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Failure of SITC will hinder competition: IDC

Saudi telco's closure raises questions about fixed-line competition

IDC's Bhanu Chaddha said that more competition is required in KSA's fixed-line services sector.
IDC's Bhanu Chaddha said that more competition is required in KSA's fixed-line services sector.

Following the closure of failed Saudi Arabian operator SITC, telecoms analysts have raised concerns about the lack of competition in the country’s fixed-line sector.

Bhanu Chaddha, senior research analyst, telecommunications, Middle East, Africa & Turkey, pointed out some of SITC’s original plans for Saudi Arabia to demonstrate what the market will now miss out on.

“SITC, which had enjoyed strong backing of PCCW and support from local conglomerate Mawarid Group, had interesting plans around using LTE services for both retail and wholesale functions,” he said.

“It also intended to develop fixed infrastructure to serve customers in 45 cities all over the 13 provinces of the kingdom within seven years of operation. To this end, SITC partnered with ITC, which is also partially owned by Mawarid Group, to use ITC's existing infrastructure,” Chaddha added.

IDC added that the fixed-line services market in Saudi Arabia remained in need of greater competition as telecoms regulator CITC's efforts to liberalise the sector by awarding three fixed-service licenses in 2007 “haven't resulted in desired structural changes in the markets”.

“STC still enjoys virtual monopoly and one of the three licensees that launched operations, Etihad Atheeb (GO Telecom), has been struggling to gain significant market traction,” Chaddha said.