GO Telecom signs IRU agreement with STC

6 Jun 2014

Saudi Arabia’s fixed service provider Etihad Atheeb (GO Telecom) has signed a SAR408 million (USD108.78 million) Indefeasible Rights of Use (IRU) agreement with Saudi Telecom Company (STC), days after scrapping a similar agreement with Bayanat Al-Oula, a subsidiary of Etihad Etisalat (Mobily). Under the new deal, GO Telecom has been granted the rights to use 30,000 fibre-optic access points for an initial period of 15 years in order to provide broadband access and fixed telephony services to residential users and private businesses. The deal also allows for the number of access points granted to GO Telecom to be increased to 100,000 in the future. According to a statement published on the Saudi Arabia Stock Exchange’s (Tadawul’s) website, ‘this agreement will enable GO to enhance its competitive edge in the vital broadband market through expanding its coverage area and diversify its offering to the market’. Further, GO Telecom pointed out that the value of the contract includes ‘wages, maintenance and operation’, and will be paid in installments over a five-year period.

As previously reported by TeleGeography’s CommsUpdate, at the end of March 2014 GO Telecom signed a deal with Bayanat Al-Oula for the rights to use 50,000 fibre-optic access points in order to deliver broadband access to residential and business users; the IRU agreement was linked to a Memorandum of Understanding (MoU) signed on 20 August 2013 between Bayanat Al-Oula and GO Telecom’s main shareholders – Atheeb Trading Company, Batelco of Bahrain and Al-Nahla Trading Company – to acquire the fixed line provider. However, in a surprise announcement last week, GO Telecom said that the deal has been terminated due to ‘some technical difficulties and logistics’, while also revealing that negotiations between the two sides in regards to Bayanat Al-Oula’s acquisition of GO Telecom had been cancelled as well.