Saudi’s new fingerprint policy pushes Mobily into Q4 loss

Saudi Arabia’s second largest telecommunications operator, Etihad Etisalat (Mobily), posted a fourth-quarter loss on Thursday because of the cost of implementing a government initiative to register fingerprints with phone numbers.

Mobily, an affiliate of the United Arab Emirates’ Etisalat , made a net loss of SAR70.7m ($18.9m) in the three months to Dec. 31. This compares with a profit of SAR10.6m in the prior-year period, according to a bourse statement.

The result beat estimates; six analysts polled by Reuters had forecast Mobily would make an average quarterly net loss of SAR106m.

Mobily, which competes with Saudi Telecom and Zain Saudi, said the suspension of unregistered customer lines and resulting pressure on sales contributed to a 16.6 per cent decline in revenue to SAR2.9bn.

Under Communications and Information Technology Commission rules announced last year, all SIM cards issued in Saudi Arabia must be linked to a fingerprint record held at the National Information Center, part of the Ministry of Interior.

Unregistered lines started to be disconnected on July 20, competitor Saudi Telecom said previously. The initiative aims to stop people obtaining mobile phones by using fraudulent identification cards, according to local press reports.

Etisalat said in December that its management agreement with Mobily had expired and the companies were working on a new arrangement. Earlier this month, Mobily said it had appointed Ahmed Abdelsalam Abdelrahman to replace chief executive Ahmad Farroukh.