Saudi operators' tower merger plans are abandoned

Saudi operators' tower merger plans are abandoned

In a move that reverses plans announced a year ago, two Saudi operators have apparently decided to abandon a mooted tower merger.

More accurately, Saudi telecommunications firm Etihad Etisalat Co (Mobily) announced on Sunday that plans for a joint venture with Mobile Telecommunication Co Saudi Arabia (Zain KSA) to merge the telecom towers of both companies under a single entity were no longer part of its strategy going forward.

According to local news reports, a Mobily representative was quoted as saying: “Mobily announces that the direction to form a consortium with Zain KSA, Raidah Investment Co. (Al-Raidah) and IHS KSA Ltd. (IHS) to acquire the telecom towers owned by Mobily and Zain KSA, and to merge and unify towers under a commercial entity registered in the Kingdom of Saudi Arabia...does not align with Mobily’s strategy and objectives of achieving financial and operational efficiency.”

We reported plans by these leading Saudi Arabian mobile operators to establish a joint tower company as long ago as last July. At the time Zain KSA had signed a non-binding memorandum of understanding (MoU) with Mobily to form a joint committee.

The joint venture was apparently approved by the Saudi Communications and Information Technology Commission (CITC) in March this year.

While it’s hard to say what caused the change of heart (and we await comment from Zain), Mobily says it will “continue evaluating alternative offers to achieve the best return for the company and its investors through maximizing the operation efficiency and upgrading the network, with the support and supervision of the CITC”. It adds, “Any material developments will be announced in due course.”