Mobily, a major telecommunications provider, encountered financial discrepancies resulting from aggressive revenue recognition and inadequate internal controls. These strategic oversights led to restatements of earnings, regulatory scrutiny, and a significant drop in stock value, eroding investor confidence.
Etihad Etisalat, commonly known as Mobily, is a major telecommunications company in Saudi Arabia. Founded in 2004, it has experienced both significant growth and challenges in its strategic management:
Rapid Growth and Market Disruption
Mobily entered the Saudi telecommunications market as the second GSM license holder, breaking Saudi Telecom Company’s monopoly. The company’s launch was highly successful:
- Commenced commercial operations on May 25, 2005
- Acquired over 1 million subscribers in its first 90 days
- Named the fastest growing mobile operator in the Middle East and North Africa by GSM Association in 2006
Technological Innovation
Mobily has consistently invested in new technologies:
- Launched 3.5G services in 2006
- Introduced 4G services in 2011
- Rolled out 5G services in 2019
Financial Performance and Challenges
While Mobily experienced rapid initial growth, it has faced financial challenges:
- The company’s capital increased from an initial SAR 5 billion to SAR 7.7 billion by 2013
- In recent years, Mobily has worked to improve its financial position, with its stock price showing some recovery
Strategic Partnerships
Mobily has formed key partnerships to enhance its services:
- Extended its partnership with Nokia in February 2021 for managing and maintaining radio and transport networks
Corporate Governance and Ownership
Mobily’s ownership structure includes:
- Etisalat Emirates Group holds 27.99% of shares
- General Organization for Social Insurance owns 6.90%
- The remaining shares are owned by institutional and retail investors
Recent Developments
As of January 2025, Mobily continues to evolve:
- Obtained a unified license to provide all licensed telecommunication services, including voice and internet
- Focuses on establishing and operating mobile wireless telecommunications networks, fiber optics networks, and related services
Challenges and Controversies
Mobily has faced some controversies:
- In 2013, reports emerged that Mobily was working on intercepting encrypted data sent over various mobile apps, raising privacy concerns
Mobily’s case demonstrates the challenges of maintaining growth and innovation in a rapidly evolving telecommunications market, while also highlighting the importance of adapting to technological changes and maintaining strong corporate governance.
