Kuwait City and Riyadh, Saudi Arabia-Mobile communications opportunities are beginning to sprout throughout the Middle East and Persian Gulf regions, opening up huge new opportunities in the telecommunications market.

Those opportunities are setting off a land grab, creating new powerhouses that never existed before and ultimately opening new markets and potential partnerships for the electronics industry.

One rising star is Kuwait¡¯s Wataniya Telecom. Launched in December 1999 as the second licensed GSM provider in Kuwait, Wataniya Telecom has become Kuwait¡¯s leading mobile communications company and is expanding at a rapid rate. It owns 40 percent of the consortium that was awarded a contract in October to build a GSM system in the north of Iraq.

Another 51 percent of that contract is owned by Asia-Cell Telecom, based in Sulaymaniya, Iraq, which operates a GSM network that provides voice, SMS and voice-mail services. United Gulf Bank of Bahrain owns the remaining 9 percent.

Kuwait¡¯s Wataniya Telecom also owns 50 percent of the Tunisian operator Tunisiana. The company has just won a GSM license for Algeria, and is bidding for one in Iran. 

The Wataniya consortium bid $421 million for the Algeria license, edging out Telefonica of Spain¡¯s bid of $409 million, and MTN of South Africa¡¯s $375 million. Wataniya, the Kuwaiti telecom (National Mobile Telecommunications Co.), now operates in four countries, Kuwait, Tunisia, Iraq and Algeria with hopes for one in Iran.

Algeria¡¯s first GSM network is government-owned. The license for the second network was bought by Egypt¡¯s Orascom in 2001 for $737 million, nearly twice the price the Watniaya consortium just paid for the third.

Algeria, which has a population of 32.2 million, currently has a mobile penetration rate of 4.5 percent, which leaves significant room for further growth. In fact, it is estimated that there are more than 900,000 requests on demand that are not satisfied by the existing two networks. Pundits estimate that Algeria¡¯s 1.3 million subscribers will grow to more than 10 million over the next five years.

¡°Algeria has proved that a proper privatization program with transparent processes attracts foreign investment that will favorably stimulate the economics of the country and we hope this trend will continue in the region,¡± said Faisal Al-Ayyar, chairman of Wataniya Telecom. ¡°Wataniya Telecom¡¯s Algerian network deployment program will commence immediately with a target of providing service within six months.¡±

Wataniya Telecom is a member of the KIPCO Holding group, which has assets of more than $10 billion and is one of the leading diversified holding companies in the Middle East and North Africa. The largest private sector company in Kuwait, KIPCO employs more than 10,000 people internationally.

Meanwhile, in Saudi Arabia potential bidders for a license to operate the Kingdom¡¯s second mobile service are being asked to provide input on what criteria they want in the bid tender. Requests for bids will come later. Winning the license will not be cheap.  The asking price reportedly will be about $1.8 billion.

News that a license for a second mobile service in the Kingdom would be awarded in late 2004 was announced last month by Saudi Arabia's Communications and Information Technology Commission (CITC), the country's regulatory body for the IT and telecommunications sector.

The size of the telecom market in Saudi is estimated at $7.2 billion, with the mobile sector accounting for 70 percent.

Saudi Telecom Co. (STC), the only mobile service provider at this time, reported that revenues for mobile service reached $3.44 billion (SR 12.9 billion) in 2002. The number of its mobile subscribers, as of the end of Q3 2002, had reached 6.802 million-consisting of 3.417 million prepaid customers and 3.385 million post-paid.

By: DocMemory
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