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Saudi telecom sector forges ahead

By committing sizeable investments into infrastructure and gradually reducing the prices...

By committing sizeable investments into infrastructure and gradually reducing the prices on services, Saudi Arabia is making a decisive move to expand its telecommunications and Internet sectors.

"In spite of grappling with a difficult legacy of poor infrastructure, with the added problem of geographic dispersion and difficult geography, Saudi Arabia has managed to pull itself up into the top three Gulf states in terms of telecoms," reports 'CommsMEA'.

"A growing availability of wireless technologies such as GSM and satellite networks has served to break the barriers of long-distance transport. The kingdom has implemented a series of projects to deploy and maintain communications networks across the country available to vastly more residents."

Saudi Arabia's domestic networks were dependent on terrestrial microwave trunks and analogue coaxial cable networks. The latter spans 4,000 km between Riyadh and Dammam, and Riyadh and Jeddah.

Only over the recent past were fibre connections between key centres introduced, starting with a 2,000 km multimode link between Makkah and Taif. Fibre links are now much more commonplace.

The Saudi Telecom Corp. (STC) recently opened new ADSL services for customers, and migrated analogue voice and data services to a new digital exchange. The latter move is expected to reduce maintenance costs as STC will be able to use a single network for all business services.

Another key development has been the expanded satellite-based coverage across the kingdom offered by the commercial launch of Thuraya recently. This complements the introduction of Globalstar's Saudi services last december.

This ensures that the entire stretch of the country will now be covered by mobile phones.

As and when Iridium comes out with its services, three operators will be competing to cover the whole country, apart from STC's own GSM services in cities and along major highways, CommsMEA reports.

"With this level of competition, prices should be forced down from their currently prohibitive highs, meaning low cost, high quality communications are available for the whole country."

There have also been revisions on charges for overseas calls made from the country. The biggest cuts have been to such countries as India, Pakistan, Sri Lanka, the Philippines and Indonesia, by as much as 31 per cent.

But "STC has a long way to go till it matches the kind of long-distance deals available in the West. "There is also a problem with incoming calls with STC charging high termination fees to international operators."

The Saudi authorities have confirmed plans to open up the fixed line market, which should "start to force prices down further." Competition will, however, continue to be a strictly local affair.

Telecoms continue to be among the sectors on the 'banned list', which essentially prohibits foreign companies from owning controlling stakes in certain industries.