JEDDAH, 28 January — The Saudi Telecommunications Company will reduce installation charges and call rates of mobile phones by the end of this year or early next year, according to a company source.
The connection fee will be cut by half to about SR750 from the current rate of SR1, 500, the source said.
Meanwhile, Abdul Rahman Al-Yami, STC's director general, said the company was studying ways to reduce the rates to make them competitive at regional and international levels.
Another source attributed the plan to drastically cut connection fees to several reasons -- decreasing demand as most of the prospective subscribers have already obtained connections, services including family mobile phones which cost less, and the proposed prepaid cards.
The source also said the company planned to market prepaid mobile cards by the end of this year or soon after.
The new arrangement will enable cellphone subscribers to buy prepaid cards in the same was as they now do for ordinary telephones. The microchips or cards, already available in several countries, can be recharged, the source said.
The company intends to sell the prepaid cards along with the phone sets, according to another source. He said STC invited quotations from distributors of several telephone companies for the supply of 100,000 mobile phone sets that can be adapted to take the new cards. STC also wanted detailed information on maintenance, guarantees and the after-sale service to ensure easy and efficient operation and to maximize customer satisfaction.
The STC is expected to launch the prepaid chips along with the sets at around SR500, a market source said. This meant that the STC would buy sets at around SR300, he added.
Mobile phone distributors are watching the move by the STC with apprehension. They feel it would lead to considerable drop in demand for the products that they currently sell. It might also lead to an eventual price war among distributors, they say. This could benefit potential customers in terms of reduced prices, but lead to a decline in follow-up services and guarantees.
However, some agents are ready to accept the STC's tender offer to supply the sets on certain conditions including delaying the service until after next year's Haj. They laid down the condition because they wanted to target the huge pilgrim market. They also want to make maximum benefit out of the family phone service by delaying the introduction of the new cards, which are likely to reduce demand for family mobiles, the source added.
