JEDDAH, 19 April 2007 — A consortium led by Bahrain Telecom Co. (Batelco) announced yesterday that it had won Saudi Arabia’s second fixed-line license amid reports that the Kingdom was likely to issue multiple fixed-line licenses to meet its growing development requirements.
“We have won the Saudi fixed-line license,” Batelco Chief Executive Peter Kaliaropoulos told Reuters. There has been no official confirmation from the Communications and Information Technology Commission (CITC), the Kingdom’s telecom regulator, on the report.
CITC spokesman Sultan Al-Malik declined to comment on Batelco winning the license. However, he said the commission would announce the winner on Saturday when it would open the tenders presented by three qualified consortia: Optical Communication Company Consortium (MCI International/Verizon-USA), Al-Mutakamilah Consortium (PCCW-Hong Kong) and Atheeb Consortium (Batelco-Bahrain).
Thomas Kuruvilla, managing director of Arthur D. Little in the Middle East, which has been working closely with the CITC in the licensing process, hinted at the possibility of Saudi Arabia issuing multiple fixed-line licenses.
“There is a wrong notion that CITC is awarding only one fixed-phone services at this stage. Technically qualified applicants (such as Verizon) not requesting for spectrum are eligible for the fixed-line license subject to Cabinet approval. Qualified applicants who have bid for the spectrum will now go through the Spectrum Assignment Process. Spectrum is available for more than one player,” he told Arab News.
“Technically, we can have all three as fixed service providers, Verizon providing wire-line, and the other two providing a combination of wire-line and wireless connectivity to consumers. This is subject to them winning the required spectrum and the Cabinet approval,” said Kuruvilla.
He said the CITC has been very successful in updating the regulatory framework to allow the best, latest and cost effective technologies to be used to provide fixed-line services.
“Multiple fixed service providers are necessary in Saudi Arabia at this stage to ensure rapid investments in the fixed local access infrastructure and enhance consumer choices. This will also facilitate the move toward convergence in the near future. We have now successfully avoided situations faced recently in other countries with unsuccessful or delayed second national fixed license award processes,” Kuruvilla explained.
Bahrain’s telecom giant Batelco is looking to grow through foreign acquisitions, saying opportunities in its home market of less than a million people were limited. The firm bought Jordan’s Umniah Mobile Co. last year. It also acquired 20 percent of Yemeni mobile operator SabaFon for $144 million last month. Earlier in April, the firm said it had secured a $485 million loan, its first, to fund regional expansion.
Batelco’s Chairman Shaikh Hamad bin Abdulla Al-Khalifa announced a strong start to 2007 with a net profit of BD24.8 million, an increase of seven percent for the first quarter of the year versus Q1 2006. He said that Batelco remains focused on delivering new services to its customers in Bahrain but also continues to accelerate the growth of the company in the region. “As Bahrain’s residents are offered additional mobile, fixed telephony and Internet alternatives by competitors, we need to keep delivering better value services and be more responsive to customer needs,” he said.
Saudi Arabia, the largest Arab economy, is the Middle East’s biggest telecom market. The license ends the fixed-line monopoly of state-controlled Saudi Telecom Co., which also lost its mobile phone monopoly in 2005 when Etihad Etisalat (Mobily) began services. A consortium led by Kuwait’s Mobile Telecom Co. (MTC) made the highest bid for Saudi Arabia’s third mobile telephone license last month, offering $6.11 billion.
