India's Bharti and Reliance-led consortium lost out in the race for Saudi Arabia's third mobile phone network's license, which was won by Kuwait's Mobile Telecom Company (MTC) with a bid offer of SR 22.91 billion ($6.11 billion).
Many international telecom companies were vying to win the Kingdom's third mobile license, including Samawat-Bharti (which offered SR17.25 billion) and Abdullah Abdul Aziz Al-Rajhi-Reliance (SR11.25 billion).
The Saudi Council of Ministers yesterday at its weekly Cabinet meeting, chaired by Crown Prince Sultan, approved the setting up of the Saudi Mobile Telecom Company (SMTC), a firm established by MTC.
"The new company is licensed to establish and operate a mobile telephone network and provide its services at local, national and international levels," Culture and Information Minister Iyad Madani told the Saudi Press Agency.
The company plans to raise its customer base to 70 million and its capitalization to USD 30 billion by 2011. Saudi Arabia is the Middle East's fastest growing telecom market with total revenues from mobile and land phones reaching SR34.2 billion (USD 9.1 billion) in 2005.
Forecasts indicate that the number of mobile phone and Internet subscribers will virtually double in the next five years.
At present there are 18 million mobile phones and four million fixed line phones in the Kingdom. Etihad Etisalat (Mobily), a consortium led by UAE telecom giant Etisalat, won the second GSM license in 2004 paying SR12.21 billion. State-owned Saudi Telecom claims 14 million users and Mobily 6.5 million users.