Saudi’s licence reform: A win-win game
The KSA telecom regulator’s new move to extend licences of Zain Saudi Arabia and other companies will be a win-win deal for certain.
The regulator, the Communications and Information Technology Commission, on Sunday (October 2) decided to extend the licence of Zain Saudi Arabia for 15 years and also allow three other telecommunications firms to extend their licences.
The kingdom’s government in return will receive five per cent of each company’s annual net income during the extension period.
The regulator has also decided to provide the unit of Kuwait’s Zain with “unified licences”, allowing them to offer all telecommunications services such as mobile phone, land line and Internet services.
Etihad Etisalat Co. and Etihad Atheeb Telecommunications Co. also have been extended with the same offer. Saudi Telecom already has a unified license.
The government did not give details of the new licences.
Zain Saudi Arabia said on Monday that the government’s decision to extend its licence by 15 years would reduce its annual amortisation charge by SAR433 million starting from the date of the extension.
Atheeb Telecommunication Co said the move would reduce the company’s annual costs by SAR9.7m.
Saudi Telecom Co said the decision to grant telecommunications operators with “unified licences” would provide positive opportunities for the company across its business. However, the company said it was too early to determine the financial impact.
Following the licence reforms, the Capital Market Authority, the kingdom’s stock market regulator, suspended trade in the shares of the listed telecommunications operators on Sunday.