MTC set to claim third Saudi mobile licence

Kuwait's Mobile Telecommunications Company (MTC) looks set to become Saudi Arabia's third mobile operator after placing the highest bid for the licence.

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By  Administrator Published  March 29, 2007

Kuwait's Mobile Telecommunications Company (MTC) looks set to become Saudi Arabia's third mobile operator after placing the highest bid for the licence.

A consortium led by MTC agreed to pay US$6.12 billion for the licence, outbidding six other qualified bidders including Dubai-based Oger Telecom and MTN Saudi Arabia.

"We are delighted to have made the highest bid and look forward to confirmation of being awarded the third mobile licence in the attractive Saudi mobile market," MTC CEO Saad Al Barrak said.

The concession of the licence is still subject to approval by the Kingdom's council of ministers, the final stage in the auction process.

However, analysts said this week MTC will pay a high price for the victory.

The Kuwaiti phone giant bid US$1.5 billion more than its nearest competitor, the Samawat consortium, and almost double the US$3.26 billion paid by Etisalat for Saudi's second licence in August 2004.

"You pay a premium to buy entrance to larger markets such as Saudi Arabia," Marc Hammoud, a senior telecoms analyst at Dubai-based investment bank Shuaa Capital, told IT Weekly.

Hammoud valued the licence at around the US$2.2 billion mark.

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