15
© CIT Publications Limited Telecommunications Markets in the Middle East Saudi Arabia Saudi Arabia Country profile Key data Key data Area (sq km): 2,150,000 Population (million): 21.5 Population per sq km: 10 Capital: Riyadh Population of capital: 1.3 million Language: Arabic Exchange rate: - spot rate (10/02/00) SAR=USD1 3.75 - annual average (1999) SAR=USD1 3.75 GDP 2000 (USD billion - forecast): 140.9 GDP per capita 2000 (USD thousand): 6.56 Sources: FT, CIA Factbook, EIU n RIYADH l Jeddah l Mecca l Dammam 500km Political and economic profile Political and economic profile The Kingdom of Saudi Arabia occupies approximately four-fifths of the Arabian peninsula and borders Iraq, Jordan, Kuwait, Oman, Qatar, Yemen and the United Arab Emirates. It is an arid country with vast expanses of largely uninhabited desert and is subject to extreme changes in temperature. Due to the predominance of the oil and gas industries, around a quarter of Saudi Arabia’s population is made up of foreign nationals. The country is divided into 13 administrative provinces called mintaqat. A large section of the border with Yemen remains undefined. There are no political parties or elections in Saudi Arabia, as the country is governed by a hereditary monarch, who since June 1982 has been King Fahd bin Abd al-Aziz Al Saud. The King appoints a Council of Ministers - mainly from the royal family - to carry out governmental duties. Saudi Arabia controls over a quarter of the world’s oil reserves and its economy relies heavily on the price of oil; approximately 75% of budget revenues, 40% of GDP and 90% of export earnings come from the petroleum industry. During a slump in world oil prices in 1998 the country’s GDP fell by around 11% and the government was forced to cut spending the following year. The authorities have attempted to diversify the economy in recent years in order to reduce the country’s dependence on fossil fuel exports, but with little success; agriculture, for example, contributes only 6% of GDP and a shortage of water for irrigation limits the possibility of self- sufficiency. Thanks to a Saudi-led drive to reduce production, oil prices rose in 1999 and the GDP registered a positive growth of around 2%. By early 2000 prices had reached their highest levels for nine years, leading to calls for production to be stepped up once again. Unemployment is virtually non-existent, with around 25% of the workforce employed in the oil and gas industries. The major part of Saudi exports head eastwards to countries such as Japan and Korea, while the largest sources of imports are the US and the UK. Saudi Arabia is one of 14 Arab nations to have signed up to take part in the Arab Free Trade Zone which is due to be introduced by 2007. The exchange rate of the Saudi Riyal has been pegged to the US dollar since 1986. boundary undefined

Saudi Arabia

Embed Size (px)

Citation preview

Page 1: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi Arabia

Saudi Arabia

Country profile

Key dataKey data

Area (sq km): 2,150,000Population (million): 21.5Population per sq km: 10

Capital: RiyadhPopulation of capital: 1.3 millionLanguage: Arabic

Exchange rate:- spot rate (10/02/00) SAR=USD1 3.75- annual average (1999) SAR=USD1 3.75

GDP 2000 (USD billion - forecast): 140.9GDP per capita 2000 (USD thousand): 6.56

Sources: FT, CIA Factbook, EIU

n RIYADH

lJeddahlMecca

l Dammam

500km

Political and economic profilePolitical and economic profile

The Kingdom of Saudi Arabia occupies approximatelyfour-fifths of the Arabian peninsula and borders Iraq,Jordan, Kuwait, Oman, Qatar, Yemen and the UnitedArab Emirates. It is an arid country with vast expansesof largely uninhabited desert and is subject to extremechanges in temperature. Due to the predominance of theoil and gas industries, around a quarter of Saudi Arabia’spopulation is made up of foreign nationals. The countryis divided into 13 administrative provinces calledmintaqat. A large section of the border with Yemenremains undefined.

There are no political parties or elections in Saudi Arabia,as the country is governed by a hereditary monarch, whosince June 1982 has been King Fahd bin Abd al-Aziz AlSaud. The King appoints a Council of Ministers - mainlyfrom the royal family - to carry out governmental duties.

Saudi Arabia controls over a quarter of the world’s oilreserves and its economy relies heavily on the price ofoil; approximately 75% of budget revenues, 40% of GDPand 90% of export earnings come from the petroleumindustry. During a slump in world oil prices in 1998 thecountry’s GDP fell by around 11% and the governmentwas forced to cut spending the following year. Theauthorities have attempted to diversify the economy inrecent years in order to reduce the country’s dependenceon fossil fuel exports, but with little success; agriculture,for example, contributes only 6% of GDP and a shortage

of water for irrigation limits the possibility of self-sufficiency. Thanks to a Saudi-led drive to reduceproduction, oil prices rose in 1999 and the GDPregistered a positive growth of around 2%. By early 2000prices had reached their highest levels for nine years,leading to calls for production to be stepped up onceagain.

Unemployment is virtually non-existent, with around25% of the workforce employed in the oil and gasindustries. The major part of Saudi exports headeastwards to countries such as Japan and Korea, whilethe largest sources of imports are the US and the UK.Saudi Arabia is one of 14 Arab nations to have signed upto take part in the Arab Free Trade Zone which is due tobe introduced by 2007. The exchange rate of the SaudiRiyal has been pegged to the US dollar since 1986.

boundary undefined

Page 2: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaBasic telephony

RegulationsRegulations

The Kingdom of Saudi Arabia’s basic telephony marketis overseen by the former telephone operator the Ministryof Post, Telegraph and Telephone (MoPTT), which wasspun off from the Ministry of Transport in 1976.

