US firm wins stake in new Saudi fixed-line operator

Author: 
Souhail Karam I Reuters
Publication Date: 
Tue, 2008-12-16 03:00

RIYADH: US firm Verizon Communications Inc. has taken a 15 percent stake in new Saudi fixed-line operator Optical Communications Co., which will need to spend $3 billion on infrastructure, an executive said yesterday. “Our strategic and founding partner Verizon has agreed to take 15 percent of the company’s capital and undertake on a pro-rata basis the costs of investments we need,” the Optical Communications executive told Reuters.

In addition to Saudi partners, the consortium also includes Millicom International Cellular. The executive declined to give more details on the breakdown of Optical’s share ownership. “For the moment, we have set a $3 billion budget for the optical wire infrastructure alone,” he added. He asked not to be named because he is not allowed to speak to the media.

Optical Communications was among three operators which in 2007 won licenses that would end state-controlled Saudi Telecom Company’s fixed-line monopoly.

The other consortiums are led by Bahrain Telecommunications Co. (Batelco) and Hong Kong’s PCCW.

Optical Communications hopes to raise some of the cash it will need to launch its operations through an initial public offering next year, the executive said. “It should have happened this year, but market conditions were not adequate,” he said. The company plans to start its services in 2010, he said.

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