MTN may lose Saudi bid

Johannesburg, 14 Jul 2004

The MTN consortium`s bid of approximately R17.96 billion for the second cellphone operator licence in Saudi Arabia may fail after the Etisalat Consortium made the highest bid of R19.86 billion.

MTN was placed second out of six short-listed bidders, with Egypt`s Orascom coming in third, offering R15.95 billion. The Etisalat Consortium is led by Etisalat from neighbouring United Arab Emirates.

Phuthuma Nhleko, MTN Group CEO, said at the MTN results in June that the Middle East region had been identified as the most viable one for growth, since the continent`s major cellular operators already dominated much of the African market. However, Nhleko said MTN was not processing any bids for more licences at that time.

Less than three weeks later, MTN together with a number of Saudi companies, put in the R17.96 billion bid for the Saudi licence. If MTN fails to win the licence, it will be the second time this year it has lost a bid in the Middle East, after it failed to win a bid for an operating licence in Iran in February.

"While we await the final decision of the council of ministers, MTN will continue to identify value-enhancing expansion opportunities in line with the group`s vision to become a leading provider of global communications services," says Nhleko.

Each consortium included an international operator and at least five Saudi companies and the Saudi Communications and Information Technology Commission (CITC) is expected to choose the Etisalat Consortium, providing it proves its solvency and agreement with a bank approved by the CITC.

An Arab industry report has predicted that revenues in Saudi Arabia`s GSM market will soar to $7.9 billion by 2007.