RIYADH, 29 June — A senior executive a the Saudi Telecom Company has announced that the company last week awarded contracts for 450,000 new fixed telephone lines to foreign firms and plans another deal for up to 1.5 mobile connections next month.
Khaled Al-Melhem, executive president of the company, told Arab News that STC was no longer in need of a foreign partner to help it in its restructuring drive.
“The company last week awarded a contract for 450,000 fixed lines to a number of international firms, which would be implemented over 18 months,” Al-Melhem said.
“Within a month from now, another contract for between 1.2 to 1.5 million mobile lines will be awarded,” he added.
Al-Melhem did not say who won the fixed-lines contract and gave no value for the deal. Several international companies, including Lucent Technologies, Germany’s Siemens and Canada’s SR Telecom were among the bidders for the contract, which industry sources said was worth about SR1.2 billion ($320 million).
Earlier this month, SR Telecom said it had received a letter of intent from STC for the expansion, with the first phase of the project worth more than SR131.25 million ($35 million) and designed to provide services to some 24,000 subscribers.
Last year, STC awarded Sweden’s Ericsson an SR1.13 billion ($302 million) contract to add 1.1 million GSM connections. US companies Lucent Technologies and Morotorla Inc., France’s Alcatel, Siemens, Finnish telecom equipment maker Nokia and Canada’s Nortel Network had vied for the deal.
The president said the company was working on finalizing the budgets in its bid to enter the stock market. STC was set up in 1998 with a capital of over SR12 billion ($3.2 billion) in a move to privatize the sector.
The company had a sales figure of SR9 billion ($2.4 billion) in the first year; it grew to SR14.5 billion ($3.87 billion ) in 1999 and SR17 billion ($4.53 billion) last year.
STC earlier this year obtained a SR2.5 billion ($667 million) loan from banks to finance its expansion projects. Asked if the company was still seeking a foreign partner, Melhem said: “The need for a foreign partner centers around speeding up restructuring efforts and not to get technology. The technology is no more a monopoly of any particular agency. The success of STC in carrying out major strides toward restructuring with domestic efforts has canceled the need for a strategic partner.”
Asked about STC’s strategy to meet competition when the telecommunications sector will open up, Melhem said his company would allow competitors to use its infrastructure facilities for a fee to be fixed during negotiations.
The mobile division of the company has been growing at a rate of between 8 and 10 percent. The number of GSM clients grew from 650,000 in 1998 to over 2 million at present, he said.
Melhem said the WAP (Wireless Application Protocol) services would be available by July end. Tariffs will be fixed at 50 halalas per minute during peak hours and 30 halalas at off-peak hours with a monthly subscription fee of SR20. The WAP service enables cell phone users to access Internet services including e-mail, bank accounts, local and international news broadcasts and weather forecasts.
The Saudi Research and Publishing Company and Saudi Press Agency as well as Al-Riyadh, Al-Jazirah and Okaz newspapers will offer the media services.