In May 1998 the Saudi government announced that theMoPTT had handed over its telephone networks to thenewly formed Saudi Telecom Company (STC), whichwas set up with an initial capital of USD2.67 billion. Thegovernment intends eventually to privatise up to 80% ofthe new company, although no firm plans for this hadbeen announced by February 2000. As part of thisprivatisation process the government proposes to createan independent telecoms commission which will assumethe regulatory and licensing responsibilities of theMoPTT, leaving the ministry to produce legislation.

Basic telephony market overviewBasic telephony market overview

The state-owned Saudi Telecom Company (STC) has amonopoly of Saudi Arabia’s facilities-based voicetelephony market. At the end of September 1999 itsinfrastructure connected 2.55 million residential andbusiness subscribers, up from 2.35 million nine monthsearlier. In March 1999 STC announced plans to increaseits fixed line teledensity from 12 lines per 100 inhabitantsto around 25 to 30 lines by installing a further fourmillion lines by 2005. Away from the major cities, muchof STC’s infrastructure is based on microwavetechnology.

In November 1998 STC invited bids for its eighthtelephone expansion project (TEP8), a USD6 billion planto install an additional two million lines, establish newexchanges, replace parts of the existing copper networkwith fibre-optic cable and introduce microwave links toareas with no fixed infrastructure. After a series ofdelays, five companies entered bids to supply equipmentfor the project by the February 1999 deadline - Lucent,Ericsson, Siemens, Nortel and Alcatel. By February 2000STC still had not chosen the winning bidder and adecision is not expected until mid-2000; the operator is

expected to split the work between two or threesuppliers rather than give it all to a single company. Thedelay has been blamed on the weakness of oil prices,which has affected government cash flow.

In November 1999 STC announced the completion ofTEP6, 18 months ahead of schedule. The plan, whichcalled for the installation of 1.5 million digital fixed linesand capacity for 200,000 GSM mobile connections, wasnot due to be completed until mid-2001. The USD4billion contract for TEP6 was originally awarded toAT&T Network Systems (now Lucent Technologies) inMay 1994. As part of the project, 1,500 isolated villageswere connected to STC’s network. In a separate dealworth around USD111 million, Lucent was contracted inmid-1998 to upgrade the PTO’s switch systems,covering approximately 900,000 lines. Towards the endof 1999 STC awarded a USD12 million contract to SRTelecom of Canada for the installation of TDMA wirelessin the local loop (WiLL) equipment in central andsouthwestern areas of the kingdom.

As well as residential telephony, STC offers leased linesand data services and provides international voice anddata communications thanks to its membership of theArabsat, Intelsat and Inmarsat international satelliteorganisations (see Other markets section). At March1999 STC had around 6,000 data lines in service.

Through the MoPTT, the Saudi government has stakesin several international cable systems. It was one of themajor investors in the SEA-ME-WE 2 undersea cablewhich links Europe, the Middle East and South East Asia,contributing approximately 15% of the total cost of theproject. In addition, in September 1999 STC signed anagreement to purchase capacity on the Fibre-optic LinkAround the Globe (FLAG) system, a 28,000km cablewhich stretches from the UK to Japan. FLAG’s landingstation at Jeddah entered operation in July 1999. SaudiArabia is connected to the neighbouring island of Bahrainvia a 70km fibre-optic cable which runs alongside theKing Fahd causeway, while a point-to-point microwavelink offers a terrestrial connection to Sudan.

Facilities-based licenseesFacilities-based licensees

Operator and ownership Date first Operating licence Local telephonelicensed subscribers

STC (state 100%) 1998 Local, long-distance, international 2.55 million

Total number of telephone subscribers (Sept 1999): 2,551,372Teledensity (Sept 1999): 12%

Source: operator

Page 3: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaBasic telephony

In June 1999 STC awarded a contract for the installationof 100,000 smart-card payphone to the local companySilkilasilki Telecommunications, formed in 1999 from themerger of some of Prince Al-Waleed bin Talal’s telecomsoperations with Abdulaziz Al-Hagabani’s National Groupfor Communications. Silkilasilki Telecommunications willreceive 16% of all revenues from the payphones forseven years after their installation, at which time STCwill regain full ownership.

On 1 July 1999 the government took tentative stepstowards competition in the basic telephony market whenit awarded four licences to Saudi companies for theprovision of public telephony services using pre-paidcards. One of the companies, National AdvancedSystems Company (Nasco), plans to introduce cardscosting between SAR25 and SAR200.

500 1000 1500 2000 2500 3000

1995

1996

1997

1998

Sept 1999

1,700

1,900

2,100

2,348

2,551

PSTN (000)

Growth of main lines

Source: STCTotal number of subscribers

Page 4: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaMobile communications

RegulationsRegulations

The Saudi market for cellular telephony is regulated bythe Ministry of Post, Telegraph and Telephone(MoPTT). There are two licensed operators: state-ownedSaudi Telecom Company (STC) which operates anationwide service, and the private ElectronicApplications Establishment (EAE) which offers coverageonly in Riyadh. It is thought that the government willencourage competition in the cellular sector by awardinga new national GSM licence before 2002.

