GCC telcos are reinventing themselves amid slowdown in traditional telco services: GCC telcos are rebranding as “techos” in a shift towards more digital-focused revenue streams, S&P said in a recent report. With mobile penetration rates already high at 130%-210%, organic expansion is limited, and core revenues are expected to increase a modest 1-3% between this year and the next.

Enter digital services: GCC government’s digital agendas to boost the telecom sectors’ revenues, stimulating the e-commerce, fintech, streaming, and gaming sectors. Non-telecom sectors could contribute 18%-25% to telcos’ revenues over the next three years — and increasing M&A activity could spur growth further.

Background: Etisalat rebranded as e& in 2022, spinning off itsits telecom operations from its other tech businesses. Bahrain Telecommunications also launched four digital ventures during the same year, rebranding to Beyon, while Qatar’s Ooreedoo spun off its fintech arm, Ooreedoo Money as a standalone company and carved out its data center unit.

Competition and margin volatility will remain, S&P Global says: GCC telecoms benefit from regulations and government relationships, but face competition from smaller players and global tech giants. However, they can collaborate with these giants and leverage local regulations favoring domestic data storage, while acting as integrators or building data centers as local partners for hyperscalers.

THE MARKETS THIS MORNING-

It looks a lot like the start of most trading days before the Fed speaks: Asian shares are mixed slipped at the opening bell and have since made up their losses, with all four major benchmarks we track (the Nikkei, Hang Seng, Shanghai Composite, and Kospi) in the green at dispatch time. US and European futures were down slightly at dispatch time this morning as traders wait to for the Federal Open Markets Committee to wrap up its two-day meeting.

ADX

9,259

+0.13% (YTD: -3.3%)

DFM

4,273

-0.1% (YTD: +5.3%)

Nasdaq Dubai UAE20

3,731

+0.1% (YTD: -2.9%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.1% o/n

5.4% 1 yr

TASI

12,804

+0.3% (YTD: +7.0%)

EGX30

28,676

-1.4% (YTD: +15.2%)

S&P 500

5,179

+0.6% (YTD: +8.6%)

FTSE 100

7,738

+0.2% (YTD: +0.1%)

Euro Stoxx 50

5,008

+0.5% (YTD: +10.8%)

Brent crude

USD 87.38

+0.6%

Natural gas (Nymex)

USD 1.76

+0.8%

Gold

USD 2,159

+0.1%

BTC

USD 62,738

-7.0% (YTD: +51.0%)

THE CLOSING BELL-

The ADX fell 0.3% yesterday on turnover of AED 975.22 bn. The index is down 3.3% YTD.

In the green: Abu Dhabi National Takaful (+15%), Palms Sports (+6.98%) and RAKBank (+6.59%).

In the red: Hayah Ins. (-10%), Al Khaleej Investment (-10%) and Sharjah Cement and Industrial Development (-7.64%).

Over on the DFM, the index is down 0.1% on turnover of AED 338.6 mn. Nasdaq Dubai is up 0.1%.

CORPORATE ACTIONS-

Aldar Properties approved distributing AED 1.34 bn in dividends — at 17 fils per share — to shareholders for 2023, according to an ADX disclosure (pdf).

Tags: