MANAMA: Saudi Telecom (STC) yesterday won a contract to become Bahrain’s third mobile operator. STC, the biggest operator in the Middle East by market value, acquired the license for 86.68 million dinars ($230 million), Bahrain’s Telecommunications Regulatory Authority (TRA) announced.
Kuwait’s Mobile Telecommunications Co. (Zain) and Bahrain Telecommunications Co. (Batelco) are the existing operators. STC plans to start operations in the second half of 2009 and aims to acquire a 20 percent Bahraini market share over the next 10 years from Zain and Batelco, according to Fahad bin Mushayt, director of mergers and acquisitions at STC. “Economic and social integration between the two kingdoms, illustrated by the cross-boarder trade and travel, makes STC the natural partner,” Mushayt told a news conference.
Several million people cross a causeway linking Bahrain to Saudi Arabia every year, and analysts have said the license would help STC guard against losing customers to Kuwaiti rival Zain, which operates in all three countries.
Bin Mushayt declined to say how much the company plans to invest in Bahrain.
STC has committed itself to establish a $300 million venture capital fund in Bahrain that will nurture information and communications companies in the country and the region.
STC President and CEO Saud Al-Daweesh said in a statement the expansion to Bahrain would provide STC with an ideal platform to launch its highly advanced services in the telecom sector in Bahrain. “By entering the Bahraini market, STC will be able to transfer its extensive experience in managing mobile telecom operations in the region. A prime example of this success is the recent launch of the 3rd mobile license in Kuwait,” he added.
Three other firms had registered interest in the auction, but did not bid. Mohammed Al-Amer, chairman of TRA, said yesterday these were Bahrain’s TwoConnect and Mena Telecom as well as a consortium including France Telecom’s mobile arm Orange and Jordan Telecom.
Mena Telecom is an investment subsidiary of Islamic lender Kuwait Finance House.
Bahrain, on a drive to boost competition and bring down prices, launched the license auction last year but repeatedly delayed the deadline at the request of interested companies.
The smallest Gulf Arab economy with a population of around 1.05 million people, the island state has a mobile penetration of around 120 percent, according to EFG-Hermes.
— With input from agencies
