Mobily's settlement deal to have negative impact on UAE Etisalat's profit
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Etihad Etisalat Co.’s (Mobily) agreement with Saudi authorities to settle old disputes and define a new mechanism for the calculation of service and license royalties will have a minimal impact on UAE’s Etisalat, as Mobily’s related provisions will cover most part for 2018, it said in a statement on Monday.
However, the net profit over the coming few years is expected to be negatively impacted by around AED 125 -175 million due to the new mechanism, the statement said.
This financial impact will be reviewed and verified by the external auditor, and will be revealed as part of the end of year fiscal disclosures.
Etisalat will announce any updates as they occur as per the capital market regulations, it added.
According to data compiled by Argaam, Mobily signed an agreement with the Ministry of Finance, the Ministry of Telecommunications and Information Technology, and the Communications and Information Technology Commission (CITC) to settle all the old disputes and define a new investment framework and a new mechanism for the calculation of service royalties and license royalties.
As of 2019, Mobily’s financial results will see an increase in cost by SAR 450-600 million per year over the coming years, it said.
UAE’s Etisalat owns a 27.99 percent stake in Mobily.