Mobily and STC to finalise tower deal by 2011 end

The deal is to enable both telcos to reduce network maintenance costs.

Tags: Mobily (www.mobily.com.sa)Saudi Telecom Group (http://www.stc.com.sa/cws/portal/en/stc)United Arab EmiratesZain - Saudi Arabia
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Mobily and STC to finalise tower deal by 2011 end Khaled Al-Kaf of Mobily says that both the operators' towers would likely be spun off into a separate company, with Mobily and STC becoming tenants.
By  Nithyasree Trivikram Published  June 28, 2011

Saudi Arabian telco Mobily plans to finalise a tower-sharing agreement with the state-owned Saudi Telecom Company (STC) by the end of this year, Mobily's chief executive, Khaled Al-Kaf was quoted saying in a Reuters report.

"We are trying to conclude this year," Al-Kaf said adding that both Mobily and STC are anxious to complete the deal.

Upon finalising the tower-sharing deal, which is to be the first-of-its-kind in the Gulf, it will allow both the telcos to cut network maintenance costs in Saudi Arabia, which is stated to be more than twice the size of France and Germany combined.

Both operators together constitute more than 80% of Saudi Arabia's mobile subscribers. While STC operates around 11,000 towers, Mobily has about 7,500 towers.

Both the operators are yet to decide on whether the deal will be a 50-50 partnership, the report said.

Al-Kaf said that both the operators' towers would likely be spun off into a separate company, with Mobily and STC becoming tenants. He also said that a third telco, Zain Saudi, could later join the tower company.

"We would welcome other operators, either as a partner or a customer, (but) for the time being it's between us and STC," he added.

Earlier, in February this year, a Reuters report stated that STC and Mobily could sell a large stake in a combined $2.5 billion merged towers business.

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