Yemen prepares to license third GSM player

Investors are invited to take a majority shareholding in the new operator; with the government set to hold a 25% stake, and a 20% stake being sold to the public, possibly by way of a stock market floatation.

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By  Tawanda Chihota Published  May 22, 2005

The Yemeni minister of telecoms and IT, Abdulmalik al-Moalimi has announced the timeframe for the issuance of the country's third GSM licence. Reports suggest that the ministry has set a deadline of August 2 for the submission of bids. Investors are invited to take a majority shareholding in the new operator; with the government set to hold a 25% stake, and a 20% stake being sold to the public, possibly by way of a stock market floatation. The announcement comes almost a year after the government said that it would end the exclusivity status of existing GSM operators SabaFon and Spacetel. In April this year, al-Moalimi began making pronouncements that bids would be invited from telecoms operators interested in running the country's third GSM network in partnership with the government. The question remains exactly which telecoms firms would show interest in the proposed venture, though it is likely that the winning bidder will manage the network on behalf of the government. One of the potential bidders had been local fixed-line operator TeleYemen, which subsequently withdrew its interest. The introduction of a fourth mobile operator into the Yemeni market will make it one of the most competitive markets in the region. With the inauguration of the country's third mobile network, government-owned Yemen Mobile, in September 2004, the new CDMA entrant slashed call rates 50%, and further price competition is likely with the entry of another player into the market. The move to license a third GSM player, in which the government has a stake, also throws the long-term future of the CDMA operator into question, given the relatively small economies of the technology in the region and the lack of interconnection between GSM and CDMA networks.

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