Saudi operators announce tower deal

Saudi operators announce tower deal

According to TeleGeography's CommsUpdate and local news reports, two of Saudi Arabia’s leading mobile operators are hoping to establish a joint tower company.

Mobile Telecommunication Company Saudi Arabia (Zain KSA) has signed a non-binding Memorandum of Understanding (MoU) with Etihad Etisalat Company (Mobily) to form a joint committee.

According to filings by the two companies, the committee will be tasked with preparing a request for proposal (RFP) to buy the telecommunications towers owned by the two companies and merge them into one company with other investors, or operate them on their behalf.

The offer of RFP is to be completed within 30 days from the MoU signing date, which was 2 July. Even if an agreement is reached it will still be subject to regulatory approvals and conditions as well as internal approvals from both parties.

The reason given for the collaboration is said to be “to achieve maximum efficiency while improving the communication and information technology system”. However, while it is not explicitly stated in any of the reports, the prospect of two more operators joining the drive towards infrastructure sharing seems likely as 5G costs in particular drive a rethink of existing business models.

Last month for example, the Philippines’ Department of Information and Communications Technology (DICT) overhauled the country’s rules on tower sharing in a bid to improve coverage. The Indian regulator TRAI has called for tower firms to share active infrastructure such as RANs in order to reduce expenditure.

Meanwhile, in late 2019, Malaysian operators Celcom Axiata and Maxis agreed to share infrastructure. Zimbabwe and China can also be added to a growing list of countries where providers are being incentivised to share infrastructure or have done so where permitted.

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