Mobile market overviewMobile market overview

The Kingdom of Saudi Arabia has one of the MiddleEast’s largest mobile markets in terms of subscribernumbers, although the high cost of subscriptionsrestricts their accessibility. By the end of 1998 thecountry had approximately 530,000 mobile users and apenetration rate of 2.9%, rising to 3.6% nine monthslater by the addition of a further 260,000 subscribers.The country’s largest operator, STC, estimated in late1998 that it would have signed one million mobilesubscribers by 2005, but it seems that it will reach thistarget sooner rather than later.

The first commercial cellular service was introduced in1977, although this was limited to just 1,200 users inRiyadh, Jeddah and Taif. In August 1981 the MoPTTlaunched an analogue network covering the main citiesand highways using NMT-450 technology with a

capacity for around 16,000 subscribers. By September1999 the popularity of digital services had seensubscriptions to this network fall to virtually zero.

Digital mobile services were first introduced to SaudiArabia in January 1995 and by the end of 1998accounted for around 97% of all subscribers. By far thecountry’s largest digital operator is STC. Its GSM-900network was launched in January 1996 and by the end ofSeptember 1999 had 789,836 subscribers, up fromaround 514,000 nine months earlier. By early 2000 STChad signed roaming agreements with operators inBahrain, Kuwait, Qatar, the UAE and the UK.

In September 1999 STC announced that it was invitingbids from seven international equipment suppliers for theexpansion of its GSM infrastructure. The companies -Lucent, Motorola, Alcatel, Siemens, Ericsson, Nokia andNortel - were asked to quote for the installation ofinfrastructure to handle an additional one million mobilesubscribers. Although the bidding closed at the end ofOctober, by February 2000 a result had still to beannounced. An earlier USD699 million expansioncontract to provide capacity for 575,000 GSMconnections over 15 months was won by Lucent in July1998; the same company installed the original 500,000-capacity network as part of Saudi Arabia’s sixthtelephone expansion project (TEP6) in 1994.

STC’s only rival for GSM subscribers is EAE Al-Jawwal, which launched the country’s first digital

Main operatorsMain operators

MobileMobile

Operators Network Launch Coverage Subscribersdate (000s)

end 1998 Sept 1999

STC (state 100%) NMT-450 1981 major cities 16 0GSM-900 1996 major cities 514 790

EAE Al-Jawwal (EAE 100%) GSM-900 1995 Riyadh na na

Total number of mobile subscribers (September 1999): 789,836*

*STC only

PagingPaging

STC (state 100%) POCSAG/ERMES 1990 14 cities 700 na

Total number of paging subscribers (end 1998): 700,000Source: operators

Page 5: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaMobile communications

cellular service in Riyadh in January 1995. Despite itshead start, EAE has failed to provide any seriouscompetition to STC. The operator is wholly owned bythe Electronic Applications Establishment, a Riyadh-based company founded in 1988. By the end of June1999 EAE had signed roaming agreements with 26international partners in the Middle East, Asia andEurope, although only six of these were operational.

In the realm of mobile business communications, inAugust 1999 the GEC-owned equipment supplierMarconi was chosen by the Saudi Arabian Oil Company(Aramco) to design and install an 800Mhz digital mobileradio network using the TETRA standard. The contractcovered the installation of base stations, switches andnetwork management infrastructure.

STC is an authorised distributor of the Iridium globalmobile service which was launched worldwide inNovember 1998 and is also a partner in the ICO Globalconsortium. Iridium’s Middle East subsidiary was set upby the Saudi companies Binladin and Mawarid Overseasin 1997. In addition, through its stake in Arabsat (seecompany profiles section), STC holds a share in ThurayaSatellite Telecommunications Company, which is due tolaunch its own satellite mobile service in 2000. Thuraya’sservices will be distributed in the Kingdom by theRiyadh-based National Group for Communications andComputers (NGC).

In September 1997 the global mobile satellite operatorGlobalstar announced that following its launch, originallyscheduled for late 1998, its services in Saudi Arabia

would be provided by Riyadh-based Trans Arab TelecomCompany (TATCOM), a subsidiary of Dallah Telecomand the Saudi Trading and Construction Co. However,due to operational problems Globalstar was forced todelay its launch. When services become available in theMiddle East in the first half of 2000 they will be offeredunder the name Saudi Globalstar. In July 1999 thecompany awarded a USD4.2 million contract to Logicaof the UK to supply customer care and billing systems,as well as a pre-paid card platform. Meanwhile Saudicompany Al-Murjan was chosen in mid-1998 todistribute Globalstar services in Kuwait, the UAE, Qatar,Oman, Yemen, Jordan, Syria and Bahrain.

STC has the honour of operating the world’s largestpaging network based on the ERMES standard, withapproximately 512,000 subscribers by the end of 1998and an estimated 600,000 by December 1999. Thenetwork, which was originally installed by Tecnomen ofFinland in 1994, covers 14 Saudi cities. In November1999 STC awarded Tecnomen a USD2 million contractto expand and upgrade the network. The PTO alsooperates a POCSAG-based service which was built byEricsson in 1990 and had attracted 188,000 customersby December 1998.

