Such an agreement would be a first for the Gulf region and will allow the carriers to cut network maintenance costs in Saudi Arabia, which is more than twice the size of France and Germany combined.
“We’re trying to conclude this year,” said Khaled Al-Kaf, Mobily chief executive, when asked if STC and Mobily would agree a tower-sharing deal.
“We’re both anxious to complete the deal.”
The duo’s towers would likely be spun off into a separate company, with Mobily and former monopoly STC becoming tenants, Al-Kaf said. Third carrier Zain Saudi could later join.
“We would welcome other operators, either as a partner or a customer, (but) for the time being it’s between us and STC,” Al-Kaf said.
STC operates around 11,000 towers, and Mobily, an affiliate of the UAE’s Etisalat, has about 7,500.
The two carriers, which together account for more than 80 percent of Saudi’s mobile subscribers, have yet to decide on whether the deal will be a 50-50 partnership.
Sharing infrastructure allows operators to cut capital and operating costs.
Mobily, which launched services in 2005, posted a 40 percent increase in first-quarter net profit, while 2010 full-year profit rose by the same margin.
“Mobily will stay a double-digit growth company for some time,” said Al-Kaf.
Data accounted for 20 percent of Mobily’s revenues in the first quarter and Al-Kaf forecast this would rise.
“We are looking at something in the low 20s (percent) by the end of the year,” he said.
“There’s huge growth from data.”
Rising consumer adoption of smart phones and tablets are helping fuel this growth, while Mobily aims to roll out an LTE — or 4G — network in 30 cities in the third quarter, Al-Kaf said.
LTE was designed primarily to carry data, rather than voice, and offers download speeds more than double that of 3G.
“We didn’t want to invest in upgrading to 3.5G,” said Al-Kaf.
LTE phone handsets are yet to hit the market, so initial demand will likely come from mobile broadband users.
Mobily has an estimated 52 percent share of Saudi Arabia’s broadband market.
Al-Kaf welcomed last week’s decision by regional regulators to cut intra-region roaming rates by 30 percent from July.
“This will bring a good elasticity of usage — I see growth in traffic and it will also increase revenues,” he said.
“Roaming rates were a little bit high, and we should be more aggressive on this. That value will be recognized by the customers, and that will generate profits.”
