Etisalat to invest $267m in Saudi network infrastructure

$267m investment in 3.5G network in KSA in response to unprecedented demand

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By  Ronan Shields Published  November 8, 2007

Etisalat is boosting its Saudi Arabian mobile network infrastructure by investing $267.4 million into its 3.5G network expansion following unexpected levels of end-user demand.

The UAE-based company, which operates under the Mobily brand in Saudi Arabia, claims that its 3G services have attracted almost 2 million customers, surpassing the previously anticipated demand for its services.

Mobily has teamed with vendors Ericsson, Huawei and Nokia to begin the second phase of its network expansion, which has seen a raft of market firsts in Saudi Arabia including the kingdom's first HSDPA mobile internet facility.

The company aims to use the investment to further roll out third-generation network services to offer increased area coverage. Mobily earlier reported that its 3G services were available in 23 towns and cities in Saudi Arabia, as of July 2007, and that its network compromised 1000 base stations.

The investment follows some criticism of Mobily's KSA network. In a statement released to the media, Mobily conceded that high traffic levels on its network resulted in some performance problems and added that a "huge [network] expansion" will take place within the next month.

In the statement, Mobily added that it "refuses any questioning about its credibility in dealing with its subscribers" and also hit out at market rival Saudi Telecom Company (STC) claiming that "other companies followed in Mobily's steps although they questioned the service quality at first."

Mobily is likely to face increasing competition in KSA, with other operators expressing an interest in the country. Kuwait-based Zain recently declared that it hopes to launch its mobile services in Saudi Arabia in the first half of 2008, where Mobily commands a 40% market share behind incumbent operator STC.

In addition to the network expansion plans, Mobily also revealed that it recently signed international agreements with T-Mobile, Orange and Austrian operator One Gmbh, to activate MMS traffic between the operators' networks.

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