Third Saudi Licence Goes To ...

Saudi Arabia has shocked almost no-one in the mobile world by deciding to award the country's third mobile licence to MTC, the acquisitive telco based in neighbouring Kuwait. According to reports on the Saudi state news agency, the SPA, this morning, the third licence went to a consortium headed by MTC, which will use the name "Saudi Mobile Telephone Company". The new outfit apparently has a capital of US$3.7 billion and tabled the highest bid for the franchise, agreeing to spend US$6.1 billion to acquire the rights to offer mobile phone services in the Kingdom.

According to the SPA, the new company beat off bids from six other firms, and will invest between US$6 billion and US$8 billion in its network and services over the first five years of operation.

MTC, which was founded in 1983, is capitalized at US$21 billion and has operations spanning no fewer than 20 Middle Eastern and African nations. The company currently has some 27 million mobile customers and in 2006 it posted net profits of just over US$1.05 billion. This marked a two thirds increase on the figure for 2005.

Two years ago, the Saudi government broke the monopoly in its domestic mobile sector by awarding a second license to a consortium led by Etisalat, which now has 6 million subscribers. State-owned Saudi Telecom, which still controls the fixed line sector, has about 8 million customers.