Saudi Telecom confirms resignation of its CEO

Saudi Telecom Co (STC), the kingdom's largest telecom operator, said on Monday its chief executive has resigned but did not give a reason for his departure or name a successor. Saud al-Daweesh submitted his resignation on January 10 but the board did not accept it until Monday, the former state-owned monopoly said in a statement posted on the Saudi bourse website. "Saudi Telecom announces that its group chief executive Saud al-Daweesh submitted his resignation as of 10 January 2010, and the board accepted it on April 2," said the statement, which praised Daweesh for growing the business to include 160 million customers. In January the company reported a 19 percent drop in net profits to SR7.67bn ($2.1bn). Daweesh was appointed chief executive in 2009, seven years after the company floated 30 percent of its shares on the local stock market. An engineer by trade, Daweesh's departure may aid STC's attempts to become a more dynamic, marketing-led company in the face of stiffening domestic competition, analysts said. Yet a new leader may still struggle to change the former monopoly's public sector, bureaucratic culture, they warned. STC, which remains majority government-owned nearly a decade after its partial privatisation, has operations across the Muslim world from Turkey to Indonesia. In recent months the company has been credited with arresting a decline in its financial performance based on rising domestic revenue, which was buoyed by aggressively priced broadband bundles. However, it has struggled to develop its foreign operations as rapidly as it had planned, with revenue outside the kingdom accounting for 32 percent of the group total - well short of its 50 percent target. STC's shares closed down 0.2 percent on Monday at 41.20 riyals a share.