2G licence supplemented by 3G concession

11 Aug 2004

The Saudi Council of Ministers has confirmed that it has awarded an Etisalat-led consortium a 3G concession to complement the 20-year GSM licence it won last month. The additional licence will cost the consortium USD200 million on top of the USD3.25 billion already agreed for the 2G licence. Saudi Telecom, which currently enjoys a monopoly on the provision of 2G wireless services, has been given an option to apply for a 3G licence at the same price, on the proviso that it matches the technical plans proposed by Etisalat.

The exact composition of the new Saudi wireless licensee has been confirmed, with 65% of the consortium remaining in Saudi hands. The General Organisation for Social Insurance will own 15% of the company, while Alijomaih Holding Company, Addulaziz Al-Saghyir Commercial Investment Company, Rana Investment Company, Abdulla & Said Binzagr Company and Riyadh Cable Group will each take 6%. A further 20% will be floated on the national stock exchange within 30 days, leaving UAE-based Etisalat with 35%.

Last month the Etisalat consortium bid SAR12.21 billion (USD3.25 billion) for the 20-year concession, beating the group lead by South Africa’s MTN which offered SAR11.05 billion (USD2.94 billion), Egypt’s Orascom (USD2.61 billion), MTC Group of Kuwait (USD2.4 billion) and the Samawat Consortium, which includes Telecom Italia Mobile and tabled a bid of USD2.32 billion. The lowest offer, USD1.78 billion, was submitted by the consortium headed by Telefónica Moviles and backed by billionaire Prince Al-Walid bin Talal bin Abdul Aziz.

PriMetrica's GlobalComms, Arab News