Eight consortia, including SA cellphone giant MTN, are in the race for a second cellphone operator licence in Saudi Arabia, the Communications and Information Technology Commission (CITC) said on Saturday.
Bidders to become the second GSM operator in the lucrative Saudi market, which has about eight million mobile users with a growth rate of about 30%, also include firms from Egypt (Orascom), Italy, Kuwait (MTC), Spain (Telefonica Moviles) and the United Arab Emirates (Etisalat).
The CITC listed the eight as Emirates Telecommunications Corporation (Etisalat), Vodafone and Saudi Partners Consortium (Vodafone), Kingdom Telefonica Consortium (Telefonica), MTC and Partners Consortium (MTC), MTN Saudi Arabia Consortium (MTN), Orascom Telecom Saudi Arabia Consortium (Orascom), Samawat Consortium (Telecom Italia Mobile) and Oger Telecom Consortium (Bouygues Telecom).
Three of the 11 consortia which prequalified in April, including Germany’s Deutsche Telekom, did not present final offers. A CITC source said Deutsche Telekom and Mobilkom Austria had unsuccessfully sought a postponement of the deadline.
The third, Malaysia’s Maxis, was previously reported to have dropped out. The statement did not say when the winner would be announced, but a CITC official recently told said the winning consortium is likely to be chosen in late July or early August.
The second operator, who will break Saudi Telecom’s monopoly over cellular services, ”must be announced by October, according to the government timetable.
A third operator will enter the market in 2006,” Muhareb said. Potential bidders had been required to form a consortium of at least five Saudi companies and an international mobile operator, with foreign investors allowed to buy up to 49% of the joint company to be set up to operate the new GSM.
The minimum stake required for foreign investors was 15 percent. Twenty percent of the company that will operate the 25-year licence must be sold off to the public, and a public offering for another 20% is required in the third year of operation.
The CITC said Saturday the selected candidate for a GSM service might also qualify for a 3G license if its proposal is deemed adequate.
Billionaire Prince Al-Walid bin Talal bin Abdul Aziz, who is partnering Telefonica of Spain, was recently quoted as saying the investment in the project could reach one billion dollars.
An Arab industry report has predicted that revenues in Saudi Arabia’s GSM market will soar to $7,9-billion by 2007 on the back of the partial privatisation of state-owned giant Saudi Telecom and increased competition.
Although Riyadh is opening up the mobile sector to competition, Saudi Telecom will retain a monopoly over land lines and Internet services until 2008. – Sapa-AFP