Saudi Telecom Cuts 3,000 Jobs - Eyes Further Overseas Expansion

Saudi Telecom says that it is seeking to invest in telecoms operators in North Africa, and will cut about 14% of its workforce in its home market. The redundancies will affect around 3,000 staff.

The company had a recent set back when an approach to French media group, Vivendi to buy its stake in Morocco's Moroc Telecom was rejected. However, the company never made an official bid and had only engaged in informal talks.

"We tested the waters for Maroc Telecom but we didn't get a positive feedback ... We hope Vivendi will change its mind," Saudi Telecom Chief Executive Saud Al Duweish told the Reuters news agency, adding "We are interested in the Middle East and North Africa in general but we are looking at North Africa in particular."

Saudi Telecom recently paid US$2.6 billion to take a 35% stake in Oger Telecom, which owns a majority stake in Turk Telekom and 75% of South African mobile operator, Cell C. Saudi Telecom also owns a 25% stake in Malaysia's Maxis and holds a 26% stake in the consortium setting up a third mobile network in Kuwait.

Al Duweish said he was still interested in participating in the stalled privatisation of Algeria Telecom. "We will always be interested in Algeria, which is a country with huge potential."

Saudi Telecom was established in 1998, and had a full monopoly over the telecom market until 2003, when the VSAT market was liberalized. Subsequently, STC's monopoly in the mobile market was ended when the second mobile license was granted in 2004 to Etihad Etisalat (Mobily). In March 2007, a consortium led by Kuwait's Zain won the third mobile license, and launched its services in 2008. The fixed market was liberalized when three consortia won fixed line licenses in April 2007, bringing the total number of fixed line licenses in the kingdom to four and ending STC's monopoly over fixed lines.

Posted to the site on 15th September 2008