Three new landline firms in Saudi Arabia

Riyadh: Saudi Arabia has granted licences to three new landline telecommunication companies to operate in the Kingdom.

The decision was made by the Saudi cabinet during its weekly session in Riyadh on Monday. Three royal decrees pertaining to the establishment and operation of the companies have been issued.

Earlier, the Saudi minister of communication and information technology asked the cabinet to grant operation licences to the Optical Telecommunications Company, Saudi Company for Integrated Communications, and Ittihad Azeeb Company for Telecommunications.

Last year, 10 consortia led by international companies, including India's MTNL, applied for Saudi Arabia's second landline phone licence.

The licensing of the three landline companies to set up and operate landline phone network in the Kingdom is expected to break the monopoly of Saudi Telecom Company.

The cabinet decision stipulates that the three firms are to operate as Saudi joint stock companies, said Iyad Ameen Madani, the Saudi Minister of Culture and Information in statements following the cabinet meeting.

IPOs

The cabinet's decision, moreover, noted that 25 per cent of each of the three companies' capital should be floated through initial public offerings (IPOs) within 30 days of publication of the decrees for their licensing and establishment.

The cabinet advised the ministry of commerce and industry and the Saudi Capital Market Authority (CMA) to execute the decision's aspects that concerned them in coordinating with the Communication and Information Technology Commission.

Meanwhile, the cabinet amended Paragraph (2) of its decision No (15) dated January 23, 2007, to read as follows: "Twenty-five per cent of the capital of any company licensed to establish landline communication networks and provide services shall be put up for IPO. Ten per cent of the company's capital to be allocated for the Public Pension Agency and the General Organisation for Social Insurance to be distributed equally between the two (five per cent for each) in accordance with their desire.

If any of them declined its share, the percentage shall be put up for founders or public subscription in accordance with the consideration of the Capital Market Authority in coordination with the Communication and Information Technology Commission".