JEDDAH, 22 May 2004 — Internet services in the Kingdom are likely to be made free or heavily discounted under a propsal the Communications and Information Technology Commission (CITC) is studying.

“The commission is studying the matter and will make a decision shortly,” Al-Watan Arabic daily quoted Abdul Rahman Al-Fehaid, a senior CITC official, as saying.

King Abdul Aziz City of Science and Technology (KACST), the Kingdom’s main Internet service provider, last month announced plans to reduce Internet service charges in coordination with CITC and Saudi Telecom.

STC has cut charges for the provider by 45 percent while KACST in turn offered discounts between 46 and 51 percent to other Internet service providers and 48 percent to universities. The new discounted rate, which came into effect on May 1, reduced the charges on ISPs from SR27,500 to SR13,600 monthly for every million pulse per minute while the charges for universities were cut from SR25,000 to SR12,920.

It was the second major cut in Internet service charges announced by KACST within two years. In May 2002, it slashed prices by 42 to 78 percent.

According to a recent KACST statement, ISPs will get a 45 percent discount on the international network and 25 percent on the local network. “STC has also decided to give a 45 percent discount to DSL customers through the ISPs, whereas 10 percent discounts will be given to consumers on lease lines,” the statement said.

KACST has been looking into the volume and changes in the profile of Internet subscribers. It is also focusing on improving the quality of Internet services by providing higher bandwidth and by working closely with ISPs.

The Council of Ministers had called for reduction of Internet service charges for end users as early as October 2002. It also ordered a crackdown on Internet services received through satellite dishes and warned of measures including the cancelation of licenses.

“The Cabinet emphasized the need for expanding the bandwidth for Internet services and reducing the charges for Internet lines and the charges of end users to avert the use of alternative means,” SPA reported after the Cabinet meeting.

The number of Internet users in the Kingdom jumped from 690,000 in 2001 to 1.5 million last year. But the Kingdom’s 22 ISPs have been unable to achieve targeted profit figures because the access charges are so high.

The Internet penetration rate in Saudi Arabia still remains a low eight percent, with the UAE comfortably leading the region.