JEDDAH, 25 February 2007 — Nine consortia led by major international companies including Egypt’s Orascom Telecom, Kuwait’s Mobile Telecom Co. (MTC) and South Africa’s MTN are vying for Saudi Arabia’s third mobile license, which, according to some sources, will generate SR20 billion for the Kingdom.
Other consortia in the race are Kingdom Holding Co., owned by Prince Alwaleed bin Talal, which is bidding with Turkish mobile operator Turkcell, and Dubai-based Oger Telecom, controlled by Lebanon’s Al-Hariri family, said Sultan Al-Malik, spokesman for the Communications and Information Technology Commission (CITC).
A CITC statement, carried by the Saudi Press Agency, named the remaining four consortia as Reliance Telecom with local partner Abdullah Abdulaziz Al-Rajhi, Samawat with Bharti, Al-Shoula with MTNL, and Tawasul Digicel.
“The CITC has received nine applications to win the (third) mobile license in response to the request forms issued on Oct. 14, 2006,” Al-Malik said, adding that the commission would announce the winner or the largest bidder after studying the applications within weeks.
Saudi Arabia, considered the largest telecom market in the region, also plans to end the fixed line monopoly of Saudi Telecom Co. this year to liberalize the market. There are four million fixed-line users in the Kingdom, which has a population of 24 million.
Dr. Mohammed Al-Suwayel, governor of the CITC, thanked all companies for their good response. He said the last date for receiving applications for the Kingdom’s second land phone license is March 10, 2007.
The CITC did not give values for the bids for the third GSM license but Asharq Al-Awsat, a sister publication of Arab News, yesterday quoted unidentified sources as saying the Kingdom could get SR20 billion from the license sale.
A consortium led by UAE telecom giant Etisalat paid SR12.21 billion for the second GSM license in 2004. Etihad Etisalat, in which the UAE company has a 35 percent stake, captured 30 percent of the market within 18 months of launching operations in May 2005.
Orascom, MTC, and Oger Telecom had earlier voiced interest in bidding, eager to tap a market where penetration rates are expected to jump.
“The companies I see battling fiercely are MTC and Orascom,” said Marc Hammoud, senior telecom analyst at Dubai-based investment bank Shuaa Capital. “They have announced that they don’t have any problem paying more than the amount paid for the second license. They want to enter the Saudi market.”
Saudi Arabia’s mobile penetration rate is about 76 percent and could rise to 95 percent within two years as the Kingdom’s population grows, Hammoud said. Average revenue per user is about $33 compared to $12 in Egypt, he said.
Bharti said earlier this month it was seeking acquisitions in the Middle East, Africa, and Latin America. In December, the regulator extended deadlines on bids for the third mobile license and the second fixed-line license by up to six weeks to give investors more time to submit bids.
— With input from agencies
