JEDDAH, 11 March 2003 — Saudi Telecom’s privatization campaign has already started yielding results and its projection for 2007 shows a big jump in financial gains in the next five years.
STC, which caters for more than eight million people in the Kingdom in fixed network and mobile services, expects revenues in the Saudi GSM market to soar to $7.9 billion by 2007. But revenues from Saudi mainlines will decline to $2.72 billion by 2007 compared to $2.79 billion by 2002-end, according to the Jordan-based Arab Advisors Group.
The group, forecasting a jump in the GSM market penetration rate to 77 percent by 2007, projects mobile revenues including roaming to exceed $7.9 billion by 2007-end from $3.4 billion in 2002. “The growth in mobile adoption has radically changed the traffic patterns in the Kingdom,” the group said in a report.
Between 1999 and 2001, the absolute number of international calls via mobile grew by 305 percent, while the number of minutes over mainlines grew only by 26 percent,” the report added.
STC had until January this year a monopoly over telephone, mobile and Internet services in the Kingdom.
In a heavily oversubscribed Initial Public Offering (IPO), the company sold off 90 million shares or 30 percent of its 300 million shares in a deal that generated more than $4 billion for the state coffers.
As part of its ongoing privatization process, mobile services will be liberalized in 2004 and land lines in 2008.
Following sharp cuts in service charges, land telephone lines have risen to 3.5 million and mobile lines to five million in the Kingdom that has a population of 23 million.
“To service our future users, we’ve built a network based on an ATM backbone, carried over fiber optic cables,” STC stated. “We’ve laid over 20,000 km of fiber optics cables, providing capacity now and for the future.”
According to STC, its work of expansion has resulted in an increase in its working lines from 1.7 million in 1996 to over 3.3 million.
At the same time, the original 1.7 million analogue lines have been converted to digital, allowing existing users to gain the benefits that a digital network offers. The company is now installing 50,000 new fixed lines a month, which is more than half a million new lines a year. It has increased its mobile user base from 175,000 in 1996 to 3.6 million at the end of July 2002.
