JEDDAH, 19 April 2006 — The Communications and Information Technology Commission (CITC), the Kingdom’s telecom regulator, has advised King Abdul Aziz City of Science and Technology (KACST) and Saudi Telecom Company (STC) to cut Internet charges by 50 percent.
Muhammad Al-Suwaiyel, head of CITC, made this recommendation while speaking to reporters in Riyadh on Monday. At present Internet users in the Kingdom pay SR3 per hour. A 50-percent reduction in charges would increase the use of the information superhighway.
The Kingdom’s telecom giant STC slashed charges of domestic telephone calls from 40 halalas to 10 halalas per minute in 2004. It also cut Internet service charges by offering two new packages; with one of them providing direct access to the Internet for a fee of five halalas per minute.
Al-Suwaiyel also said he was not happy with the present Internet service. “You will see big improvement in Internet service within a short period,” he said. He also revealed plans to expand wireless Internet services.
The CITC chief said the supervision of Internet service would be shifted from KACST to his organization soon in the light of royal decree issued previously. “I cannot give an exact date, but I expect it would take place in June or July,” he added.
He said the CITC had licensed 42 firms to provide Internet services, but only 18 of them are currently operating in the Kingdom. “Others are still holding their licenses without using them and pay their annual fees.”
He also spoke about the time schedule for the issuance of the second license for land lines and a third license for a mobile operator, adding that the telecom market in the Kingdom would open up completely by the end of this year.
Al-Suwaiyel said the present service providers — STC and Mobily — cover only 60 percent of the Kingdom’s potential mobile market.
The CITC would publish the licensing schedule in the third quarter of this year and evaluate, select and award the new licenses by the end of the fourth quarter.
Analysts had anticipated that a second fixed-line license in Saudi Arabia would be fiercely fought over.
Al-Suwaiyel said during the past years the government had set out a number of regulations to open up the market for competition between Saudi and foreign companies. “We are also working on expediting efforts to allow clients to shift numbers between STC and Mobily,” he pointed out, saying the new service would be available by June. Saudi Arabia is one of the first countries to provide such a service, he claimed.
Saudi Telecom announced last month that it was planning to launch third-generation mobile phone services this year in all major cities of the Kingdom.
“We’ll launch 3G service with all the related services,” said Saud Al-Duwaish, acting STC chairman. He hoped that 3G service would strengthen the STC’s position as the market leader in the Kingdom.
Al-Duwaish did not say when the company would actually launch the 3G service, which is expected to improve telecommunication services in the country.
CITC granted a 3G mobile license to STC in July last year for SR753.7 million. At that time Al-Suwaiyel told reporters his organization expected STC to provide 3G services to the public within the next 18 months.
