RIYADH, 15 July 2004 — Saudi Telecom (STC) announced net profits of $1.37 billion for the first half of the year late Tuesday.
The company posted net profits of SR5.14 billion on June 30, a 24 percent increase on profits of SR4.14 billion ($1.106 billion) in the corresponding period last year, Chairman Khaled Al-Melhem said in a statement.
STC, the Kingdom’s largest listed firm, issued the statement after financial offers by six consortia bidding to become the second mobile phone operator in the lucrative Saudi market were opened by the Communications and Information Technology Commission (CITC).
A source in one of the bidding consortia told AFP that a consortium including the United Arab Emirates’ Etisalat corporation made the highest bid, offering SR12.21 billion ($3.25 billion) and putting itself on course to win the coveted license.
The CITC said it would recommend to the Saudi Cabinet that the license be granted to the highest bidder after ascertaining the validity of the offer and its compliance with specifications.
An Arab industry report has predicted that revenues in Saudi Arabia’s GSM market will soar to $7.9 billion by 2007 on the back of the partial privatization of state-owned Saudi Telecom and increased competition.
Although Riyadh is opening up the mobile sector to competition, Saudi Telecom will retain a monopoly over land lines and Internet services until 2008.
Melhem confirmed that STC now had more than eight million mobile users “who are getting the best services,” and reported operating revenues of SR14.88 billion ($3.9 billion) on June 30, a 14-percent increase on the first half of last year, “despite major cuts in fees”.
Etisalat is partnering six Saudi companies in the consortium expected to rival STC in the mobile sector.