Rival operators and security delay mobile newcomers' entry to Saudi
Virgin Mobile Middle East and Africa and Jawraa Lebara aim to launch by the end of 2014
The launch of two new mobile companies has been delayed in Saudi Arabia until later this year due to state security requirements and a lack of cooperation from Saudi Arabia's existing telecom operators, according to Reuters.
Virgin Mobile Middle East and Africa (VMMEA), which is part-owned by British entrepreneur Richard Branson's Virgin Group, teamed up with former monopoly Saudi Telecom Co (STC), while Jawraa Lebara partnered with the number two operator Mobily in June 2013 when the national telecom regulator instructed the kingdom's three mobile operators to each host a mobile virtual network operator (MVNO) in a bid to increase competition.
VMMEA in March said it hoped to launch services in the first half of 2014, while Mobily initially said its Jawraa's launch target was the end of March, yet both have yet to do so.
"Most of the challenges are interconnections with other operators," Yasser Alobaidan, chief executive of Jawraa, told a conference in Dubai this week.
Saudi has 1.8 mobile subscriptions per person, which according to Reuters means the new firms will need to coax customers from existing operators and that threat could explain their apparent reluctance to cooperate.
Online media has reported that the MVNOs have also faced difficulties meeting the demands of Saudi's security apparatus to allow for so-called lawful intercept, which allows for electronic surveillance of an individual, Alobaidan and Mikkel Vinter, VMMEA chief executive, told the conference.
"That's the same for every operator," said Vinter. "All these factors have to come together, the regulator has to give the final stamp of approval and then we can launch," said Vinter. "We're now very close. I'd be very disappointed if it's not this year."
Jawraa also aims to launch by year-end, said Alobaidan.