, 2017, the lowest net debt in the Company's history.

The Company's Licence, originally granted for 20 years, has been extended for an additional 40 years to 2068. This will reduce theamortisation cost annually from QR403m to approximately QR100m. The Board of Vodafone Qatar believes this will make the Company profitable for the foreseeable future.

The Board of Vodafone Qatar has decided (subject to obtaining the approval of the shareholders of the Company at an Extraordinary General Assembly (EGA), as well as all necessary regulatory approvals), to implement a reduction in the share capital of the Company from QR8.454bn to QR4.227bn by means of reducing the nominal value of the shares of the Company from QR10 per share to QR5 per share in accordance with the relevant provisions.

This move is intended to address the accumulated losses of the Company, which to date stands at QR4.272bn, largely driven by the amortisation costs of the Licence. This will have no cash impact on the Company and will achieve many goals.

To drive the Company forward, Rashid Al Naimi has been elected the Managing Director with immediate effect. As the CEO of Qatar Foundation Endowment, Rashid Fahad Al Naimi is responsible for Qatar Foundation's investment portfolios. He is also the residing Chairman of MEEZA and Mazaya Qatar, and a Board Member of Vodafone Qatar.

Gray, Vodafone Qatar's current CEO and Board Director, has decided to retire and steps down following the Company's Annual General Assembly (AGA) on March 19.

Sheikh Hamad bin Abdullah Al Thani will then take up the role of CEO. He currently holds the role of Vodafone Qatar's Chief Operating Officer.

Moreover, the company intends to recommend to the shareholders at the EGA to reduce the size of the Board from 9 members to 7 members, which will take effect at the end of the term of the existing Board

Members, subject to obtaining the approval of the shareholders of the Company at an EGA.

In a statement, Abdullah bin Nasser Al Misnad, Chairman of Vodafone Qatar, said: 'I strongly believe that these changes will provide the immediate requirements needed to accelerate Vodafone Qatar's future development as an industry leader in Qatar. These changes will also have a positive impact on the operational and financial health of the Company and as a result, deliver strong longterm shareholder value.

On behalf of the Board, I'd also like to express my sincere appreciation for Ian Gray's part in driving a strong recovery of the Company and laying a solid foundation which our new leadership will continue to build on going forward.

Sheikh Hamad, the next CEO, said: 'I want to thank the Board and Ian for their trust in me. I am excited about the future of Vodafone Qatar. We are at the beginning of a journey that will bring us closer to providing a converged digital ecosystem with smart solutions. I am certain that Vodafone Qatar will play a crucial role in driving the digital transformation in support of Qatar National Vision 2030. Customers have a great deal to look forward to in terms of innovation and choice.

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