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Saudi last chance saloon for telcos

The auction for Saudi Arabia’s third mobile licence is the “last chance” for operators looking to invest in the Gulf, according to telecom advisory firm Analysys.

The auction for Saudi Arabia’s third mobile licence is the “last chance” for operators looking to invest in the Gulf, according to telecom advisory firm Analysys.

Nine companies are currently competing for the kingdom’s third mobile licence and Analysys research analyst Daniel Jones said Saudi Arabia was the last remaining wealthy Gulf state where there was still room for growth in the telecom sector.

“Many smaller wealthy Gulf nations, such as Bahrain, Qatar, Kuwait and the UAE, are already reaching saturation. Countries where penetration is still low tend to have lower average incomes, such as in Yemen or Syria, so this could be the last chance for an operator to reach a Gulf market with a relatively wealthy population where saturation has not yet been achieved,” Jones said.

Of the nine bidders announced by the regulator, MTC is expected to be a serious contender, Jones claimed.

MTC has renounced its global ambitions to focus on expansion in the region and has arranged a US$4 billion credit facility to assist those plans, he said.

MTN will be another keen player, according to Jones. The South African telco group purchased Investcom, which holds licences across the Middle East and Africa (MEA), in June last year.

Meanwhile, Saudi mobile operator Mobily is allegedly looking to borrow US$2.8 billion to expand in the kingdom prior to the arrival of the third telco.

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