With a population of 27 million, Saudi Arabia has the largest economy among the six GCC states. According to the CITC, there were some 54.3 million mobile subscriptions at the end of March 2012, which also makes it the Gulf’s largest telecoms market.

Despite this potential, Zain KSA has found the going tough since it started operations four years ago. Not only has it faced stiff competition from two well-established and well-funded rivals, it has also found itself hamstrung by large amounts of debt.

Prior to the recent capital restructuring and rights issue, the firm had more than SR16bn in debts. The money raised from the rights issue will go some way to addressing that and will give it some more room for manoeuvre.

Nonetheless, taking a significant amount of market share from STC and Mobily still looks beyond Zain KSA’s capabilities. Analysts suggest that it still lags behind its rivals in critical areas such as data and broadband services. That is not to say that Zain KSA cannot carve out a useful and even profitable niche for itself, but it is difficult to see how it can be anything more than a niche, in the short term at least.

The pressure is now on the recently installed management team to put the company’s troubled early years behind it and prove they have what it takes to turn its fortunes around. It is still too soon to judge them, but within six months or so a clearer picture should emerge.