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Multibillion riyal cell phone deal awarded to Ericsson and Nokia
Riyadh, 9TH August 2001

 Saudi Telecom Company (STC) announced yesterday that it has awarded an SR2.545 billion ($678.66 million) project to Ericsson and Nokia to expand the Kingdom’s mobile phone system by adding 2.8 million lines to the network within two years.

The Swedish companies won the multibillion riyal contract in competition with other international companies, including Lucent and Motorola of the United States, an STC release stated.

The STC will hold a press conference on Sunday to give details of the contract.

The Saudi telecom giant is also expected to announce new cuts in mobile connection and telephone charges shortly before the opening up of the market to international companies. “On the basis of the agreement, the two companies will provide STC with the equipment and materials required for mobile phone network expansion during the next two years,” the STC said. The two international companies have been given contact to construct a maximum 2.8 million mobile lines.

As per the contract the cost of a single mobile line will be SR909 ($242) instead of SR1,028 ($274) in the last expansion project. But Saleh Al-Jasir, director general of marketing, told Arab News that the cost would exceed SR909 as expenditures linking the lines with the ground network would be added to it. The upper limit in the contract gives the STC the choice to either allow the two firms to complete the expansion project or stop at a number that could meet the requirements of subscribers.

At present, the company has 2.2 million mobile lines.  “Once the new expansion is completed, the number of mobile lines will double,” Jasir said.

The new project will help give coverage to all major roads and cities in the Kingdom and improve the performance of the existing network, the STC statement said. The company has improved its services to mobile users — whose number crossed two million last May — and has facilitated the quick payment of phone bills.

Last year, STC awarded Ericsson a SR1.13 billion ($302 million) contract to add 1.1 million GSM connections. There are 2,505 towers and 19 exchanges on the Kingdom’s mobile network, which cover 17 main roads with a total length of 6,000 kilometers.

The growth rate of mobile phone use in the country is estimated to be between eight and 10 percent per month.

STC was set up in 1998, with over SR12 billion ($3.2 billion) in assets, in a move to privatize the sector. Its sales rose from SR9 billion ($2.4 billion) in the first year to SR17 billion ($4.53 billion) last year.

The STC is working with Ericsson to carry out one of the largest programs to train Saudis on planning, designing and implementing telecom networks and installing towers and exchanges. 280 Saudis have already graduated from Ericsson’s training center in Riyadh as telecom engineers, assistant engineers and technicians.

Source: Arab News©

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09 August 2001 06:06:04 PM

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