Telco shares in Saudi bear the brunt of new restrictions
Expats not allowed to have more than two SIM cards
It seems the wait might have just got longer for Saudi Arabia to recover from its economic slowdown. The regulator has imposed new restrictions on SIM ownership in the kingdom, as reported by Bloomberg, immediately affecting the shares of most telcos.
Shares in Mobily, and Zain Saudi fell 0.5-0.7%, while STC trimmed gains. Expats are now limited to two prepaid SIM cards across all operators, while Saudis might have the permission to own up to ten SIM cards, sources say.
"This is considered a temporary procedure to correct and remedy the large number of illegal SIM cards in the market," the Communications and Information Technology Commission, Saudi Arabia's telecommunications regulator, said in a statement to Bloomberg. "That has resulted in the abuse of those SIM cards to carry out terrorist operations and acts harmful to national security."
Last year, the regulator had issued a mandate making it compulsory to register fingerprint with each SIM card owned. That was already affecting sales of SIM cards, which might be hit harder with the new restriction on ownership.
In the beginning of this year, the International Monetary Fund had estimated that the growth in Saudi Arabia is expected to be weaker than previously forecast for 2017 as oil production is cut back in line with the recent OPEC agreement, while civil strife continues to take a heavy toll on a number of other countries. Predicted GDP growth rate for 2017 is 0.4 compared to 1.4 in 2016.