RIYADH, 17 July 2004 — The Saudi Arabian General Investment Authority (SAGIA) has welcomed the geographic spread and financial attractiveness of bids to obtain the license for the Kingdom’s second mobile phone operator. The authority regards it a vote of confidence from international businesses in the strength and prospects of the Saudi economy.
SAGIA’s Governor Amr A. Dabbagh said the highest bid of SR12.21 billion came from a consortium led by the region’s leading telecom company, Etisalat of the United Arab Emirates. It was followed by bids of SR11.05 billion by South Africa’s MTN consortium and SR9.8 billion from Orascom of Egypt.
“We are not only pleased with the numbers, but also with the interest shown by bidders from the Gulf and Middle East, Europe and Africa. We have consistently maintained that business confidence stems from strong economic fundamentals and market potential, and security aberrations are unlikely to have a lasting impact on Saudi Arabia’s investment climate and potential. I believe that the GSM bids have proven once again that investor confidence in Saudi Arabia’s economy and market remains strong,” Dabbagh said in a statement. He also cited the recent commitment from Japan’s Sumitomo Chemical Company to invest in a SR16.12 billion refining and petrochemical complex on the Red Sea. The governor added that since 2000, SAGIA had licensed a total of 2,280 projects in the Kingdom involving a total investment of SR57.610 billion.
Of these, the industrial sector accounted for 439 projects with an investment component of SR15.275 billion, the services sector 1,347 projects (SR24.47 billion), and fully foreign-owned licensed projects 1,568 projects (SR 39.029 billion).
Total financing for joint venture projects stood at SR18.581 billion for 712 projects, with foreign share making up 46.27 percent.
Dabbagh said the investment climate in the Kingdom would improve progressively as more sectors open up for private domestic and foreign investment.
He said recent meetings with domestic and foreign businesses were very encouraging as none showed any doubt about business prospects in the Kingdom, contradicting the picture of gloom that spreads after terror incidents.
Meanwhile, sources anticipate the volume of the mobile phone market will expand further during the next three years to more than 14 million subscribers. At present there are about seven to eight million subscribers of mobile phone services that are served by Saudi Telecom.