In October 1999 STC signed a deal with Motorola forthe provision of a further 250,000 pager connectionsusing the FLEX protocol, increasing STC’s total pagingcapacity to more than one million subscribers. Existingcustomers will be able to migrate their subscription fromthe ERMES network to the new FLEX network.

1996 1997 1998 Sept 1999

0

100

200

300

400

500

600

700

800

180

420

530

790

cellular (000)

Total number of subscribersSource: STC

Growth of mobile services

Page 6: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaOther markets

RegulationsRegulations

The Saudi cable and satellite broadcasting sectors and themarket for satellite communications services areregulated by the Ministry of Post, Telegraph andTelephone (MoPTT).

Licences to operate as an Internet Service Provider (ISP)are awarded by the King Abdulaziz City for Science andTechnology (KACST), a Riyadh-based educationalestablishment which is a licensed ISP in its own right.Due to the country’s strict Muslim laws, subscribers areable to visit only a limited number of approved websites,all of which have had their content sanctioned byKACST.

Cable market overviewCable market overview

Due to religious concerns over the content of some DTHsatellite television services, the Saudi government hasencouraged the development of cable TV in theKingdom. The major Saudi cable operator is SARAVision, a subsidiary of the Riyadh-based media groupARA Group International. It was due to launch a 20-channel service in Riyadh, Jeddah and Dharan inSeptember 1996 with a coverage of approximately300,000 homes. However, it was not until late 1998 thatthe service actually got off the ground, with USequipment supplier General Instrument rolling out theinfrastructure. SARA Vision’s service is delivered usingmicrowave multipoint distribution service (MMDS)technology, which reduces the cost of rolling out anetwork by using wireless signals to connect subscriberpremises.

Satellite market overviewSatellite market overview

The Saudi government is the majority owner of theMiddle East’s international satellite organisation Arabsat,which offers a range of voice, data and videocommunications as well as TV and radio broadcastingservices. The footprints of its three satellites extendbeyond the Middle East to cover Europe, North and EastAfrica and Western Asia. Arabsat is a 10% shareholder inthe UAE-based global mobile satellite system Thurayawhich is due to launch during 2000. (For moreinformation on Arabsat please turn to the companyprofile.)

Through STC the government is also a shareholder in theinternational satellite ventures Intelsat (0.89%) andInmarsat. STC utilises capacity on these platforms toprovide voice and data communications services to Saudibusinesses.

Despite the government’s attempts to limit the influenceof Western media by introducing a ban on satellite TVdishes, an estimated 200,000 Saudi homes weresubscribing to one of the region’s DTH broadcasters bythe end of 1999. One of the largest of these companies isSaudi-based Arab Radio and Television (ART), a multi-channel service which was launched in October 1993using the Arabsat-1 platform. It has since transferred itsbroadcasts to the Arabsat 2A second-generation platformlaunched in September 1996. ART’s major investorsinclude Saudi prince Al-Waleed bin Talal and SheikhSaleh Kamel. The broadcaster offers a ten-channel basicservice and an 18-channel premium package, both ofwhich include ART’s five in-house channels: Variety,Movies, Children, Sport and Music. ART is available toArab viewers worldwide via platforms in Europe, Africa,Asia, the US and Latin America.

Several of ARTs competitors have in the past signedagreements with Western broadcasters in order to boosttheir programme content. However, one such deal -between Saudi company Orbit Communications and theBBC - broke down due to Orbit’s attempts to censorBBC programming. Broadcasting from Italy to homes inthe Middle East and North Africa, Orbit’s digital DTHservice served approximately 170,000 subscribers bymid-1998. Its offerings include a package of sevenchannels from Star Select, a subsidiary of RupertMurdoch’s News Corporation. Orbit is owned by theRiyadh-based Mawarid Group. Middle East BroadcastingCentre (MBC), which like SARA Vision is owned byARA Group International, signed a programming dealsimilar to that of Orbit and the BBC with the UScompany Voice of America. Both ARA and MBC areowned by Sheikh Walid Ali Ibrahim, a brother-in-law ofSaudi Arabia’s King Fahd.

Another pan-regional DTH platform is Showtime, aDubai-based operator which offers 14 TV and ten audiochannels to approximately 200,000 homes across theMiddle East and North Africa. The broadcaster launchedin 1996 and is owned by South Africa’s MultichoiceMiddle East and Gulf DTH, a joint venture betweenKuwait Investment Project Company and Viacom of theUS.

Multimedia market overviewMultimedia market overview

Internet services were launched in Saudi Arabia inJanuary 1999; before that date Saudis wishing to connectto the Internet were forced to subscribe to ISPs in theUS or other Middle Eastern countries and payinternational telephone rates. At the end of 1998 around2,500 Saudis were subscribing to the Internet accessservice of Batelco, the national PTO in neighbouring

Page 7: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaOther markets

Bahrain. The Saudi government has placed responsibilityfor the development of the Internet in Saudi Arabia in thehands of KACST.

