JEDDAH, 20 October 2004 — Saudi Arabia’s telecom sector is set to witness a major price war shortly as Etisalat Consortium, operator of its second mobile phone network, intends to offer charges 15 percent lower than those offered by Saudi Telecom Company, press reports said yesterday.
The consortium, led by UAE telecom giant Etisalat, has already presented an application to the Communications and Information Technology Commission (CITC) requesting the Kingdom’s regulator to approve its prices, Al-Madinah Arabic daily reported quoting a high-level source. The source did not rule out the possibility of Etisalat offering the same monthly mobile subscription charge of 20 dirhams (SR20.4), which it offers to its clients in the United Arab Emirates.
Obaid Meshar, executive vice president of Etisalat, said his company wanted to offer suitable prices that are attractive to clients in the Kingdom. “The focus of our competition will be in the quality of service,” he said, adding that the prices would be determined by CITC.
Saudi Telecom has already announced its plan to cut prices for its various services within two months. Charges of domestic telephone calls will be cut from 40 to 10 halalas and SAWA phone charges from SR1.20 to 85 halalas per minute under the new STC discounts. STC will also cut Internet service charges by offering two new packages. In the first package, clients will get direct access to the Internet by paying five halalas per minute, the company said giving details of the new discounts, which will come into effect during Ramadan and Shawwal.
Khaled Al-Mulhem, president of STC, said the new discounts were made to keep STC service rates competitive at regional and international levels. He estimated the total number of STC clients at more than 13 million. Saudi Telecom posted a net income of SR7. 67 billion for the nine months ending Sept. 30 of this year compared to SR6.54 billion during the same period last year. Mulhem said the figures confirmed STC’s solid financial position.
