Launch of Saudi MVNOs postponed to 4Q14

24 Sep 2014

The chief executives of mobile virtual network operators (MVNOs) Virgin Mobile Middle East and Africa (VMMEA) and Jawraa Group (Lebara) have revealed that a lack of cooperation from Saudi Arabia’s existing telcos, alongside state security requirements, have delayed the two companies respective launches until later this year, Reuters reports. Yasser Alobaidan, CEO at Lebara, said: ‘Most of the challenges are interconnections with other operators’, while the head of VMMEA Mikkel Vinter added that MVNOs have also faced difficulties meeting the demands of Saudi’s security apparatus to allow for so-called lawful intercept, which allows for electronic surveillance of an individual. The two new mobile operators now aim to commercially launch by year-end. Although the Lebara executive disclosed that the company is planning to capture 5%-10% of the total market share within three years of launching operations, Vinter was more cautious on VMMEA’s prospects, pointing out that its other operation in the region – Oman – had two MVNOs with a combined market share of about 10% (and VMMEA claiming the majority): ‘It would be fantastic to match that, but Saudi has one more operator than Oman, it is a fiercer market and there are also new players coming in at the same time… Our business case is fulfilled with a significantly lower number than that. If we could get 10% between us in two-to-four years that would be a strong performance.’

As previously reported by TeleGeography’s CommsUpdate, in June 2013 the Communications and Information Technology Commission (CITC) shortlisted three companies to be awarded MVNO licences – Dubai-based Axiom Union Mobile, in collaboration with network operator Zain Saudi Arabia; VMMEA, with host provider Saudi Telecoms Company (STC); and Lebara, in partnership with Mobily. In April 2014, however, the CITC said that it would re-tender one of the MVNO licences, after revoking the authorisation provisionally granted to Axiom; the regulator is yet to announce the new recipient of the concession.