Ooredoo: More Than a Telecom Multiple.

Ooredoo looks inexpensive enough to be mistaken for an ordinary telecom stock.

At QAR13.00 on 27 August, the Qatar-listed group was worth roughly QAR41.6 billion, or US$11.4 billion. That puts the shares at around 11 times trailing earnings. The QAR0.75 dividend paid for 2025 equates to a historical yield of about 5.8%.

There is nothing especially unusual about those numbers for a telecommunications company. The more unusual part is what management has been doing with the assets sitting behind them.

Over the past several years, Ooredoo has started separating infrastructure that historically lived inside its operating companies. Data centres now sit within Syntys. Towers are being separated. International fibre and subsea assets have moved into Ooredoo Fibre Networks. Fintech is being developed as a regional platform. In August, the company went further again, committing around US$800 million to Zankore, an AI-compute business in Indonesia.

Management expects digital infrastructure and adjacent platforms to rise from about 4% of group revenue in 2025 to roughly 15% by 2030. Core telecom would still dominate, but much less so than it does today.

I do not think this means Ooredoo suddenly deserves an AI-company valuation. The more useful question is whether a mature telecom group can use its cash flows, networks and regional position to create infrastructure businesses that become valuable in their own right.

A useful core business

That strategy would be considerably harder to fund if the traditional operations were deteriorating. So far, they are holding up well.

First-half revenue increased 4.6% to QAR12.5 billion, while EBITDA rose 7.4% to QAR5.5 billion. The margin improved to 44.4%. Ooredoo also reported QAR3.9 billion of free cash flow, up 7.7%. It is worth noting that Ooredoo defines this measure as EBITDA less capital expenditure, so it is not directly comparable with the stricter free-cash-flow definitions used by some companies.

Reported net profit slipped 5.1% to QAR1.8 billion, mainly because of a QAR208 million legal provision in Algeria. Normalised profit rose 3.7% to QAR2.0 billion.

The geographic mix gives Ooredoo a slightly unusual profile. Qatar is mature but highly profitable. Revenue there was virtually flat in the first half, yet the EBITDA margin reached 52.7%. Tunisia grew revenue 14.4%, while Algeria and Iraq were also important contributors to group growth.

This combination gives management room to invest without stretching the balance sheet. At the end of June, net debt was only 0.6 times EBITDA. Ooredoo had QAR10.9 billion of cash, excluding restricted balances, and QAR6.4 billion of undrawn committed facilities. Eighty-four per cent of debt was fixed rate.

The dividend has been moving higher as well. It increased from QAR0.25 per share in 2020 to QAR0.75 for 2025, while the board has raised its targeted payout range to 50% to 70% of normalised earnings.

The telecom operations do not need to become high-growth businesses for the wider strategy to work. They need to remain profitable, defend their market positions and continue producing enough cash to support investment elsewhere.

Syntys gives us something tangible to analyse

Data centres are the part of Ooredoo we have spent the most time on.

At the end of 2025, Syntys had 24.5MW of installed capacity across Qatar, Kuwait and Tunisia, with utilisation close to 99%. The acquisition of Q Data subsequently added 12.5MW in Qatar, comprising 5MW already operating and another 7.5MW under development. Total installed capacity reached approximately 30MW.

Ooredoo wants to reach around 120MW by 2030. Until recently, it was difficult to do much with that target beyond recognise the scale of management's ambition. The first-half numbers provide a better starting point.

Syntys produced QAR112 million of revenue and QAR46 million of EBITDA in the first half of 2026, an EBITDA margin of roughly 41%. Hyperscale customers accounted for 70% of Qatar revenue, and another 8.4MW hyperscaler contract was signed during the second quarter.

Management says contracts are generally denominated in US dollars, run for 10 to 15 years and contain renewal mechanisms. Hyperscale capacity is developed to customer requirements rather than being built speculatively. Iron Mountain's minority investment also brings a specialist infrastructure partner into the business while leaving Ooredoo in control.

Those characteristics are encouraging, but the 120MW target still needs to be translated into returns.

Ooredoo has outlined a US$1 billion investment programme, with approximately US$550 million initially committed. As a simple benchmark, US$1 billion of capital would ultimately need to generate around US$120 million of annual after-tax operating profit to produce a 12% return.

That is not our forecast for Syntys. The investment will be phased, financing will affect the eventual economics, and we do not yet know enough about depreciation, maintenance expenditure, tax or the final asset structure to calculate an accurate return on capital.