Of the 150 or so companies which showed an interest inacquiring an Internet licence, 42 were approved byKACST in December 1998. Several had alreadywithdrawn their applications when KACST revealed thatthe maximum hourly rate which ISPs could chargewould be SAR4.50; companies which dropped out of therunning complained that the high start-up costs involvedwould make a commercial service unviable.Nevertheless, on 1 January 1999 Saudi customers wereable to subscribe to the first of the country’s domesticInternet services. All 42 companies were given sixmonths in which to launch a commercial service; by thatdate 26 operators had done so and a further five had hadthe deadline extended. The remaining eleven companieshad their licences revoked for failing to make sufficientprogress towards a launch. The 2,200 Internet portsassigned to these operators were redistributed among theoperational ISPs. Even after the eleven disqualifications,it is expected that high start-up costs and the limited sizeof the market will force some of the smaller operators toconsolidate their assets.

By the end of 1999 the Kingdom had approximately150,000 Internet subscribers. The country’s largest ISPis KACST. Other operators include PrimeNet, SaharaNetwork and the Saudi Al-Jeraisy Group. PrimeNet is adivision of the private Saudi company Silkilasilki Co andoffers Internet access through dial-up or leased lines, E-mail accounts, domain registration and web hosting. Itsresidential charges range from SAR150 a month toSAR275. Sahara Network launched a similar portfolio ofservices in February 1999 and claimed to have more than4,000 subscribers by the end of the year. The Saudi Al-Jeraisy Group has formed a joint venture with BahrainPTO Batelco to provide Internet services in the Kingdom.

In July 1999 STC awarded a contract to Lucentsubsidiary Ascend International for the second phase ofthe expansion of the country’s Internet service. Ascendwas charged with the installation of 5,000 Internet ports,doubling the country’s existing capacity by the end ofSeptember. At that date Internet access was available tothe majority of the population. In October 1999 SaudiArabian Internet users staged a day of protest at the slowdevelopment of Internet services in the country.

Page 8: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaSTC

Operational overviewOperational overview

Saudi Telecommunications Company (STC) was createdout of the Ministry of Post, Telegraph and Telephone(MoPTT) in May 1998. This was the first step towardsthe eventual privatisation of the operator and, thoughseveral foreign companies have expressed their interest inacquiring a stake in STC, by February 2000 thegovernment had still to announce any firm timetable forthe process. STC was set up with an initial capital ofUSD2.67 billion.

Meanwhile, STC retains its monopoly over SaudiArabia’s basic telephony market and is also the country’slargest cellular operator. By the end of September 1999 ithad 2.55 million fixed and 789,836 mobile subscribers,up from 2.35 million and 530,000 respectively at the startof the year.

Saudi Telecommunications Company

Saudi TelecomCompany

Saudi Arabia

Nationaltelephony

Internationaltelephony

Localtelephony

Datacommunications

Mobiletelephony

Paging

InfrastructureInfrastructure

12/1996 +/- (%) 12/1997 +/- (%) 12/1998

PSTN lines in service 1,900,000 11% 2,100,000 12% 2,348,000

Cellular subscribers 180,000 67% 300,000 77% 530,000Cellular subscribers - analogue na - na - 16,000Cellular subscribers - digital na - na - 514,000

OwnershipOwnership

STC is wholly owned by the Saudi government.

Addresses and contactsAddresses and contacts

Saudi Telecommunications Company - STCPO Box 87912Riyadh 11652Kingdom of Saudi ArabiaTel: 966 1 4529166Fax: 966 1 4702050Ali bin Talal Al-Jahani, ChairmanAbdulrahman Al-Yammi, PresidentKhalid Balkheyour, Director - International RelationsSami Mobarah, International RelationsSaad Al-Mazrou, General Manager - Commercial

Services

Page 9: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaArabsat

Arabsat

Operational overviewOperational overview

The Arab Satellite Communications Organisation(Arabsat) was established in April 1976 by the memberstates of the Arab League to provide telecommunicationand broadcasting services to nations in the Middle Eastand North Africa. In 1990 the organisation voted tocommence operations on a commercial basis rather thanpurely serving the needs of its shareholders. Arabsat ismanaged by a General Assembly, made up of thecommunication ministers from participating states.

The organisation’s first two satellites, Arabsat 1A and1B, were constructed by Aerospatiale of France andlaunched in 1985; a third platform, Arabsat 1C, wasadded seven years later. Two second-generation satellites(2A and 2B) were launched in 1996 to replace Arabsat1A and 1B, while 1C was sold to the Indian SpaceResearch Organization (ISRO) in November 1997. InFebruary 1999 Arabsat 3A was launched, with afootprint that extended beyond the Middle East and NorthAfrica to cover Western and Eastern Europe. The systemhas two control facilities, one at Dirab just outsideRiyadh, and the other near Tunis. In addition, eachmember country has at least one earth station, exceptLibya which shares one with Tunisia.

Arabsat’s portfolio of services includes voice and datacommunications, TV and radio broadcasting, VSAT andsatellite news gathering. It also leases capacity to thirdparties.

Arabsat is a 10% shareholder in the Thuraya SatelliteTelecommunications Company, a regional mobile satellitesystem based in the United Arab Emirates which is dueto launch services in 2000. In December 1998, as part ofthe privatisation process of Qatari operator Q-tel, Arabsatpurchased an unspecified number of shares in Q-tel,which is itself an Arabsat shareholder.

