Shoura Council passed yesterday a draft bill to end the state’s
monopoly of the telecom sector and allow foreign investors. The bill,
which is subject to government approval, allows for the establishment
of new shareholding companies while not ruling out foreign investors,
Council member Abdul Aziz Al-Suwayegh said.
“The bill aims
firstly to break the monopoly over the telecom service,” which is
controlled by the Saudi Telecom Company (STC), Suwayegh said. The
government has been considering plans to privatize the firm which also
controls the Internet and mobile services.
recommended the setting up of joint stock companies for providing
services without stipulating a minimum capital. The bill aims at
paving the way for the development of quality telecommunication
services at cheaper cost with the free play of market forces. It will
also help the sector to catch up with the rising demand from other
sectors as well as the demands of the fast growing population.
another Council member, the new bill, which will expedite the
restructuring of the telecommunication sector, will coincide with the
founding of a Telecommunication Authority to supervise the whole
sector and monitor the prices and the quality of services. However,
the proposed authority will by no means reduce the significance of the
Ministry of Post Telegraph and Telephone, he added.
The 11 chapters of
the new bill cover general rules, licensing, rules of competition,
frequencies, networking, machinery and equipment, utilization of real
estate, and violations and fines.
The bill also
defines the general policies of the sector and the general framework
for expansion and development as well as the rights of the government,
service providers and beneficiaries.
The Kingdom has
more than three million land lines and almost two million mobile
lines. Four foreign companies — Ericsson of Sweden, Finland’s
Nokia, and Motorola and Lucent Technologies of the United States —
are bidding to expand the GSM network by one million lines, according
to the Middle East Economic Digest. Saudi Arabia also has just under
200,000 Internet subscribers and an estimated 600,000 users, figures
which IT experts term modest for a population of more than 20 million.
introducing competition to the vast Saudi market would upgrade the
service and cut its existing high rates. An international e-commerce
conference in Riyadh last week, among a list of recommendations,
called on the authorities to cut telecom rates and promote electronic
trade in the Kingdom.
The conference said
the Kingdom must have high quality and reliable telecom facilities,
and that plans to upgrade the telecom infrastructure must be
Supreme Economic Council in February drew up a list of sectors to be
excluded from foreign investment, including telecommunications. But
the list is being modified.
Source: Arab News© SPA