The contract calls for the kingdom-wide expansion to be completed by the end of the year. However, industry sources say completion is likely to be pushed back to the first quarter of 2005 as the award of the contract – originally due in late June – has been delayed by several weeks.

The project is part of Saudi Telecom’s drive to serve a rapidly expanding GSM subscriber base, which now stands at about 8 million, and in anticipation of competition next year. The UAE’s Emirates Telecommunications Corporation (Etisalat) is the frontrunner for the second GSM licence, which is due to be awarded by the local regulator, the Communications & Information Technology Commission (CITC), in the fourth quarter (see Special Report, page 33; MEED 16:7:04).

Saudi Telecom announced in mid-July net profits of SR 5,140 million ($1,370 million) for the first half of the year, while operating revenues reached SR 14,880 million ($3,900 million).