Arabsat

Thuraya SatelliteTelecommunications

Company 10%

Page 10: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi Arabia

Financial highlightsFinancial highlights

USD thousand 12/1996 +/- (%) 12/1997 +/- (%) 12/1998

Revenue 65,616 78% 117,109 13% 132,616Net income 32,258 69% 54,612 63% 88,783

IndicatorsIndicators

12/1996 +/- (%) 12/1997 +/- (%) 12/1998

Turnover (USDm) 66 77% 117 14% 133Profit margin 49.16% - 46.63% - 66.95%

SubsidiariesSubsidiaries

Stake Company Operations

10.00% Thuraya Satellite Telecommunications United Arab Emirates mobile satellite systems provider. Company

OwnershipOwnership

The Kingdom of Saudi Arabia 36.66%The State of Kuwait 14.59%The Arab Jamahiriya of Libya 11.28%The State of Qatar 9.81%The United Arab Emirates 4.66%The Hashemite Kingdom of Jordan 4.05%The Republic of Lebanon 3.83%The State of Bahrain 2.45%The Arab Republic of Syria 2.08%The Republic of Iraq 1.90%The Republic of Algeria 1.72%The Republic of Yemen 1.65%The Arab Republic of Egypt 1.59%The Sultanate of Oman 1.23%The Republic of Tunisia 0.74%The Kingdom of Morocco 0.61%The Republic of Sudan 0.27%The Islamic Republic of Mauritania 0.27%The State of Palestine 0.25%The Democratic Republic of Somalia 0.24%The Republic of Djibouti 0.12%

Arabsat

Addresses and contactsAddresses and contacts

ArabsatPO Box 1038Riyadh 11431Kingdom of Saudi ArabiaTel: 966 1 4820000Fax: 966 1 4887999Saad Al-Bidnah, Director GeneralSaid Al-Qahtani, Director - Finance and AdministrationMohammed Othman, Director - Technical AffairsOmar Shoter, Director - Marketing and External Affairs

Thuraya Satellite Telecommunications CompanyPO Box 33344Abu DhabiUnited Arab EmiratesTel: 971 2 333888Fax: 971 2 351880

Page 11: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaDirectory

Key addresses and contactsKey addresses and contacts

Regulatory organisationsRegulatory organisations

Ministry of Post, Telegraph and TelephoneIntercontinental RoadRiyadh 11112Kingdom of Saudi ArabiaTel: 966 1 4634444Fax: 966 1 4637100Ali bin Talal Al-Jahani, MinisterA. Faisal Zaidan, Deputy Minister - TelephoneArif bin Ali, Deputy Minister - TelegraphFouad Mohammad Nour Abu, Deputy Minister -

Operations and MaintenanceSami S. Al-Basheer, Director General

Communications services providersCommunications services providers

Arab Radio and Television - ARTPO Box 430Jeddah 21436Kingdom of Saudi ArabiaTel: 966 2 6171235Fax: 966 2 6170938Dr Fares Lubbaddeh, Director of Planning

Arab Satellite Communications Organisation -ArabsatPO Box 1038Riyadh 11431Kingdom of Saudi ArabiaTel: 966 1 4820000Fax: 966 1 4887999Saad Al-Bidnah, Director GeneralSaid Al-Qahtani, Director - Finance and AdministrationMohammed Othman, Director - Technical AffairsOmar Shoter, Director - Marketing and External Affairs

AT&T Communications ServicesPO Box 23545Riyadh 11436Kingdom of Saudi ArabiaTel: 966 1 4936464Fax: 966 1 4970046Bob Snow, Managing Director

Batelco Jeraisy Internet Services LimitedPO Box 317Riyadh 11411Kingdom of Saudi ArabiaTel: 973 9646488Fax: 966 1 4192031Tariq Al-Hamad, Managing DirectorRashid Al-Snan, Senior Manager

British Telecom Al SaudiaPO Box 16828Riyadh 11474Kingdom of Saudi ArabiaTel: 966 1 4777633Fax: 966 1 4762808Steve McConnell, General ManagerSafwat Mahmood, Sales Manager

Cable & Wireless LtdPO Box 6196Riyadh 11442Kingdom of Saudi ArabiaTel: 966 1 4657092Fax: 966 1 4656426Ahmed Soleiman, Managing Director

Electronic Applications Establishment - EAEPO Box 10955Riyadh 11443Kingdom of Saudi ArabiaTel: 966 1 4659174Fax: 966 1 4650834Freij Al-Owedi, Press Officer

GulfNet KSAPO Box 52707Riyadh 11573Kingdom of Saudi ArabiaTel: 966 1 4628562Fax: 966 1 4623465

J.I. Corp (Global One)PO Box 60716Riyadh 11555Kingdom of Saudi ArabiaTel: 966 1 4646898Fax: 966 1 4623554 Ext 44

King Abdulaziz City for Science and Technology -KACSTPO Box 6086Riyadh 11442Kingdom of Saudi ArabiaTel: 966 1 4883555Fax: 966 1 4813566Saleh Al-Athil, Chairman

Prime NetPO Box 56163Al-Akariyah Centre, 7th floorRiyadhKingdom of Saudi ArabiaTel: 966 1 4193000Fax: 966 1 4191557

Page 12: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaDirectory

Sahara NetworkPO Box 5480Dammam 31422Kingdom of Saudi ArabiaTel: 966 3 8332133Fax: 966 3 8345652Haitham Abo-Aisha, General ManagerKais Al-Essa, Operations Manager

