Saudi regulator to re-tender Zain MVNO licence

The process to license three new mobile virtual network operators (MVNOs) in Saudi Arabia has encountered an unexpected delay after the Saudi regulator this week announced a new tender for Zain Saudi's network.

The Communication and Information Technology Commission (CITC), which had previously named Dubai-based retailer Axiom Telecom as the provisional winner of the Zain MVNO licence, did not give any reason why it was re-tendering the licence. It merely reconfirmed the recent licensing of MVNOs hosted on the Saudi Telecom (STC) and Mobily networks in Saudi Arabia, and said it is inviting applications for licensing MVNOs on Zain's network.

However, the re-tender appears to be down to red tape: Axiom chief executive Faisal al-Bannai told Reuters his company had been unable to submit a document that had been required by the regulator, although he said that issue had now been resolved and Axiom would be submitting its tender in the next 48 hours.

Only in December Axiom said it was "liaising with CITC for the final phase of the licence application process." The move will also come as a blow to Zain, which will not be able to collect revenue from a wholesale arrangement at the same time as rivals.

The two confirmed MVNO licences are for Virgin Mobile Middle East & Africa (VMMEA), which plans to launch mobile services on the STC network in the first half of 2014, and the London-based Lebara Group for the Mobily network. Lebara has said it expects to launch services in the second quarter of 2014, targeting the migrant community and those with relatives and friends abroad with low-cost services.

VMMEA is partly owned by the Virgin Group founded by Sir Richard Branson. The Dubai-based group was established in 2006 and operates five MVNOs in the region: in South Africa, Oman, Jordan, Malaysia and currently an outsourced B-brand in Saudi Arabia. VMMEA's ambition is to launch 10 operations in total over the next five years.

The CITC announced plans in early 2013 to license MVNOs as part of efforts to shake up the Saudi mobile market, and shortlisted the three provisional licence winners last June. The deadline for the new Zain tender is now June 2, 2014.

For more:
- see this CITC release
- see this Reuters article

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