Nawras net profit declines 19.1pc

Nawras said this drop was "due to a reduction in SMS earnings which was not fully compensated by growth in data revenue", adding it made an accounting adjustment that removed 658,000 rials from its quarterly revenue.

High-margin source of revenue for operators

Texts incur little network costs in short are a high-margin source of revenue for operators, nevertheless the spread of smartphones, which are often sold with data packages, has spurred the adoption of alternative messaging services just as WhatsApp. Using these services to send a message abroad is substantially cheaper than text, hitting Gulf operators' income, with the region home to millions of foreign workers.

"Data is fairly new, which means the amount of revenue it generates is all in all pretty low, nevertheless is picking up rapidly," Jorgen Latte, Nawras chief financial officer, said.

"SMS revenue, which is coming from a much bigger number, is going down, so there's a reduction in overall revenue," he added.

The drop in profit

The drop in profit and revenue comes in spite of its subscriber base rising 2.4pc to 1.99m. This suggests its margins have fallen, with Nawras one of the few Gulf operators to offer low-cost voice-over-IP Internet-based calls.

"VoIP (Voice over Internet Protocol) has seen tremendous growth - the issue is when you get substitution with traditional voice calls, however the impact we've seen so far is in SMS," said Cormack. "We're trying to monetise data in all its forms, so it will be the strongest growth area."