Saudi Globalstar OperationsPO Box 25916Riyadh 11476Kingdom of Saudi ArabiaTel: 966 1 4775560Fax: 966 1 4783706Malek Antabi, CEO

Saudi Logistics and Electronics Co - SALECPO Box 1039Jeddah 21431Kingdom of Saudi ArabiaTel: 966 2 6697220Fax: 966 2 6696184Zuhair A. Azhar, President & CEO

Saudi Telecommunications Company - STCPO Box 87912Riyadh 11652Kingdom of Saudi ArabiaTel: 966 1 4529166Fax: 966 1 4702050Ali bin Talal Al-Jahani, ChairmanAbdulrahman Al-Yammi, PresidentKhalid Balkheyour, Director - International RelationsSami Mobarah, International RelationsSaad Al-Mazrou, General Manager - Commercial

Services

Telecom Italia Saudi ArabiaPO Box 60149Riyadh 11545Kingdom of Saudi ArabiaTel: 966 1 4626443Fax: 966 1 4626461D. Venditti, Chief Executive

Telecoms equipment suppliersTelecoms equipment suppliers

Abdullah Fouad Company LtdPO Box 257Dammam 31411Kingdom of Saudi ArabiaTel: 966 3 8324400Fax: 966 3 8345722Fouad A. Fouad, President

Advanced Communications & Electronics SystemsPO Box 66267Riyadh 11576Kingdom of Saudi ArabiaTel: 966 1 4622963Fax: 966 1 4631108M. Al-Rasheed, Chairman & CEOAkram Aburas, Managing Director

Ahmad Nassir Albinali Co - TelecommunicationsDivisionPO Box 2Dammam 31411Kingdom of Saudi ArabiaTel: 966 3 8266675Fax: 966 3 8265245Elie J. El-Hawi, Construction Manager

Al-Bassam InternationalPO Box 14424Jeddah 21424Kingdom of Saudi ArabiaTel: 966 2 6653837Fax: 966 2 6659032Sardar Ahiskali, General Manager

Al-Bilad BCI Telecommunications LtdPO Box 88526RiyadhKingdom of Saudi ArabiaTel: 966 1 4651325Fax: 966 1 4654137F.A. Al-Somait, Chairman

Alcatel Saudi ArabiaPO Box 20924Riyadh 11465Kingdom of Saudi ArabiaTel: 966 1 4726400Fax: 966 1 4726500Giovanni Selmi, Country Manager

Alcatel Saudi ArabiaPO Box 52911Jeddah 21573Kingdom of Saudi ArabiaTel: 966 2 6640000Fax: 966 2 6641776Antoine Ghafari, General Director

Page 13: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi Arabia

Al-Hammam Murray Telecom Co LtdPO Box 230Rahimah 31941Kingdom of Saudi ArabiaTel: 966 3 6672715Fax: 966 3 6672719Jay Murray, ChairmanYahya Al-Quraishah, Managing Director

Al-Ma’ali CorporationPO Box 6002Riyadh 11442Kingdom of Saudi ArabiaTel: 966 1 4648231Fax: 966 1 4645625Abdullah Mohammad Al-Sheikh, General Manager

Amer Al-ModhyanPO Box 6367Dammam 31442Kingdom of Saudi ArabiaTel: 966 3 8275334Fax: 966 3 8276247Amer Al-Modhyan, General Manager

Aptec SAPO Box 94609Riyadh 11614Kingdom of Saudi ArabiaTel: 966 1 4601950Fax: 966 1 4601933Ayman Al-Kharroubi, Managing Director

Arabian Computer Supplies Company - ArcomPO Box 52839Riyadh 11573Kingdom of Saudi ArabiaTel: 966 1 4505916Fax: 966 1 4505917Taha A. Al-Khiary, PresidentAhmad Y. Al-Khiary, Vice-President

Arabian Control SystemsPO Box 341Dhahran Airport 31932Kingdom of Saudi ArabiaTel: 966 3 8945777Fax: 966 3 8946909Robert Sultani, Managing DirectorJerry Tan, Director - Contracts, Admin and Resourcing

Binladen Telecommunications CompanyPO Box 1223Riyadh 11431Kingdom of Saudi ArabiaTel: 966 1 4650604Fax: 966 1 4653734Alawi Baroom, Deputy General Manager

Binladen Telecommunications CompanyPO Box 6045Jeddah 21442Kingdom of Saudi ArabiaTel: 966 2 6918787Fax: 966 2 6918525Alawi Mohammed Mohammed, Executive DirectorJohn Dickson, Marketing Manager

Compaq Computer TSO IncPO Box 13711Riyadh 11414Kingdom of Saudi ArabiaTel: 966 1 2180909Fax: 966 1 2180900

Electronic Equipment Marketing CoPO Box 3750Riyadh 11481Kingdom of Saudi ArabiaTel: 966 1 4771650Fax: 966 1 4785140Harb Al-Zuhair, Chairman & CEO

EricssonPO Box 6121Riyadh 11442Kingdom of Saudi ArabiaTel: 966 1 4785800Fax: 966 1 4741086Lennart Kalling, General Manager

