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Eight companies in the race to win Saudi's third mobile licence

JEDDAH -- Eight Asian, European and African companies are competing to win the Saudi Arabia's third mobile licence, which is expected to fetch SR15 billion ($4 billion) to state coffers, according to informed sources in the telecom market.

The sources said the arrival of the new GSM operator would not affect the business of Saudi Telecom and Mobily as a result of the growing Saudi market. The new mobile company is expected to sell 40 to 50 per cent of its shares in an initial public offering.

Many international companies such as Orascom of Egypt, MTC of Kuwait, Oger Telecom and SingTel of Singapore, Moroccan Telecom Co. and MTN of South Africa are vying for the third licence.

The main competition will be between Orascom and MTC . Naguib Saweras, chairman of Orascom , said his company has good chances to win the licence. He hoped that the third network would give connection to five million subscribers.

Orascom , a leading Arab company with operations in several Asian and African countries including Pakistan, Iraq, and Egypt, serves more than 50 million subscribers.

Marwan Al Ahmadi of MTC is also optimistic about the win as part of its efforts to expand its activities outside Kuwait. At present MTC is operating in 20 countries. He said Saudi market is big enough to accommodate more GSM operators.

The Communication and Information Technology Commission (CITC) , the Kingdom's telecom regulator, last month extended the deadline for submitting applications for the new mobile licence to Feb. 24 and for the fixed-line licence to March 10 in response to requests from several interested parties.

According to previous announcement, the last date was Jan. 20 for mobile and Jan. 27 for fixed phone. Copies of applications for both licences can be downloaded from the CITC Web site (www.citc.gov.sa) or can be collected from its office in Riyadh.

CITC said that the planned licensing is a major milestone in the liberalisation of the Kingdom's telecom sector, and added that the organisation was committed to issuing the licences at the earliest.

The new land phone licence will break the monopoly of Saudi Telecom on landline phone services.

Etihad Etisalat , a consortium of companies led by UAE telecom giant Etisalat, intends to compete with international companies for the second land phone licence after it successfully grabbed the second GSM licence two years ago.

"Our company has decided to compete for the second land phone licence after conducting a series of feasibility studies on the viability of such an investment," Khaled Al-Kaf, the company's CEO said in a recent statement.

He said the infrastructure facilities established by Etihad Etisalat ( Mobily ) during the past two years would enable the company to provide a better service.

Last year, the Mobily chief had announced plans to link all parts of Saudi Arabia with an optical fibre network. Etihad Etisalat 's entry into land phone would diversify its investment and lead to gaining better returns for its shareholders.

BY HABIB SHAIKH

© Khaleej Times 2007