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Competition and privatisation looms for STC

Saudi Arabia's Shoura Council this week passed a draft bill aimed at breaking STC’s telecoms monopoly. Council member Abdul Aziz Al-Suwayegh, confirmed the bill is ready to be passed to government for approval.

Saudi Arabia has moved a step closer to opening up a competitive telecommunications market. The Kingdom’s Shoura Council this week passed a draft bill aimed at privatising STC and breaking its monopoly, according to Council member Abdul Aziz Al-Suwayegh. The bill will now be passed to government for approval.

The Council’s bill also calls for the creation of an independent telecoms watchdog, although the Ministry of Post and Telegraph and Telephone is expected to retain existing powers over the development of telecommunications in Saudi Arabia.

The aim of the bill, according to Shoura Council members, is to inject competition in a way that will accelerate the development of higher quality telecommunication services at cheaper cost. It will also help the sector to catch up with the rising demand from other sectors as well as the demands of the fast growing population.

Inviting direct foreign investment into the telecommunications sector is also recommended in the bill, despite the fact that the policy-steering Supreme Economic Council in February drew up a list of sectors to be excluded from foreign investment that included telecommunications. That list, according to a report in Arab News, is currently being modified.

Arab Newsreports that the Shoura Council bill contains 11 chapters covering general rules, licensing, rules of competition, frequencies, networking, machinery and equipment, utilisation of real estate, and violations and fines.

The bill also defines the general policies of the sector and the general framework for expansion and development as well as the rights of the government, service providers and beneficiaries.

Fixed line expansion has not progressed as fast as businesses in Saudi Arabia would like. The Kingdom has more than three million land lines serving a population of 17 million people, and almost two million mobile lines. Mobile networks are expanding faster than fixed line with an additional one million lines being planned at the moment.

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