Mobily plans $1.1bn wireless expansion

Saudi mobile firm to invest in broadband and wireless networks over the next two years.

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By  Reuters Published  November 17, 2007

Etihad Etisalat (Mobily), Saudi Arabia's second mobile phone firm, said yesterday it would spend at least 4 billion riyals ($1.07 billion) in the next two years building broadband and wireless networks.

Mobily, which lost a bid this year to run one of Saudi Arabia's fixed-line networks, has invested 5.2 billion riyals building its mobile phone network in the world's biggest oil exporter, since 2005, Chief Executive Khaled Al Kaf said.

"We will aggressively invest in fixed-line substitution," Al Kaf told Reuters by telephone.
Mobily would invest "at least 2 billion riyals a year" in 2008 and 2009 in mobile and broadband infrastructure, Al Kaf said.

Mobily bought Bayanat al-Oula, one of two firms licensed to deploy WiMax wireless Internet access network in the kingdom, earlier this year.

"We will have a very good level of expansion broadband and WiMax thanks to the purchase of Bayanat," Al Kaf said.

The company, whose third-quarter profit missed forecasts of five analysts, now commands a 40% market share and expects this percentage to grow next year despite the launch of a third mobile phone operator, Al Kaf added.

Mobily and incumbent Saudi Telecom Co will face new competition when Kuwait's Mobile Telecommunications Co (Zain) starts a third mobile phone firm next year with other investors.

"Expansion in data services and in rural areas will provide important growth potential," he said.

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