Wataniya Telecom announces third quarter 2003 consolidated financial results

"This significant win affirmed the company's continuous pursuit to expand and develop operations in the region. This success also substantiates Wataniya Telecom's proven track record of quickly deploying GSM networks and providing affordable and quality mobile services." said Mr. Faisal Hamad Al-Ayyar, Chairman of Wataniya Telecom.

Wataniya Telecom - Kuwait Financial Results (Unconsolidated)
•Qtr 3 Revenues: KD 31.4 million (US$ 106.1 million)
•Qtr 3 EBITDA: KD 12.4 million (US$ 41.9 million)
•Qtr 3 Operating Cash Flow: KD 15.5 million (US$ 52.4 million)

Revenues for the 3rd quarter of 2003 were KD 31.4 million (US$ 106.1 million), compared to KD 20.9 million (US$ 70.6 million) for the same quarter of 2002, an increase of 50%. Revenues remained flat on a quarter to quarter basis in spite of a significant number of people leaving Kuwait on holiday to escape from the summer heat.

EBITDA for the 3rd quarter of 2003 was KD 12.4 million (US$ 41.9 million), compared to KD 7.9 million (US$ 26.7 million) for the 3rd quarter of 2002, an increase of 57%. On a quarter to quarter basis compared to the 2nd Qtr 2003, EBITDA increased by KD 0.4 million (US$ 1.4 million) from KD 12 million (US$ 40.5 million), a growth of 3.3%.

Post-tax Profit for the 3rd quarter of 2003 was KD 9.1 million (US$ 30.7 million), an increase of 122%, compared to KD 4.1 million (US$ 13.9 million) for the 3rd quarter of 2002. Post-tax profit remained steady on a quarter to quarter basis compared to 2nd Qtr 2003.

"Wataniya Telecom has continued to enjoy a solid financial performance, with a significant growth in revenues and profits compared with the same period last year," said Mr. Faisal Al-Ayyar. "The excellent financial results are a clear indication of our customers' satisfaction on the quality and the range of our services. We continue to witness a significant change in the communication lifestyles of mobile phone users in Kuwait and are proud to be part of this evolution as a key stimulator of demand".

Wataniya Telecom's customer base increased by 29,603 to close the 3rd quarter with 780,188 active customers and an estimated 50% share of the Kuwait mobile phone market. This reflects an increase of 26.7% over the year-end 2002 customer base of 615,791. Monthly churn increased to 3.2% in Q3 from 2.8% in Q2 2003 mainly due to the war effect. Roaming coverage increased to 227 operators in 102 countries.

Average 3rd quarter Recurring Monthly Revenue per Customer (ARPU), excluding roaming, increased to KD 12.28 (US$ 41.5), compared to KD 11.43 (US$ 38.60) for Q2 2002. In the 3rd quarter 2003, post-paid ARPU, excluding roaming, decreased to KD 22.33 (US$ 75.4) and pre-paid ARPU decreased to KD 11.46 (US$ 38.7) as compared to the previous quarter.

Tunisiana Financial Results (Unconsolidated)
Revenues for the 3rd quarter of 2003 were KD 11.1 million (US$ 37.5 million), EBITDA was KD 3.3 million (US$ 11.1 million) for an EBITDA of
29.5% and the Post-tax Loss was KD 0.7 million (US$ 2.4 million). Tunisiana has achieved an active subscriber base of 380,746. The net attributable loss for the quarter to Wataniya Telecom from Tunisiana is KD 0.3 million (US$ 1 million).

Consolidated Financial Results
"Tunisia's mobile subscriber penetration has seen a considerable growth since we launched Tunisiana's services at the end of year 2002" said Wataniya Telecom Chairman, Mr. Faisal Al-Ayyar. "The Tunisiana operations are expected to start yielding profits in the coming quarters. It is very encouraging to see that our strategic investment in expansion opportunities continues to be well received"

The Company's share price as at September 30, 2003 was 1,940 fils, giving a
Kuwait Stock Market valuation for NMTC (Wataniya Telecom) of KD 688 million (US$ 2.3 Billion). Consolidated earnings per share for the 3rd quarter were 24.8 fils.