JEDDAH, 30 April 2006 — At least 10 consortia, comprising Saudi and foreign investors as well as specialized international companies, are vying to win the Kingdom’s second land phone license and third mobile phone license, informed sources said. Most of the companies involved in the new business tie-ups previously competed for the second mobile license in the Kingdom. A consortium led by UAE telecom giant Etisalat won the second GSM license two years ago.
Foreign telecom companies have shown tremendous interest in the expanding Saudi market. Saudi Telecom Company (STC) now boasts 12 million mobile phone subscribers and four million land phone subscribers.
Informed sources at the Comunication and Information Technology Commission (CITC) said despite the presence of Mobily, about 75 percent of the Kingdom’s telecom market remains untapped, offering new investment opportunities.
Mobily announced its first quarter profit of SR37 million for the first time this year after the number of its subscribers rose to nearly three million within a short tiime. Etisalat holds 35 percent of Mobily while the rest goes to Saudi investors.
Last month the commission announced its intent to issue new licenses for land phones and mobile phones by the end of this year. The timing of the launch for the new licenses was selected on the basis of a study conducted by its consultancy office.
The CITC will publish the licensing schedule in the third quarter of this year and evaluate, select and award the new licenses by the end of the fourth quarter. Analysts expect fierce competition for the second fixed-line license in the Kingdom.
With the issuance of the new licenses, Muhammad Al-Suwaiyel, governor of CITC, said the Kingdom’s telecom market would have completely opened up by the end of this year. He said during the past few years, the government had set out a number of regulations to open up the market for competition between Saudi and foreign companies.
There is good scope for new mobile and fixed phone licenses in the Kingdom. Both population and gross domestic product (GDP) and per capita GDP have been growing at a substantially higher rate compared to the world average growth rate.
As part of its efforts to join the World Trade Organization (WTO) last year, Saudi Arabia passed 42 new trade-related laws, signed 38 bilateral trade agreements and created nine regulatory bodies, the CITC said.
The opening up of the mobile phone market has triggered big competition between STC and Mobily. STC announced last month that it was planning to launch third-generation mobile phone services this year in all major cities of the Kingdom.