Subject: [NEXTEL-1] Saudi Arabian Government to Issue New Mobile Phone License

From: [email-masked]
Date: Wed, 19 Nov 2003 13:23:50 -0500

Saudi Arabian Government to Issue New Mobile Phone License

Saudi Arabia's Communications and Information Technology Commission is
committed to ending the country's mobile phone monopoly, which is now
primarily occupied by Saudi Telecom. The commission recently issued its plan
to open up the wireless market to competition by announcing it will award a
new license in 2004. The commission released a consultation document
regarding the award of the new license, which covers such questions as which
technology to use, how many licenses to award, roaming and interconnection
issues and how to amend Saudi Telecom's existing license to ensure that the
same conditions apply to all operators.

============================================================
Saudi Arabia: Ending the mobile-phone monopoly

The Saudi Arabian government is sticking to schedule as it presses ahead with
plans to open up the
telecoms market to competition. This autumn it has started the process of
awarding licences to
provide mobile-phone services, breaking the monopoly of Saudi Telecom, which has
more than 4m
mobile-phone subscribers, says ViewsWire Middle East

The industry regulator, the Communications and Information Technology
Commission, has issued a
20-page consultation document outlining plans to issue at least one new
mobile-phone licence in the
fourth quarter of 2004. Interested parties have been asked to submit comments on
the draft by
December 31st. There will then be a six-week prequalification process, at the
end of which the
regulator will send out request for applications. These will be evaluated in ten
weeks.

The consultation document covers questions such as which technology to use, how
many licences to
award, roaming and interconnection issues, how to amend Saudi Telecom’s existing
licence to ensure
that the same conditions apply to all operators and under what terms to offer
shares in the new
operating venture(s) to the public.

Since Saudi Telecom was corporatised in 1998, it has amply demonstrated the
value inherent in the
kingdom’s telecoms industry. Freed from its former status as an arm of the
government, the company
has invested in a rapid expansion of its mobile-phone market, and has produced
healthy financial
returns despite cutting phone charges sharply in anticipation of competition. At
the end of 2002, a 30%
stake in the company was offered to the public, raising SR15.3bn (US$4.1bn).

Saudi Telecom’s most recent financial statements, covering the period up to the
end of September
2003, show earnings from wireless operations rising by 45% year-on-year to
SR13.03bn. Net profit for
the nine-month period more than doubled, to SR6.54bn, compared with SR2.86bn in
January-September 2002. The company’s share price has more than doubled since
the initial public
offering (IPO), and is now trading at about SR410. This gives it a price/earning
ratio of about 14, based
on annualised 2003 earnings.

Despite Saudi Telecom’s much improved performance over the past five years,
there is still a lot of
potential in the Saudi telecoms market. Saudi Arabia’s teledensity (total
telephone subscribers per 100
inhabitants) was only 36.1% at the end of 2002, according to the International
Telecommunications
Union. This compares with 110% in the UAE, 85% in Bahrain and 72% in Kuwait.

http://www.ebusinessforum.com/index.asp?layout=rich_story&channelid=4&categoryid=31&title=Saudi+Arabia%3A+Ending+the+mobile%2Dphone+monopoly&doc_id=6845
Source: ViewsWire Middle East.

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