RIYADH/JEDDAH, 8 January 2008 — Finnish-German telecom group Nokia Siemens Networks yesterday signed a nearly SR3.75 billion ($1 billion) contract in Riyadh with Saudi Arabia’s newest player in the mobile communications market, Zain, to build a mobile telephone network in the Kingdom.
Under the terms of the deal, Nokia Siemens will design and install a hybrid 2G/3G network and maintain it for five years. Under the agreement, the companies will supply the core and radio networks, operations and business support systems, applications and a full suite of services including managed services.
“This huge project will radically change the face of mobile communications in the Kingdom and will set the benchmark for future mobile communications in the region,” said Zain CEO Marwan Al-Ahmadi.
The deal is being described as one of the most important ones in Nokia Siemens’ history. With the distributed architecture of its mobile soft switch and multimedia gateway, Nokia Siemens is able to offer Zain a cost optimized core network solution with a fast rollout to enable new advanced services for subscribers.
“This project takes our longstanding collaboration with Zain, established in 1994, to a new level,” said Walid Moneimne, Nokia Siemens chairman for the Middle East and Africa. “We are proud to support Zain’s entry into the Saudi market with our industry-leading services and solutions.”
Zain, Kuwait’s biggest mobile operator, made the highest bid for Saudi Arabia’s third mobile license last year, paying $6.1 billion as part of its expansion in the Middle East. Zain, formerly known as the MTC Group, is the leading telecommunications mobile provider across the Middle East and Africa.
“Zain will get the cooperation of the two existing mobile service operators — Saudi Telecom Co. (STC) and Mobily — to further enhance services to the subscribers,” Al-Ahmadi said, adding that the company will unfold a package to attract new customers to the network.
Around 2,000 employees will be involved in the Kingdom operations and Zain hopes to deploy a sizable number of local professionals, Al-Ahmadi said. It has over 15,000 employees providing a wide range of mobile voice and data services to more than 42.5 million active individual and business customers.
With Saudi mobile phone usage increasing by 30 percent per year, and handset penetration in the region considered still below the international average, the Kingdom’s two mobile service operators, STC and Mobily, together with Zain, will be looking forward to continued business growth.
Meanwhile, Zain Saudi Arabia said its shareholders might sell more than the originally planned 40 percent stake in an initial public offering, according to a report.
Owners of Zain Saudi Arabia had planned to sell 560 million shares to the public in the first quarter, and 70 million shares to each of the state-owned General Organization for Social Insurance and the Public Pension Agency.