Saudi Telecom bags Bahrain's 3rd licence for $230mn
UPDATE 1: Arab telecom major wins licence ahead of Batelco, Zain.
Saudi Telecom (STC), the biggest Arab operator by market value, acquired Bahrain's third mobile licence for 86.68 million dinars ($230 million), Bahrain's regulator said on Thursday.
"Economic and social integration between the two kingdoms, illustrated by the cross-border trade and travel, makes STC the natural partner," Fahad bin Mushayt, director of mergers and acquisitions at STC, told a news conference.
Several million people cross a causeway linking Bahrain to Saudi Arabia every year, and analysts have said the licence would help STC guard against losing customers to Kuwaiti rival Mobile Telecommunications Co (Zain), which operates in all three countries.
Bin Mushayt said STC plans to start operations in Bahrain in the second half of the year and aims to acquire a 20 percent market share over the next ten years from the two existing operators Zain and Bahrain Telecommunications Co (Batelco).
He declined to say how much the company plans to invest.
STC has committed itself to establish a $300 million venture capital fund in Bahrain that will nurture information and communications companies in the country and the region.
Three other firms had registered interest in the auction, but did not bid. Mohammed al-Amer, chairman of the Telecommunications Regulatory Authority, said on Thursday these were Bahrain's TwoConnect and Mena Telecom as well as a consortium including France Telecom's mobile arm Orange and Jordan Telecom.
Mena Telecom is an investment subsidiary of Islamic lender Kuwait Finance House.
Bahrain, on a drive to boost competition and bring down prices, launched the licence auction last year but repeatedly delayed the deadline at the request of interested companies.
The smallest Gulf Arab economy with a population of around 1.05 million people, the island state has a mobile penetration of around 120 percent, according to EFG-Hermes. (Reuters)