It does put some perspective around the growth plan. Annualising Syntys' first-half EBITDA produces only about QAR92 million today, although the platform is operating at a fraction of its planned capacity. Expansion therefore needs to bring a substantial increase in earnings as well as megawatts.

A 41% EBITDA margin is a promising starting point. Better disclosure around depreciation, maintenance capex, power economics, invested capital and customer concentration would make the eventual valuation much easier to assess.

Syntys has at least progressed beyond the stage where investors are being asked to value a strategy slide. There is now an operating business with revenue, margins, contracted demand and a sizeable development programme.

Towers have already attracted outside capital

The tower strategy comes with something Syntys does not yet have: an external valuation marker.

Ooredoo, Zain and TASC agreed to combine close to 30,000 towers across six MENA markets. At announcement, the combined business was given an estimated enterprise value of US$2.2 billion. Ooredoo and Zain are each expected to own 49.3%. The completed platform was expected to produce close to US$500 million of annual run-rate revenue and more than US$200 million of EBITDA after leases.

Ooredoo's interest should not simply be valued at half of US$2.2 billion, since that figure represents enterprise value rather than equity value. But the transaction does tell us how external infrastructure investors are prepared to think about the assets.

Separating them may also change their economics. An independent tower operator can add tenants, compare returns across sites, raise infrastructure capital and operate with a clearer commercial mandate than passive assets buried within telecom subsidiaries.

Progress has taken time because approvals are required across multiple jurisdictions. Ooredoo launched Al Abraj in Qatar in June, giving its passive tower infrastructure a standalone operating structure there.

Ooredoo Fibre Networks is following a similar path, although financial disclosure is much thinner.

OFN was formally established in February to manage international connectivity and submarine cable investments. Its main project is Fibre in the Gulf, a 24-fibre-pair subsea system designed for up to 720Tbps of capacity across Qatar, the UAE, Bahrain, Saudi Arabia, Kuwait, Iraq and Oman. The broader carve-out is expected to be completed by 2027.

I would not assign a meaningful standalone valuation to OFN at this stage. The strategic fit is obvious alongside data centres and cloud infrastructure, but investors need financial information before strategic value can be translated into equity value.

Zankore is a different proposition

The US$800 million commitment to Zankore deserves a different framework from towers or fibre.

Ooredoo announced the investment on 6 August for a 49% interest in the new AI-compute platform, which is being developed in Indonesia alongside Indosat Ooredoo Hutchison, Nokia and NVIDIA. The initial plan includes roughly 200MW of AI capacity in the first half of 2027, with the longer-term platform targeting 1GW.

Ooredoo estimates that its investment will contribute approximately US$600 million of cumulative EBITDA to the group over its first five years.

There is plenty to like about the opportunity. Ooredoo is entering through an existing relationship with Indosat rather than approaching Indonesia as a new market, while Nokia and NVIDIA bring obvious technical capabilities. AI and cloud demand in the region are also expanding quickly.

The asset economics are less forgiving than passive infrastructure.

GPU generations move quickly, power requirements are substantial, and a premium computing asset can lose economic relevance far faster than a tower or fibre network. For that reason, I would want Zankore to clear a higher return hurdle.

On US$800 million of capital, a 12% annual after-tax return would amount to roughly US$96 million, while 15% would require about US$120 million. Ooredoo's projected US$600 million of cumulative EBITDA averages US$120 million annually over five years, but the comparison should not be taken too far.

EBITDA is not cash flow. Earnings are unlikely to arrive evenly. Hardware will need to be refreshed, and the initial US$800 million may not represent the full amount of capital eventually required.

Customer commitments, utilisation rates, financing terms, electricity costs and hardware-replacement expenditure will tell us much more than the headline capacity target.

Zankore could become a meaningful earnings stream. It could also prove far more capital-hungry than Ooredoo's traditional infrastructure investments. With a commitment of this size, the distinction will become important quite quickly.

QIA ownership shapes the capital-allocation debate

The Qatar Investment Authority owns 53% of Ooredoo. The General Retirement & Social Insurance Authority holds another 13%, the General Military Retirement and Social Insurance Authority owns 2%, and ADIA has 4.99%. Following the secondary offering completed in 2025, free float is around 27%.

There are advantages to having a controlling shareholder able to think over long periods. Data centres, fibre networks and regional infrastructure platforms do not always fit neatly into the time horizons preferred by public markets.

The structure also increases the importance of capital allocation for minority shareholders.

Ooredoo has plenty of funding capacity. The harder question is whether the businesses receiving that capital produce adequate returns. Syntys, passive towers, fibre and Zankore should not all be judged against the same hurdle simply because management places them within a wider digital-infrastructure strategy.

