JEDDAH, 21 March 2005 — Due to rising internal market demands Saudi Arabia’s second land line telephone license will be issued toward the end of 2006, two years ahead of the original schedule, Mohammed Al-Suwaiyel, governor of the Communications and Information Technology Commission (CITC) said yesterday.
Saudi Arabia has the largest telecommunications market in the Gulf, with four million land lines and eight million mobile lines serving a population of 23 million. The sector has been growing at 30 percent a year.
Last year, Saudi Arabia opened up its mobile phone market to competition for the first time, granting a mobile license to a consortium led by the United Arab Emirates’ Etisalat. But the majority state-owned Saudi Telecommunications Company (STC) maintained its monopoly on fixed land lines.
Suwaiyel said a third mobile telephone license would likely be issued during the third quarter of 2006. Suwaiyel also said criteria for the third mobile license would “open up more than it is now” — a reference to conditions of last year’s licensing, which required bidders to be made up of at least five Saudi firms and a cellular mobile operator. Ettihad Etisalat bid around SR12 billion ($3.2 billion) for last year’s license and will start competing with the STC by June.
Khalid Al-Kaf, chief executive of Ettihad Etisalat, said his company was planning to increase its capital from SR5 billion to SR7 billion. “We will offer 20 percent of shares for public subscription within two years,” he told reporters. Etisalat has so far invested SR1.8 billion on infrastructure projects.
He said the company would serve 30 Saudi cities when it starts operation before the middle of this year. “We have almost completed the infrastructure to start operation,” he added.
CITC’s announcement came during the official handing over of the Kingdom’s second new data transfer license to Integrated Telecommunication Company. The firm paid SR300 million for the 25-year license.
