Saudi Telecom Company to discuss post liberalisation impact at CONNECT

Eleven consortia, including major regional operators, Etisalat, Orascom and MTC, have been selected as candidates for Saudi Arabia's second cell-phone license. The impact of this dramatic development on STC and the restructuring of Saudi's telecoms industry will be among the key highlights of a presentation by Khalid Abdullah Al Molhem, Executive President, Saudi Telecom (STC), at CONNECT - The International Telecoms Summit.

CONNECT, an IIR Telecoms and Technology event, will be held at the Crowne Plaza Hotel, Dubai, from May 30 to June 2, 2004. The theme of the Summit is "Maximising Profitability in Competitive Telecoms Markets" and will feature case studies, presentations, and two full-day workshops, conducted by 19 leading international and regional telecoms operators.

Molhem, one of the keynote speakers at CONNECT, will share his views on the future of the telecoms industry with mobile operators, ISPs, ASPs, content providers, solutions vendors and other telecom vendors and manufacturers attending the Summit. Commenting on his participation, Molhem stated, "The entry of a second GSM player is a welcome development, that we have anticipated and been preparing for since several months. We foresee several benefits arising out of this situation, for industry players and customers alike. The industry is currently growing at an average rate of 30 percent annually, and we are confident that a new player will expand the market, and drive further growth, rather than restrict STC's market share. The penetration of the telecom sector in Saudi Arabia is less than the international average, which indicates that there is strong potential for growth in the Kingdom. We expect industry growth to reach 7.9 billion dollars by 2007."

Sabine Enthammer, Executive Director, IIR Middle East stated, "Deregulation and liberalization are set to change the face of the Middle East telecoms industry. While Kuwait and Bahrain were the first to do away with monopoly, Saudi Arabia's STC is preparing to face competition for the first time. This situation is being replicated across the Gulf Cooperation Council (GCC) with the UAE and Oman also opening up their telecoms sectors to new players. CONNECT has been organized at this crucial juncture to highlight the growth opportunities available in the region."

Al Molhem stated, "The immediate impact of liberalisation is a shift in prices in the face of increased competition. The decreased pricing will tap into previously unexplored markets within the Kingdom, allowing more consumers to avail of GSM services. Thus, our market reach will be far greater. This will provide the right impetus to install cellular network infrastructure to remote areas in the Kingdom, further expanding the market. Consumers are extremely receptive to new technology and are quick to adapt to trends; the introduction of prepaid GSM cards in 2002 has boosted our revenues from SMS (short message service)."
"In order to maintain our market position, STC has been offering several value-added services as well as after-sales services to its subscribers. We invest nearly 5-6 billion Saudi riyals annually in developing better infrastructure. We also have plans to offer technical solutions and core services to GSM operators, which will be a new revenue stream for the company. There are plans to develop 'incubators' to encourage the development of new telecoms technology," he continued.

"I would also like to point out that STC has no intention of expanding operations beyond Saudi Arabia in the foreseeable future. Our focus has, and will remain with the Saudi market and we are committed to offering the best possible services to our subscribers here. We have a total of 7.5 million mobile phone users and have announced the addition of the '0' digit to precede existing GSM numbers from the 21st of April which will increase the available ten million numbers tenfold," concluded Al Molhem.