Saturday, May 05, 2012

(this item was originally published on Thursday)

DUBAI (Zawya Dow Jones)--Saudi Telecom Co. (7010.SA), or STC , the kingdom's biggest telecom operator by market capitalization, will invest tens of billions of Saudi riyals over the coming decade to connect Saudi homes with high speed internet, underlining its expectation that data will a future big revenue generator for the company, the telco's KSA chief executive said.

"We are pushing for fiber to the home and its tens of billions of investment. We are looking at it as a business case of 10 years, but the majority is going to happen in the first four years," Jameel Abdullah Al Mulhem told Zawya Dow Jones in an interview. "We are looking to provide 500,000 homes with fiber in 2012 and increase this to 2 million homes in 2013," he added.

The growing importance of data to the company was rammed home last week when STC posted a 60% rise in first-quarter net profit, as it added more mobile and fixed broadband customers.

Al Mulhem said another big driver of its improved quarterly performance has been its success in wining a number of government and private sector projects where the telco provides mobile, fixed and TV services.

"There are big investments happening from government and also public companies. All of these projects were publicly tendered and won by STC," said Al Mulhem, adding that their projects aren't "one-offs because there are 10-15 kind of projects".

Al Mulhem also said that hosting a mobile virtual network operator on its network, or an MVNO, is at an early stage, but he sees it happening in 2013.

"The regulator has not completed the public consultation yet and there are questions. Most probably it will be a 2013 launch depending on the networks. For us we are ready because we have the network. The question is who is going to come and at what price," he said.

Al Mulhem added that given the maturity of the local market, with a penetration rate of 200%, an MVNO will create pricing pressure.

"(But) yes you will get some return as a wholesale relationship, but it's up to the regulator that those MVNOs are profitable and that they don't jeopardize the traditional services and revenue of the operators," he said.

-By Shereen El Gazzar, Dow Jones Newswires, +9714 446 1684 Shereen.elgazzar@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

05-05-12 0740GMT