Zain eyes one million new subs in 2012

Zain Sudan, a unit of Kuwaiti telecoms firm Zain Group, aims to sign up an additional one million mobile subscribers in 2012 to boost its total customer base to 14 million by year-end, Reuters cites the company’s chief executive Elfatih Erwa as saying. The company is targeting growth outside of the capital Khartoum, but Erwa said that earnings gains will be offset by weaker operating margins due to higher taxes and a growing economic crisis. In December 2011 the Sudanese government introduced a new tax on telecoms operators to make up for the loss of oil revenue from newly independent South Sudan. Sales and services taxes for telecoms firms were increased from 20% to 30%, while a tax on profits was hiked from 15% to 30%; Erwa said that Zain has added the sales tax to its tariffs, but fierce competition meant it could not offset the profit tax increase with further price rises. Last year Zain Sudan began dividing its operations into two units after the South seceded in July 2011, but has yet to agree a licence fee with the newly independent country.