JEDDAH, 11 December 2004 — Ettihad Etisalat, the Kingdom’s second GSM (mobile service) provider, has been given a free hand in fixing service charges. The Telecommunications & Information Technology Commission has said it would not interfere in charges offered by Etisalat to its clients.
“TITC’s rules and regulations do not allow us to fix, either to reduce or increase, the charges offered by Ettihad Etisalat,” Sami Al-Murshid, director of international and media affairs at the commission, told Al-Eqtisadiah, a sister publication of Arab News.
“Every company will have its own marketing plans. TITC’s regulations and executive bylaws do not fix charges of service providers except those companies appointed by it to provide specific services, thus capturing 40 or more percentage of the telecom market,” he explained.
As per Murshid’s statement, the Saudi Telecom Company would require TITC’s permission before offering any cuts in service charges. STC has already offered new cuts in its Aljawal, SAWA and Internet service charges. It is likely to provide further cuts before the launch of Etisalat network next year.
Khaled Al-Kaf, managing director of Ettihad Etisalat, said his company has not yet taken a decision on service charges. However, he emphasized that Etisalat prices would be “competitive” to STC charges.
Murshid said the telecom regulator TITC would not restrict the competition between the two service providers. Thus, Etisalat will have the freedom to offer prices it deems suitable without considering STC charges.
Ettihad Etisalat is expected to launch its mobile network in the Kingdom by the middle of 2005. It has already selected Alcatel as one of the suppliers for new GSM/EDGE network. The contract reportedly constitutes a major GSM deployment for Alcatel in the Middle East.
Under the terms of the contract, Alcatel will supply its Evolium solution, including Base Stations Sub-systems (BSS) and revenue-generating applications such as next generation Voice Mail System (VMS) and the transmission system based on Microwave PDH, SDH, and Optical device. It is also responsible for installation and commissioning of a significant part of the network.
Alcatel claims that its multi-standard design of Evolium solution allows smooth and cost-effective introduction of GSM/GPRS/EDGE and 3G/UMTS capabilities on existing Evolium powered networks, thus allowing operators to implement enhanced broadband mobile multimedia services.
“Alcatel has proven to be a very flexible and supportive partner of Etisalat in the UAE. With the full support of Alcatel we will be able to meet this new global challenge and provide enhanced GSM services to the Saudi people in record time,” said Al-Kaf.
Marc Rouanne, chief operating officer of Alcatel’s mobile communications activities, said the contract would strengthen “our excellent business relationship” with Etisalat. “This new contract brings together expertise and competence from both companies and confirms Alcatel’s commitment to provide fast-growing operators such as Etisalat with the best fitted mobile solutions to support their growth,” he added.
A consortium led by UAE telecom giant Etisalat won the Kingdom’s second mobile phone license last August when the Saudi Cabinet approved TITC’s decision to opt for the consortium’s $3.457 billion offer that includes GSM and 3G licenses.
“With a current GSM penetration level of less than 35 percent in the Kingdom, there is a large segment of the market out there that does not have the service. Our focus is on that 65 percent,” said Obaid Bin Meshar, Etisalat’s senior executive vice president who led the consortium’s successful bid in the Kingdom.
Commerce and Industry Minister Dr. Hashem Yamani recently announced the establishment of Ettihad Etisalat as a Saudi joint-stock company with a capital of $1.33 billion (SR5 billion). He said the Riyadh-based company would have a capital of SR5 billion divided into 100 million shares, each with a nominal value of SR50.