Their asset lives are different, their customer structures are different and their reinvestment needs are different. An AI-compute platform carrying rapidly depreciating hardware should earn more than a passive tower business to compensate for that risk.

QIA's position gives Ooredoo the ability to invest through periods when public markets might prefer cash to be returned immediately. The eventual test for minority investors is whether that patience increases per-share value.

Fintech can remain a smaller part of the thesis

Ooredoo Financial Technology International is expanding across Qatar, Oman, the Maldives and Tunisia.

The Qatar operation processed QAR5.4 billion of transaction value in the first half. Oman processed QAR473 million of international remittances, while the group is working towards a private beta in Iraq in the first half of 2027 and pursuing licences elsewhere.

Ooredoo has obvious distribution advantages. It already owns brands and customer relationships across markets where mobile financial services can solve genuine problems.

For now, I am comfortable treating fintech as optionality. It is too small to drive our view of the stock, and the investment case does not require us to assume it becomes a major regional financial platform.

What are we actually paying for?

At QAR13.00, investors are paying roughly 11 times trailing earnings for the entire group. The historical dividend yield is close to 5.8%. Leverage remains low and the established telecom operations continue to produce substantial cash.

Management expects digital infrastructure and adjacent platforms to account for about 15% of revenue by 2030, compared with roughly 4% in 2025.

The stock does not need a dramatic change in its valuation multiple for shareholders to earn a reasonable return. Core telecom can grow modestly, the dividend can absorb part of the cash generation and the infrastructure businesses can become progressively more important.

Nor are investors currently paying obvious standalone infrastructure valuations for those assets. Syntys remains inside a telecom group. The tower business is only part-way through its separation. OFN is too early to value properly. Zankore is barely underway.

There is room for disappointment. Capital expenditure could rise faster than the earnings generated from it. Data-centre competition may compress returns. AI hardware may consume more replacement capital than expected. Ooredoo also operates across markets carrying very different political, regulatory and currency risks.

At around 11 times earnings, some imperfection is already easier to tolerate than it would be at a premium valuation.

The important question over the next few years will be less about whether Ooredoo can grow its digital infrastructure revenue and more about what return it earns while doing so.

Why we own Ooredoo

Ooredoo is a current holding in the Evermore MENA Select Fund.

Its established telecom operations give us a solid starting point: strong market positions, healthy margins, a progressive dividend and a balance sheet with substantial capacity.

Around that core, management is assembling businesses that could eventually change the earnings mix.

Syntys is now sufficiently developed for us to analyse revenue, EBITDA, contracts and capacity rather than simply management targets. The tower assets already have an outside valuation reference. Fibre sits naturally alongside the data-centre strategy, even though its financial contribution is still difficult to measure. Fintech is small enough that we do not need to place much weight on it.

Zankore deserves closer scrutiny because US$800 million is too large to be treated as experimentation. The opportunity may be substantial, but AI compute brings a different pattern of depreciation and reinvestment from the infrastructure Ooredoo has traditionally owned.

For us, that makes capital allocation increasingly central to the investment.

Ooredoo spent years improving the telecom business. Shareholders will now see what management can earn on the cash that business produces.

At around 11 times earnings, I think the starting price gives us a reasonable chance of being rewarded if those decisions are good.

Data and source notes

Financial information is drawn primarily from Ooredoo's FY2025 Annual Report, 2025 Capital Markets Day materials and results for the six months ended 30 June 2026. Syntys operating and contract information comes from Ooredoo's results and Capital Markets Day disclosures. TowerCo figures refer to the transaction announced by Ooredoo, Zain and TASC. OFN and FIG details are based on Ooredoo's 2026 infrastructure announcements. Zankore information is based on Ooredoo's announcement dated 6 August 2026. Ownership percentages are taken from Ooredoo's FY2025 corporate-governance disclosures. Share-price data use the QAR13.00 close on 27 August 2026.

Disclosure: Ooredoo Q.P.S.C. is a current holding of the Evermore MENA Select Fund. This research represents Evermore's assessment at the date of publication and is not personal financial advice. Evermore may buy or sell securities discussed in its research without notice.

Important information

This research note is provided for informational purposes only. It does not constitute personal financial advice, a recommendation, an offer, solicitation or invitation to acquire any financial product. The information is general in nature and does not take into account any person's objectives, financial situation or needs. Company examples are included for research discussion only and should not be treated as recommendations. Past performance is not a reliable indicator of future performance.