Mobily expects to agree STC tower-sharing deal by end-2011

28 Jun 2011

According to Reuters, Saudi Telecom Company (STC) and Mobily, Saudi Arabia’s two largest mobile operators in terms of subscribers, are set to conclude a tower-sharing deal before the end of 2011. Citing comments by Mobily CEO Khaled al-Kaf, the news agency reports that the pending agreement would represent the first of its kind in the Gulf region. The pact is expected to allow the two cellcos to cut down on network maintenance costs; Saudi Arabia is the 14th largest country in the world in terms of land mass – more than twice the size of France and Germany combined. Kaf commented: ‘We are trying to conclude this year. We are both anxious to complete the deal. We would welcome other operators, either as a partner or a customer, but for the time being it is between us and STC’.

In February 2011 CommsUpdate reported that the two cellcos were keen to merge their collective assets, before selling off a 49% stake in the projected USD2.5 billion cell tower business to a strategic investor. It was believed that third cellco Zain Saudi Arabia would also be included within the scheme, in order to preserve a level playing field within the wireless sector. At the time Reuters reported that companies in the running for a slice of the combined cell tower business would include: GTL Infrastructure, India’s largest independent tower company, which has 32,463 towers, and may lodge a bid in association with Abu Dhabi investment fund Mubadala; Ericsson in collaboration with Saudi private equity firm Abraaj Capital; and SREI Infrastructure, the parent of Indian group Quippo, which was tipped to join forces with the Zamil Group.

Meanwhile, Kaf welcomed last week’s decision to cut intra-region roaming rates across the Gulf by 30% from July, saying: ‘This will bring a good elasticity of usage. I see growth in traffic and it will also increase revenues. Roaming rates were a little bit high, and we should be more aggressive on this. That value will be recognised by the customers, and that will generate profits’.