JEDDAH, 16 April 2007 — Three consortia led by Verizon Communications, PCCW of Hong Kong and Bahrain Telecommunications Co. have been qualified to bid for Saudi Arabia’s second land phone license, the Communication and Information Technology Commission (CITC) announced yesterday.
CITC’s board of directors, chaired by Communication and Information Technology Minister Muhammad Jameel Mulla, picked the three from 10 groups, which submitted their applications in March for the license, which will end the fixed-line monopoly of Saudi Telecom Company.
“The CITC will open bids from the three consortia on April 21 in the presence of their representatives during a function at its headquarters in Riyadh,” said Dr. Mohammed Al-Suwayel, governor of the commission, the Kingdom’s telecom regulator.
The Verizon consortium also includes emerging markets telecommunications operator Millicom International Cellular SA, CITC said, without naming other participants.
Bids by Etihad Etisalat, which operates the Kingdom’s second mobile phone operator, South Korea’s KT Corp. and China Telecom were among those disqualified.
Khaled Ahmed Al-Juffali Co. (WorldCall Telecom of Pakistan), Saudi Telecom Holding Co. (Qtel-Atco), Electronet (Autelia of Italy) and Al-Shola were other consortia vying for the much sought-after license.
Saudi Arabia is the biggest telecom market in the Middle East. Saudi Telecom Company has around four million fixed-line phone subscribers, giving it a penetration rate of around 16 percent of the Kingdom’s 27-million population.
A consortium led by Kuwait’s Mobile Telecom Co. made the highest bid for the Kingdom’s third mobile telephone license in March, offering SR22.91 billion ($6.11 billion). Mobily, an affiliate of UAE telecom giant Etisalat, has attracted around six million mobile customers since it started operation in May 2005.
According to one study, total expenditure within the sector could reach SR225 billion ($60 billion) by the year 2020. At present there are 18 million mobile phones and four million fixed phones in the Kingdom. A consortium led by UAE telecom giant Etisalat paid SR12.21 billion for the second GSM license in 2004.
Arthur D. Little (ADL), a global strategy management consulting firm, has been working with the CITC throughout the licensing process for the last 15 months.