Zain to launch mobile phone services in Saudi Arabia today

Riyadh: Zain Saudi Arabia will start operating the third mobile phone network in the kingdom today, it was officially announced by the company on the official Saudi Stock Market Tadawul's website.

Zain paid $6.1 billion, a regional record, for the right to run the kingdom's third mobile network and its success there is critical to the financial health of the whole company.

Economic analysts believe that Zain Kuwait will depend on Zain Saudi Arabia to increase its profits as it lacks any big affiliate capable of generating big profits. The success of the fledgling subsidiary is critical to the financial health of the group's entire operations.

Zain started its services in Saudi Arabia by offering people the opportunity to reserve special numbers, with tens of thousands registering their request.

Zain Saudi Arabia is a publicly-listed company on Tadawul with a share price of 24.25 Saudi riyals ($6.45) on Sunday, a 142.5 per cent premium over the par value of the shares at 10 Saudi riyals.

The Zain Group is listed on the Kuwait Stock Exchange with a current market value exceeding $27.5 billion (on Sunday).

Battle ahead

Once it launches its service, Zain Saudi Arabia is likely to sign up a lot of new customers in a short period.

Saudi Arabia's mobile market grew at an astonishing rate in 2007 and analysts have upgraded their forecasts for customer growth for the market's two incumbent operators, Saudi Telecom and Etihad Etisalat.

The Saudi market will be the first to experience a three-way battle between the Gulf's three largest telecom operators. The competition will expose any weaknesses in their marketing, branding and network coverage, and will provide some useful insights into other operators that want to compete with the big three in other markets.

Saudi Arabia will be the Zain Group's 21st network operation in the Middle East and Africa, making Zain the world's fourth largest mobile telecommunications network by geographic coverage, covering a population of more than 500 million from the Gulf to the Atlantic Ocean.

At launch date, Zain's coverage area will reach 95 per cent of the kingdom's population covering 53 per cent of the population in 36 major cities and 14 highways spanning over 4,000 kilometres.

Zain in Saudi Arabia has committed investments of over $1.5 billion in the development of the network. Recently the operation undertook a long testing phase with 9,000 mobile users that proved invaluable.