Saudi Integrated Telecoms Company (SITC) raised SR856m ($228m) through its initial public offering (IPO), which closed on 8 May. There were in total 231,067 applications and over a million subscribers. Close to 86 million shares at SR10 were subscribed for, amounting to a coverage of 286 per cent.
The majority were retail investors, but the General Organisation for Social Insurance (GOSI) subscribed for five million shares worth SR50m.
On 2 May, SITC put up 35 per cent of its shares to the public.
It was the first IPO in the country within the past seven months and generated a great deal of interest. On the sixth day, the coverage percentage had reached 175 per cent, raising SR524m.
The money will be used to pay for licences and frequencies. SITC has a licence from industry regulator, the Communication & Information Technology Commission (CITC), to offer local, national and international data communications services.
There are new technologies and new services that are introduced every year and there is room for other companies to enter
Hassan Azzee, SITC
“The Saudi market is the biggest in the Middle East and it is getting bigger. There are new technologies and new services that are introduced every year and there is room for other companies to enter,” says Hassan Azzee, official representative and secretary of SITC’s board of directors.
The company will launch its services within six months of listing, which is due to take place within the next five to six weeks.
While SITC has a greenfield licence, it is keen to share network already in place in Saudi Arabia.
“We do not want to disregard what has been achieved so far, there are companies that have put together very important infrastructure in telecoms and we certainly plan to utilise this infrastructure,” says Azzee.
SITC will also invest in its own infrastructure over the next seven years.
The company will roll out its services in the biggest cities initially and will then target the smaller cities in the country. It will offer fixed-line broadband services and high-speed mobile broadband long-term evolution. It will offer its services to both the consumer and enterprise markets.
“It will be difficult for a new player, but network sharing is a way around the challenge,” says Irfan Ellam, vice-president of equity research at UAE-based Al Mal Capital.
Al-Bilad Investment Company acted as financial adviser, lead manager and lead underwriter for the IPO. About 95 per cent of the subscriptions requests were received through the bank’s e-services and 5 per cent were received through the bank’s branches.
SITC was established in 2005 with an initial investment of $80m by a consortium of local investors headed by Al-Mawarid Company. PCCW, an operator from Honk Kong, owns 15 per cent of the company.