DAMMAM, 8 May 2003 — Just a couple of months ago SAWA prepaid recharge cards were at a premium on the black market, but now the situation has reversed and a subscriber can buy a SR100 denomination card for just SR95. It is not that the market has shrunk or demand declined. On the contrary, the Saudi Telecom Company has confirmed that the market for prepaid mobile phones has expanded tremendously.
 
Normally, a retailer gets a SR100 SAWA prepaid card for SR94. During the last month, the level of competition among retailers has intensified to the extent that retail outlets in order to attract more customers are now willing to forgo a portion of their commission.
 
Prices vary from SR95 to SR98. However, large supermarkets and vending machines are still selling these cards for SR100 only.
 
In small cities like Jubail, Al-Ahsa and Khafji, the competition is stiffer, and hence almost all retailers are selling these cards at a reduced price. Obviously it does not worry STC as it is getting its return. It is the small retailer who loses his small commission. Retailers say that, following the shortage, STC flooded the market with the recharge cards and now there is a glut.
 
“A balance in supply and demand has to be struck so that this undercutting is controlled, otherwise STC is going to lose in the end,” said the manager of a supermarket in Dammam. He said the sale of prepaid cards at his shop has declined due to undercutting.
 
Many expatriates of Asian origin are reportedly involved in selling SAWA prepaid cards at a reduced price. These expats have arrangements with their Saudi colleagues who buy the cards in bulk from STC and then sell them at small outlets at cheaper prices. They also have agents who roam the market and offices and sell these cards at cheaper price.
 
Meanwhile, STC has streamlined the process of setting up new prepaid connections and now subscribers normally get their connection within a few minutes. At other outlets connections continue to be sold at reduced prices, and the outlets still do not require identification from new subscribers.

 

Saeed Haider, Gulf Bureau

© Arab News 2003