CITC to start licence bidding process

07 July 2006

Telecoms regulator the Communications & Information Technology Commission (CITC), has issued two public notices inviting interested parties to comment on the bidding process for the new mobile and fixed-line licence issue. The public notice coincides with the release of public consultation documents which detail the prequalification and bidding criteria as well as the bidding schedule for the issue.

Interested companies and groups have until 15 July to submit their views on the public consultation document relating to the fixed-line licences, and until 22 July for the mobile licence issue. The CITC says the full request for application (RFA) documents will be available for purchase in late July once the public consultation round is completed and all feedback and comments reviewed.

Under the proposed timetable for issuing the kingdom's third mobile licence, released in the public consultation documents, telcos will have until 26 August to submit questions on the RFA, and until 28 October to submit their applications. The prequalification process will last three weeks until 18 November, when prequalifiers will be announced.

The multiple-round auction stage will start on 2 December, followed two weeks later by a single-round auction process. The winner will be announced on 16 December.

Firms or consortiums wishing to bid must contain at least one telco, serving at least 1.5 million mobile subscribers, and with annual revenues exceeding $500 million. The telco must commit to taking at least 15 per cent in the new licensee and to establishing a local joint stock company. The total shareholding to be floated locally will be between 20 and 40 per cent, although the final amount has yet to be determined. Bidders are prohibited from having any active participation in mobile activity in the kingdom.

CITC states that there are no predetermined number of fixed-line licences it plans to issue. The precise number will be determined by the number of applicants within each frequency band. The licences will not have to cover the whole country, but should achieve coverage of 10 per cent of population for each of at least three contiguous districts within five years of commercial launch.

Companies wishing to apply for spectrum (full frequency bandwidth) will need to submit their applications by 30 September. Others can apply at any time after the RFA is released on 5 August. The Council of Ministers is expected to approve successful applications two-three months after their submission.

The kingdom has two mobile operators, former monopoly operator Saudi Telecom Company (STC) and Mobily, in which the UAE's Emirates Telecommunications Corporation (Etisalat) is the main shareholder. STC is the only company to provide fixed-line services.

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