GentecPO Box 43054Riyadh 11561Kingdom of Saudi ArabiaTel: 966 1 4645773Fax: 966 1 4650782Abdulaziz M. Al-Dablan, General Manager

GTE Telecom Saudi Arabia LtdPO Box 4837Khobar 31952Kingdom of Saudi ArabiaTel: 966 3 8825325Fax: 966 3 8828482Khalifa Al-Dubaib, Managing Director

Directory

Page 14: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaDirectory

Gulf Stars Computer SystemsPO Box 52908Riyadh 11573Kingdom of Saudi ArabiaTel: 966 1 4190222Fax: 966 1 4190202Abdulaziz Al-Tamami, Managing Director

Gulf Stars Computer SystemsPO Box 6700Dammam 31452Kingdom of Saudi ArabiaTel: 966 3 8273315Fax: 966 3 8266649Hamza Al-Alwah, Managing Director

ITS Saudi ArabiaPO Box 40487Jeddah 21499Kingdom of Saudi ArabiaTel: 966 2 6612449Fax: 966 2 6611941Najib Abi Karam, General Manager

Jeraisy Computer and Communications ServicesPO Box 62640Riyadh 11595Kingdom of Saudi ArabiaTel: 966 1 4620101Fax: 966 1 462519Fouad Hamdan, Executive DirectorIbrahim Al-Neghaimesh, General Manager - Sales

Lucent Technologies InternationalPO Box 4945Riyadh 11412Kingdom of Saudi ArabiaTel: 966 1 2397000Fax: 966 1 2397000John G. Heindel, President

MotorolaPO Box 50009Riyadh 11523Kingdom of Saudi ArabiaTel: 966 1 4781150Fax: 966 1 4730692Wael Marsy, Country Manager

Nahdi Trading & Contracting CorpPO Box 184Jeddah 21411Kingdom of Saudi ArabiaTel: 966 2 6472535Fax: 966 2 6479962Rabee Salim Al-Nahdi, General Manager

National Group for Communications Services (NGC)PO Box 56163Riyadh 11554Kingdom of Saudi ArabiaTel: 966 1 4633557Fax: 966 1 4652639Abdulaziz Al-Hagbani, General ManagerMichael Ali, Finance Manager

NEC Saudi ArabiaPO Box 15534Riyadh 11454Kingdom of Saudi ArabiaTel: 966 1 4653381Fax: 966 1 4647641Akio Sumitomo, General Manager

Newbridge Networks (Middle East) WLLPO Box 58019Riyadh 11594Kingdom of Saudi ArabiaTel: 966 1 4646660Fax: 966 1 4649785Paul Brett, Sales Manager

Northern Telecom Saudi ArabiaPO Box 1674Khobar 31952Kingdom of Saudi ArabiaTel: 966 3 8946652Fax: 966 3 8646652Geoff Land, Area Sales Manager

Philips/EricssonPO Box 7424Riyadh 11642Kingdom of Saudi ArabiaTel: 966 1 2464900Fax: 966 1 2462820Marwan Nasr, General Manager

Sangcom (Marconi Communications)PO Box 9854Riyadh 11423Kingdom of Saudi ArabiaTel: 966 1 4648877Fax: 966 1 4647476

Saudi American General Electric CompanyPO Box 10211Riyadh 11433Kingdom of Saudi ArabiaTel: 966 1 4656767Fax: 966 1 4631030

Page 15: Saudi Arabia

© CIT Publications Limited Telecommunications Markets in the Middle East

Saudi ArabiaDirectory

Saudi American General Electric CompanyPO Box 2321Industrial AreaDammam 31451Kingdom of Saudi ArabiaTel: 966 3 8570032Fax: 966 3 8579469

Saudi American General Electric CompanyPO Box 9508Jeddah 21423Kingdom of Saudi ArabiaTel: 966 2 6445043Fax: 966 2 6445834

Saudi Business Machines LtdJuffali Building, 2nd floorMedina Road, km 7Jeddah 21432Kingdom of Saudi ArabiaTel: 966 2 6600007Fax: 966 2 6651163

Saudi Ericsson Communications CoPO Box 9903Riyadh 11423Kingdom of Saudi ArabiaTel: 966 1 4785800Fax: 966 1 4793622Khalid Ahmed Al-Juffali, Chairman & CEO

Saudi Ericsson Communications CoPO Box 8838Jeddah 21492Kingdom of Saudi ArabiaTel: 966 2 6676000Fax: 966 2 6659287

Saudi Ericsson Communications CoPO Box 450Dammam 31411Kingdom of Saudi ArabiaTel: 966 3 8262222Fax: 966 3 8267755

Siemens LtdPO Box 9510Riyadh 11423Kingdom of Saudi ArabiaTel: 966 1 4765930Fax: 966 1 4475979Sami Juffali, ChairmanMichael Rohde, General Manager

Systems and Computer HousePO Box 63438Riyadh 11516Kingdom of Saudi ArabiaTel: 966 1 4767144Fax: 966 1 4767649

TelettraPO Box 1588Riyadh 11441Kingdom of Saudi ArabiaTel: 966 1 4779824Fax: 966 1 4760609Francesco Ratti, Managing Director

Western Electric SAPO Box 6948Jeddah 21452Kingdom of Saudi ArabiaTel: 966 2 6659180Fax: 966 2 6605869Abdullah A. Bugshan, President & CEO