SCC gets down to business

08 February 2002

The recently established Saudi Communications Commission (SCC), the kingdom's telecommunications regulator, was due to hold its first board meeting in early February. Three private sector members of the board were appointed in late January, joining government members who had already been appointed. SCC can now move ahead with the process of setting itself up for business.

The three private sector board members are: Mohammed Ihsan Abu Hulaiqa, a member of the Majlis al-Shura (consultative council); Mohammed Ahmed Abdulatif, former chairman of Saudi Consolidated Electricity Company in the Central Region, and a member of the consultative council; and Abdulaziz Abdulrahman al-Quwais, chairman of Gulf Chemical Industries, a subsidiary of Saudi Basic Industries Corporation (Sabic). The board also contains representatives from the Finance & National Economy Ministry, the Commerce Ministry and the King Abdulaziz City for Science & Technology.

Chaired by acting Posts, Telephones & Telegraphs Minister Khaled al-Gosaibi and SCC governor Mohammed Mulla, the board will have the authority to approve SCC's finances and internal procedures as it sets up. Sources close to the body say it will be about three months before it has employed its full complement of staff and moved to a new building outside the Saudi Telecommunications Company (STC)compound.

The first tasks of the body will be to undertake a complete evaluation of the sector and to draw up detailed by-laws governing deregulation. This process is expected to take a further three months. When it is completed, the commission can begin launching a new GSM licence.

Negotiations with potential competitors for the licence are expected to begin at the end of the third quarter and to last about three months. A recommendation will then be made by SCC to the council of ministers for approval. A new licence is unlikely to be issued before February 2003. For technical reasons, it is unlikely that a third GSM licence will be launched anytime soon, industry sources say.

Competition for the new licence is set to be stiff because the kingdom has a relatively low GSM penetration rate of about 13 per cent and high demand. Between 120,000-140,000 GSM lines are sold by STC each month.

The new regulator is to rely heavily on STC infrastructure because most calls will pass through the company's existing fixed-line network. One of SCC's most important tasks will be regulating the interconnection rate that STC charges its competitor.

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