JEDDAH, 22 March 2004 — Nine consortia have submitted bids for the second Saudi mobile operator license. The deadline for bids was last night. The nine consortia are Vodaphone (UK), T-Mobile (Germany), Telefonica (Spain), Orascom (Egypt), Telecom Italia, MTC (Kuwait), Etisalat (UAE), Austria Telekom and Saudi Oger. There was speculation yesterday that Orange (France) might also submit a last minute bid. It is still seen as a potential technical partner to one of the consortia.
Saudi Oger, owned by Lebanese Prime Minister Rafik Al-Hariri, is the only company bidding for the license on its own rather than as part of a consortium. It, however, owns South African mobile phone operator, Cell C, which will act as its technical partner in the bid.
The Vodaphone consortium is seen as the front runner, not least by STC officials. Sources in STC recently told Arab News that they “fully expected” Vodaphone to win. Nonetheless, they are also reported to be “worried” at the prospect of having Vodaphone as their rival because of its operating strength. There are reports that STC has estimated it will lose as many as 40-50 percent of its subscribers to whomever wins the bid and thereafter will share new subscribers with its rival on a 50-50 basis. One bidder told Arab News that there was concern that the Kuwaitis and Emiratis would “jack up” their bids to ensure their success.
Yesterday’s deadline was for pre-qualification. Chosen companies will be asked to submit bids by June with a decision being announced three weeks later. The license sale is expected to net the Saudi treasury at least $1 billion. Revenue from mobile-phone services in Saudi Arabia is expected to rise to nearly $8 billion in 2007, Jordan-based Arab Advisers Group said in a report last March.
