MTC Group tops Saudi bid with UD$6.12 billion offer

The operator expects to launch in the kingdom early in 2008.

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By  Administrator Published  April 1, 2007

A consortium headed by MTC Group was judged to have submitted the highest bid for the kingdom's third GSM licence on March 24. The Kuwait operator offered a whopping US$6.12 billion.

"This success underscores MTC's leadership position in the Middle East and beyond and recognises the trust that the kingdom has placed in us," commented MTC Group CEO Saad Al Barrak. "We have a strong consortium of Saudi partners, the most achievable synergies, and the operating expertise to bring world class services to the people of Saudi Arabia," he added.

MTC currently holds a 50% interest in the consortium, which will be reduced to 25% following a mandatory initial public offering of the new mobile operator in the kingdom and allocations to two government entities. Local consortium partners include a number of Saudi Arabian businesses, including Saudi Plastics Factory, Almarai Company, Rakisa Holdings and Al Jeraisy Development Company. The expected launch date of MTC's services in Saudi is early 2008.

The Kuwaiti-owned company headed-off competition from several rival conglomerates to rival incumbent mobile operators, Etisalat-backed Mobily and state-owned Al Jawwal.

The licence fee is almost double the US$3.4 billion paid by Etisalat in 2004 for the kingdom's second mobile licence despite the addition of over 10 million mobile subscribers in the period since Mobily entered the market in May 2005.

It is estimated that Saudi Arabia has a mobile penetration rate of 70%, with a "high" average revenue per subscriber amounting to US$35 per user per month according to MTC estimates. The kingdom also boasts a population of 26 million, with 58% of the inhabitants aged under 25.

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