[2007-07-10]  MTC Saudi Arabia to Raise SR5.6 Billion
MENAFN - Arab News) RIYADH, 10 July 2007 — MTC Saudi Arabia, the third mobile operator, will float its initial public offering (IPO) for 560 million shares, or 40 percent of its equity capital, after Ramadan to raise SR5.6 billion.

Its Kingdomwide mobile communication services will be up and running in the first quarter of next year, said Marwan Al-Ahmadi, the newly designated CEO of MTC Saudi Arabia, at a press conference yesterday attended by Ahmed Al-Fifi, head of planning and business development at MTC and Khaled Al-Farraj, project manager.

He said the 25-year license allows his company to offer GSM, 3G and 3.5G and future state-of-the-art mobile telecommunications services at highly competitive rates throughout the Kingdom. They will be available simultaneously through its network, although it will have to rely on the Saudi Telecom Co.'s (STC's) infrastructural services in the same manner like Mobily (Etihad Etisalat).

The company is expected to leverage these networks to offer competitive regional roaming services. It will also help it to maximize the utilization of high-end technical resources. MTC currently holds a 50 percent interest in the consortium, which will be reduced to 25 percent following a mandatory IPO later this year.

Referring to the IPO, Al-Ahmadi said that of the remaining 60 percent shares, 25 percent each would be allotted to MTC and the Saudi shareholders comprising the MTC consortium. The General Organization for Social Insurance (GOSI) and the Pension Fund will own five percent shares each. These shares will be sold through all the Saudi commercial banks. MTC has not yet named the bank, which will manage the flotation and/or act as its adviser.

The CEO said MTC, which has established its presence in the Gulf and other Middle East countries, looked forward to a promising start in the Kingdom. First, the market penetration rate of mobile telecommunication services was not as high as made out to be, questioning the authenticity of the estimate (75 percent) mentioned in the press. "We should not forget that it also includes peak seasons like Ramadan and Haj."

The CEO pointed out that other factors that combine to lend a new momentum to the mobile telecom market include the Kingdom's high GDP and a per capita income which is expected to reach SR123,000 by 2020. Complementing it was Saudi Arabian General Investment Authority's (SAGIA's) 10x10 drive intending to make the Kingdom one of the top 10 competitive markets in the world by 2010.These ambitious targets cannot be attained without a state-of-the-art telecom sector, he served.

Elaborating on his statement, Al-Fifi said that while the accurate size of the mobile telecom market is still a matter of speculation, what is certain is that the area of coverage for broadband services does not exceed two percent of the Kingdom's population of 27 million. "So apart from providing normal services and products, we shall concentrate on the broadband services," Al-Fifi said.

The company has not yet finalized its brand name, which is still under consideration. In response to a question on the opening three-digit number, he said the options have already been submitted to CITC for approval. He would not go into the details at this stage.

On the question of Saudi manpower, he said they would comprise 70 percent of their work force within the first year of operation. The company has set up its office on King Fahd Road.

MTC received formal approval from the CITC and the Council of Ministers of its SR22.91billion ($6.109 billion) financial bid for the third mobile telecommunications license in the Kingdom. This notification allows the MTC consortium to establish a public joint-stock company to hold the license and operate the 3rd mobile telecommunications company in the Kingdom.


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