Ittihad Etisalathas awarded the GSM infrastructure and IT solution contracts for the kingdom’s second GSM licence in separate deals valued at more than SR 1,700 million ($453 million).

Four international companies – the US’ Motorola, Sweden’s Ericsson, France’s Alcateland China’s Huawei– have been awarded the six-month first-phase infrastructure and equipment contracts, valued at SR 1,500 million ($400 million). The work is to be done on a regional basis: Motorola will install the network in Medina, Jeddah and the northwest; Ericsson in Mecca and Riyadh; Alcatel in the Eastern Province; and Huawei in the south. The network will be completed in time for Ittihad Etisalat’s commercial launch in May next year.

‘In our first phase we will be taking in 14 cities, covering more than 90 per cent of the kingdom,’ Ittihad Etisalat managing director Khalid al-Kaf told MEED on 3 October. ‘In the first year we are looking at 1 million subscribers and 7 million by 2007.’

Huawei and Ericsson will also install a third-generation (3G) network for the new operator in preparation for a limited launch next year and a general roll-out in 2006. Ittihad Etisalat received the go-ahead by the regulator, the Communications & Information Technology Commission (CITC), to operate a separate 3G network in July (MEED 16:7:04).

The IT infrastructure contract, worth in excess of SR 200 million ($53.3 million), has been won by a three-strong consortium led by Saudi Business Machines (SBM)– the local operating subsidiary of the US’ IBM– and comprising Portaland SiebelSystems, both of the US. Under the terms of the 18-month agreement, SBM will deploy IBM enterprise technology infrastructure to underpin the new network. Portal will work on the billing system, while Siebel will set up a customer care solution. The deal will offer customer relationship management (CRM) and enterprise resource planning (ERP) solutions to an initial user base of 3 million subscribers, which can be upgraded to deal with more than 7 million subscribers by 2007.

Ittihad Etisalat gained final approval for the kingdom’s second GSM licence in early August after beating off competition from seven other bidders. Its majority shareholder is Emirates Telecommunications Corporation (Etisalat – see Banking & Finance; MEED 13:8:04).