x Abu Dhabi, UAESunday 23 July 2017

Zain to get edge with Vodafone partnership

Zain will be able to offer the latest smartphones earlier and cheaper than its Middle East rivals if a deal with Vodafone goes through, analysts say.

Zain stands to gain an edge over its competitors through a proposed partnership with Vodafone under which the two operators would lower roaming fees and share the cost of purchasing phones. AFP
Zain stands to gain an edge over its competitors through a proposed partnership with Vodafone under which the two operators would lower roaming fees and share the cost of purchasing phones. AFP

Zain will be able to offer the latest smartphones earlier and cheaper than its Middle East rivals if a deal with Vodafone goes through, analysts say.

The Kuwaiti firm stands to gain an edge over its competitors through a proposed partnership with Vodafone under which the two operators would lower roaming fees and share the cost of purchasing phones.

Andre Popov, a partner at the consultancy Peppers & Rogers Group in Dubai, said a pact with Vodafone on mobile handsets would give Zain an advantage over its rivals.

"Vodafone and Zain could potentially increase their bargaining power with handset vendors such as Apple, Nokia or Samsung.

"They might be able to secure new handsets earlier than their competitors. Getting them a few weeks earlier... could allow a company to lure higher-value customers away from the competition," Mr Popov said.

"It could also improve the prices at which Vodafone and Zain purchase handsets, lowering subscriber acquisition costs."

He said both operators could benefit from "more favourable roaming rates" through the deal.

Vodafone is the world's second-largest mobile operator but its presence in the Middle East is currently limited to stakes in operators in Egypt and Qatar.

A planned deal with Zain would allow Vodafone to offer its customers favourable roaming fees in markets such as Saudi Arabia, Iraq and Bahrain, according to media reports.

A Vodafone spokesman declined to comment on a possible deal with Zain.

Zain did not immediately respond to a request for comment.

"Vodafone [would get] even better coverage because Zain networks are often the leaders in their respective markets," said Petr Molik, the head of the research division at Mena Corp.

"Zain is going to get the roaming revenues [and] even cheaper handsets," he said.

Ibrahim Masood, a senior investment officer for asset management at Mashreq, said a deal with Zain made sense because it would boost Vodafone's presence in the Middle East.

bflanagan@thenational.ae

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