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Jan 12, 2003

Saudi Cabinet urges reduction in Internet service charges

RIYADH, 22 October — The Council of Ministers yesterday called for reduction of Internet service charges for end users. It also ordered a crackdown on Internet services received through satellite dishes and warned measures including withdrawal of license.

The weekly Cabinet meeting, chaired by Custodian of the Two Holy Mosques King Fahd, also decided to extend the cooperative health insurance scheme to cover Saudis working in private companies within two to three years.

"The meeting emphasized the need for expanding the bandwidth for Internet service and reducing the charges for Internet lines and the charges of end users to avert the use of alternative means," Information Minister Dr. Fouad Al-Farsy said quoting the Cabinet decision.

Meanwhile, a Shoura Council meeting also urged authorities to cut expensive Internet charges.

The Cabinet stressed that all Internet service providers (ISPs) as well as Internet users in the Kingdom must abide by telecommunication regulations and Saudi Telecom Authority (STA) rules. The Cabinet meeting authorized STA to report misuse of telecommunication equipment including satellite dishes by ISPs, companies and individuals to enable authorities to punish violators.

King Abdul Aziz City for Science and Technology and STA will together monitor adherence by ISPs and recommend measures to be taken against violators. Companies and individuals will be given a formal warning against using satellite dishes for Internet services before taking punitive action. "If they continue to use satellite dishes, STA and KACST will take deterrent actions including withdrawal of licenses," Al-Farsy said.


Sweeping cuts in mobile, and Internet rates announced

JEDDAH, 27 November 2002 — Saudi Telecom Company yesterday announced major cuts in mobile and Internet phone charges as well as in national and international phone call tariffs. The announcement said mobile phone connection charges will be slashed from SR300 to SR100.

Acting Minister of Posts, Telegraphs and Telephones Khaled Al-Gosaibi said charges for calls from land phones to mobile will be reduced on April 1, 2003, from 80 to 50 halalas per minute at peak hours and to 40 halalas at off-peak hours.

Charges for national calls will be reduced to 50 halalas per minute at peak hours and 25 halalas at off-peak hours to distances exceeding 200 kilometers. Calls within 200 kilometers would be charged 20 halalas at peak hours and 10 halalas at off-peak hours from April 1.

Gosaibi said telephone charges for Internet use will be reduced by 25 percent from Feb. 1, 2003. However, he said Internet users must pay SR10 monthly in advance to avail of this discount. The Finance and National Economy Ministry and Saudi Telecom Authority have approved the new discounted rates.

The minister also disclosed plans to cut mobile phone connection charges from SR300 to SR100 from Jan. 1, 2003 and reduce mobile phone charges from 80 to 50 halalas per minute at peak hours and from 50 to 40 halalas at off-peak from April 4.

The company has also decided to increase the number of minutes in the Silver Bouquet cards from 80 minutes to 100 and reduce the charge after this period from 70 to 40 halalas per minute. It also decided to increase the number of minutes in the Golden Bouquet cards from 280 to 400 and reduce the charges from 60 halalas to 35 halalas per minute from April 1.

“With the new cuts, mobile phone charges in the Kingdom will be the lowest in the Middle East and the Gulf region,” Gosaibi said.

Referring to international telephone charges, Gosaibi said they will be cut by an average 15 percent effective from July 1. The new cuts will not cover pre-paid cards and vary from one country to the other.

The announcement to cut phone tariffs comes after the government decided to float 30 percent of STC shares for public subscription. As per the decision 90 million shares will be sold at the rate of SR170 per share beginning Dec. 17.

STC was separated from the Ministry of Posts, Telegraphs and Telephones and founded as an independent company in 1998 with a capital of SR12 billion. The company said it made a profit of SR2.8 billion in the past nine months. Its third quarter revenues amounted to SR17.4 billion, 17 percent more than last year.

Telecommunications is one of the 20 major sectors listed by the government for privatization. The government last year approved a bill, which was passed by the Shoura Council, to end the state’s monopoly of the telecom sector without ruling out the participation of foreign investors.

ISPs to ‘lose heavily' despite new rate cuts

RIYADH, 16 June — Internet Service Providers (ISPs) have said that they are losing heavily this season despite the discounted rates announced by the Saudi Telecom Company (STC) effective from July.

“The new prices only reduce the minimum ISP price per hour to 85 halalas. This is a reduction of 15 percent for the minimum price from ISP, but only one percent of the total cost to end users. The new cost for end users went down only from SR4 to SR3.85 per hour,” Kais Al-Essa, operations and technical services manager of Dammam-based Sahara Network, told Arab News.

According to Anwar Helmi, marketing manager of Arabnet in Riyadh, the new concession will benefit only large ISPs, while those in the middle range will lose heavily, especially during the start of the vacation season from this month. He said there are currently 28 ISPs, of whom only five are in the top end.

Only the major ISPs will be able to offer discounts to their clients, leaving the middle range service providers in the lurch. Moreover, KACST regulations do not cover companies providing Internet service via satellite.

The cumulative effect of all this has translated into an adverse impact on the middle-level ISPs, Anwar said, adding that the STC was earning three times more per hour than the ISPs.

Pointing out that Internet service charges in the Kingdom continue to be high compared to other Gulf states, Al-Essa said growth in Internet usage in this country would not be possible unless steps are taken to improve “the equation of cost” for the ISPs and increase the subscriber base by bringing down the cost for the end user.

The 50 percent discounts to the ISPs from STC and 42-71 percent discounts allowed by King Abdul Aziz City for Science and Technology do not go far enough to ease the burden on the ISPs, he said.

Al-Essa observed that the cost of providing Internet services to ISPs from the beginning has been so high that none of the ISPs was able to break even until they had high international capacities.

“These capacities reach over 20 Mbps from KACST. Keeping in mind that the current average ISP has only 6.2 Mbps, this leads us to believe that over 90 percent of the ISPs have been losing since the advent of the Internet in the Kingdom,” he said, adding that this is basically the cost of connectivity incurred by the ISPs to STC and KACST.

According to Al-Furaih, Saudi Arabia has the highest subscription rates in the region. “Here it costs around SR 250,000 for two megabytes, compared to only SR50,000 in Bahrain.

There are four tiers of subscription tariffs for Internet use in the Kingdom: the amount paid by ISPs to both KACST and STC and that paid by individual subscribers to the ISPs.”

According to Aarif Al-Suwaidan, director of public phones STC will slash international phone call charges by up to 63 percent to 223 countries from July 1.

He said STC will charge SR5 per minute instead of SR5,5 for calls to India, Bangladesh and Sri Lanka and SR4.5 in place of SR5.5 for calls to Pakistan. Callers to the United States and Canada will enjoy a 25 percent discount as the charges will be cut from SR4 to SR3 per minute.

Source: 2002 Arab News. All Rights Reserved

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12 January 2003 08:09:17 PM