Browse
related articles
This licence will give MTC a presence in the largest market in the Gulf Cooperation Council ("GCC") in terms of population and the largest economy in the Middle East and Africa, reinforcing MTC's position as the leading regional mobile operator.
The expected launch date of MTC's services in the KSA is early 2008 and the headquarters will be in Riyadh.
Commenting on the approval, Dr. Saad Al Barrak, Chief Executive Officer of MTC, stated:
"We are elated to have received the formal approval of our bid for the third mobile licence and sincerely thank King Abdullah, the Custodian of the Two Holy Mosques and His Government for their collective trust and confidence in MTC and acknowledge the CITC for their outright professionalism in the licence process. In return, we assure them and the Saudi community that our commitment to the Kingdom extends beyond providing world-class mobile services to our customers, as we share the same vision in promoting economic prosperity, creating jobs for locals and supporting communities wherever we operate."
MTC synergies
MTC has operations in five countries neighbouring the KSA and will maximise value creation as MTC's existing product portfolio, regional roaming, branding, skilled human resources and best practices will bring immediate benefits to the consortium. The company will benefit and leverage from its procurement synergies in reducing operation and capital costs (opex and capex) and will deploy next-generation network infrastructure to provide a wide range of voice, high-speed broadband (3G & 3.5G) data and advanced value services to drive its revenue share in the Saudi Arabian market.
Additionally, MTC has unrivalled Greenfield roll-out experience having successfully launched networks in 14 countries across MTC's 21 operations in the Middle East and Africa. Strong and distinguished local partners that include Saudi Plastics Factory, Almarai Company, Rakisa Holdings and Al Jeraisy Development Company will provide additional support and expertise.
MTC currently holds a 50% interest in the consortium which will be reduced to 25% following a mandatory initial public offering ("IPO") of the new mobile operator in the KSA.
CEO to be appointed
The MTC consortium announces the selection of Dr Marwan Al Ahmadi as the Chief Executive Officer of the future public joint-stock company. Dr Al Ahmadi will bring a wealth of experience to the KSA operation having previously served as Cisco's General Manager in the KSA. Joining MTC in 2004 as the Group's Chief Strategy Officer, he also served a stint as CEO of MTC's Bahrain operation, an operation recognised at the forefront of mobile technology in the region.
"Dr Al Ahmadi has been a key element in MTC's success story to date, he knows MTC's philosophy and internal workings and he will be able to exploit synergies from within the Group. I have full confidence that he will do MTC proud in KSA" said Dr Al Barrak
On his part Dr Marwan Al Ahmadi said: "I thank MTC's Board of Directors and the Consortium members for their faith in me and I look forward to the challenges ahead, certain that we will succeed in our relentless ambitions to delight the Saudi community with quality mobile services on the one hand and positively contributing to the economy on the other. Through utilization of the resources of MTC Group worldwide, I am confident our synergies will reap rewards for all our stakeholders."
Transaction details
On March 24, 2007, at a ceremony held at the CITC offices in Riyadh, the MTC Consortium was announced as successfully submitting the highest bid amongst 7 financial proposals.
Following today's notification by the CITC, the MTC Consortium is required to fund 80% of the licence cost within 3 weeks. The remaining 20% is to be made available within 2 weeks of incorporation of the Joint Stock Company, anticipated towards the end of 2007.
MTC Consortium is in the process of concluding Islamic Murabaha financing agreements with a consortium of Saudi and international banks to fund licence payments and business operations.
MTC Consortium is obliged to offer 40% of the shares of the company to the public as a key requirement of the incorporation process of the Joint Stock Company. An additional 10% of the shareholding is planned to be allocated to the Public Pension Agency and the General Organization for Social Insurance, 5% for each.
MTC will account for its holding as an associate and will have full operational control over the business.
UBS Investment Bank acted as sole financial adviser to MTC during the licence bid application phase of the transaction.
Posted by Medilyn Manibo, Assistant News Editor
