LG Electronics signs GSM deal with Itsalat International

The agreement will boost sales of LG Electronics' GSM products through Itsalat's 20-plus outlets in the Kingdom, and further raise the profile of the LG brand in the GCC's largest market.

The tie up is expected to generate significant over-the-counter sales, but as much as 70 per cent of the business will come through Itsalat's wholesale channel, officials say.

LG is the world's fourth largest mobile handset manufacturer, with a seven per cent global market share and total unit sales in 2004 of 44 million. LG's mobile business in Saudi Arabia was valued at around US$10 million last year, and the digital leader expects sales volumes to double in 2005.

"With mobile phone penetration in Saudi Arabia at around just 30 per cent, the room for growth in the Kingdom is significant, and strong distributor partnerships will help LG Electronics expand the market share of its GSM products as effectively as possible," said C.K Cho, General Manager of LG Electronics Saudi Arabia. "Itsalat has a proven track record, an established network, and service levels which meet the expectations of LG customers in Saudi Arabia."

LG hopes to secure US$300 million in mobile handset sales in the Middle East and Africa this year. Globally, it is aiming for 50 per cent growth to secure the top three spot by 2007. By 2010, LG Electronics wants half of all its sales to come from handsets. That's up from 28 per cent last year.

C.K Cho signed the Itsalat partnership agreement at a meeting in Dubai recently with Itsalat MD Abdul Hameed Al-Sunaid. Nassif Akkawi, Sales Account Manager, Itsalat, and Simon Kim, Telecommunication Products Senior Manager LG Saudi Arabia, also attended the signing ceremony.

Itsalat's Abdul Hameed Al-Sunaid said: "We're delighted to join hands with LG Electronics in Saudi Arabia. The combined strengths of both companies will offer greater product service and choice to customers."

Established in 1993, Itsalat International Co. is one of the region's largest mobile phone and access providers, with annual sales revenues in the region of US$700 million and 1,000 employees.

The company has offices across the GCC, Levant and North Africa and more than 50 showrooms. It is the certified distributor of leading international mobile phone brands, and operates its own approved service centres. Launched in 2001, Itsalat's online platform is a major asset, with a wide range of content services and around 500,000 subscribers.