RIYADH, 6 March 2004 — The Saudi Telecom Company (STC) has announced that it will launch in the near future a new service — DSL LAN (Local Area Network) for small and medium enterprises to help connect their branches. STC Web-based SMS will also be offered to SMEs. This will be in addition to a videoconferencing facility in cooperation with its partners.
These services would be available “with a readjustment of prices” to stimulate the growth of the telecom market, Dr. Abdullah Al-Mousa, vice president of Saudi Data, Strategic Business Unit of STC, told Arab News. It was also announced that STC would relaunch its VSAT services to facilitate Internet access via satellite.
He said STC already has a range of data services targeting the various segments of the market — from X.25, leased lines and frame relay to cardswipes (EFT-POS) and the broadband DSL service. The frame relay service will be faster than digital leased services.
While conceding that “there is some room for prices to go down,” Dr. Al-Mousa said it is also important to realize that “there are other factors. There are many barriers here — the PC and notebook barriers which, together with problems in Internet connectivity, put them beyond the reach of the average citizen. Besides the access barrier for PCs, there are also the contents and applications barrier. We also need some national initiatives to stimulate the growth of this market.”
“The Saudi data market is small and has a 20-30 percent utilization of data services because of high cost. However, STC is reviewing its cost structure, which has already been reduced during the last two years,” the executive said.
Dr. Al-Mousa said STC was facing a peculiar situation. Whereas the growth rate of mobile phone services was 80 percent per annum — the highest in the Middle East — that for land lines stood at only seven percent per annum. Yet, the bulk of STC’s investment was in the infrastructure for land lines, in which it will continue to enjoy a monopoly for the time being.
“We have decided to squeeze some revenue from the land lines by introducing broadband services, such as DSL and some value-added services. This would help us to generate some additional revenue from the existing infrastructure we already have. Of course, the mobile sector is booming and the future wave of investments will be in that direction.”
The STC executive said the fixed lines were serving a lot of customers, besides carrying some traffic for data services and mobile telephony. “Even the access network, PSDN, is going to be utilized for broadband services.” As for investment opportunities for overseas operators, he said there is room for both data and mobile services in the Kingdom as indicated by the Communications and Information Technology Commission.
New SMS-based applications for mobile users include the JawwalNet that enables access to the Internet via PDA and browsing-capable mobiles, which has proved highly popular among customers, Dr. Al-Mousa said.