Saudi Arabia's top advisory body has proposed a bill allowing private investment for the first time in the state-run telecommunication sector, Saudi newspapers reported on Tuesday, May 15.
The bill, which needs government approval before becoming law, does not rule out foreign investment in a sector, which was placed off limits earlier this year. It also recommends setting up a telecoms regulator to monitor prices and services.
The Shoura, or Consultative, Council has no legislative power but its move comes in line with Saudi Arabia's drive to grant foreign investors a larger stake in its economy, one of the largest in the Arab world.
"The bill aims firstly to break the monopoly over the telecom service," the newspapers quoted Shoura Council member Abdul Aziz Al-Suwayegh as saying. "It aims at paving the way for the development of quality telecommunications services at cheaper costs with the free play of market forces," he added.
The Saudi Telecommunication Company (STC), which has a capital of $12 billion, is currently the sole provider of landlines, mobile telephone services and the Internet. Three years ago, the government established the firm to replace the state's telecommunications authority as a first step towards privatizing the sector.
Bankers have said that the STC must choose a strategic partner before it goes private but the firm last year scrapped a partnership deal with US-based SBC Communications Inc, which would have given the US firm a 20 to 40 percent stake.
Analysts say that Saudi Arabia's telecoms sector has huge investment potential. The oil-rich kingdom, which has a population of about 21 million, currently has around three million landlines and almost two million mobile users. Saudi also has less than 200,000 Internet subscribers and about 600,000 users.
The newspapers said that four major mobile telephone firms ― Ericsson, Nokia, Motorola and Lucent Technologies ― are reported to be bidding to expand the Saudi GSM network by one million lines. ― (Reuters, Dubai)
© Reuters 2001
© 2001 Mena Report (www.menareport.com)
