MTC Kuwait Bids US$ 6.1 Billion for Saudi Arabia's Third Mobile License



    DUBAI, March 24 /CNW/ - Mobile Telecommunications Company, the mobile
phone operator in Kuwait, has bid 22.9 billion riyals ($6.1 billion) for Saudi
Arabia's third mobile license.

    On March 17th, the board of directors of CITC, chaired by Mohammed Jamil
Mullah, Minister of Communications and Information Technology, selected the
seven consortia from nine applicants. Egypt's Orascom Telecom and
Al-Shoula-MTNL consortium were out of the fray. The other bidders were Samawat
- Bharti Consortium (India, Singapore), Oger Telecom (controlled by Lebanon's
al-Hariri family), Kingdom Turkcel (Kingdom Holding Co., owned by billionaire
Saudi Prince Alwaleed bin Talal bidding with Turkish mobile operator
Turkcell), Digi cel Tawacel Consortium, MTN Saudi Arabia Consortium & Abdullah
Al Rajhi Reliance Telecom (India).

    The 10 consortia bidding for the fixed license are: Optical
Communications Company (Verizon), Khaled Ahmed Al-Juffali Co. (WorldCall
Telecom of Pakistan), Saudi Telecom Holding Co. (Qtel-Atco), Al-Mutakamilah
(Hong Kong's PCCW), Electronet (Autelia of Italy), Etihad Etisalat (Mobily),
Atheeb Telecom (Batelco of Bahrain), Makkah Telecom (China Telecom), Al-Shola
(MTNL India) and Bayanat (Korea Telecom).

    The Remarkable Turnaround

    In 1999, the Kingdom aimed for one mobile phone for each three Saudis by
2006. At the end of 2006, Saudi Arabia had mobile penetration at 76%
(estimates).

    CITC has engaged in extensive consultation with the public, discussed
issues, and posted, in full, the questions and answers in its consultation
exercise. It has also displayed marketing savvy attracting over 19 bids for
the fixed and mobile licenses.

    By the end of the exercise, CITC will have implemented an extremely
successful licensing process, exemplary for the Arab world. Arthur D. Little
(ADL), the global strategy management consulting firm with a significant
presence in the Middle East, has been working with CITC throughout the
licensing process for the last 15 months.

    Fuelling the Second Expansion

    The Saudi telecom sector is poised to enter a second phase of rapid
expansion, as MTC activates the third mobile operation and the Saudi Telecom
Co competes with the new fixed players.

    With a modern regulatory framework now firmly in place, Saudi Arabia will
increase investments in state-of-the-art infrastructure that will meet the
demands of its increasingly tech-savvy population.

    Thomas Kuruvilla, Managing Director of Arthur D Little in the Middle
East, added: 'Where appropriate, the overall regulatory framework was updated
to ensure that consumers benefit from the latest technological changes and
provide a level playing field for the new licensee. The new licenses will
encourage additional investment in the fixed local access infrastructure,
catalyze the mobile market growth, and accommodate future trends in
convergence. Consequently, the Saudi telecom market, in our view, will soon
surpass that of many developed countries.'

    'The encouraging interest by international and experienced players are
the result of an extensive and elaborate series of public consultations
carried out by CITC, throughout the licensing process, which not only
generated substantial awareness of the new licenses but allowed interested
bidders to clarify their doubts and to increase understanding of the potential
of the telecommunications market in Saudi Arabia.'

    As evident through the competition for the licenses, the Kingdom has the
largest and fastest growing market in the Middle East - total telecom revenues
reached SR34.2 bn (US$ 9.1 bn) in 2005. Forecasts indicate that the number of
mobile phone and internet subscribers will both virtually double over the next
five years, while broadband subscribers will increase more than six-fold from
an estimated 90,000 in 2006 to 575,000 in 2011.

    By the time these licenses are active, CITC, supported by Arthur D.
Little, will have implemented one of the most open telecom sectors in the
Middle East - a remarkable turnaround for a country which until quite recently
was considered as having inadequate and high priced telecoms services.




For further information:

For further information: Arthur D. Little Limited Thomas Kuruvilla, +65
(0) 98461468 Kuruvilla.thomas@adlittle.com or Richard Mills, +44 (0)870 3366
696 Global Marketing Manager mills.richard@adlittle.com Or EuroPR Group
Richard Price / Sue Glanville, +44 (0)20 8971 6423 rprice@europrgroup.com 
sglanville@europrgroup.com

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