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Saudi Arabia’s Etihad Etisalat Co, a mobile phone company also known as Mobily, said it signed an agreement to extend its co-operation with Etihad Atheeb Telecommunication Co, one of three operators of fixed line telecommunications networks in the kingdom.
The agreement, which is subject to regulatory approvals, involves Etihad Atheeb supplying Mobily with access to its fixed lines and voice services, and Mobily providing infrastructure for voice and data throughout the kingdom over the Saudi National Fibre Network.
Etihad Atheeb has long complained that Saudi regulators have blocked it from providing mobile services that would make the company more competitive. It faces tough competition from the kingdom’s other fixed line operators, Saudi Telecom and the local units of Kuwait’s Mobile Telecommunications Co and Emirates Telecommunications Corp.
The new agreement should improve the competitiveness of Mobily and Atheeb against Saudi Telecom, said Abdulelah Babgi, an equity researcher at NCB Capital in Jeddah. Mobily will be able to use Atheeb’s fibre optic network to provide voice and fixed line services to about 1mn domestic and business customers, while Atheeb can use Mobily’s network for voice and data services in Saudi Arabia and abroad, Babgi noted in an email.
Mobily and Atheeb agreed to cooperate earlier this year to provide fixed voice services to a number of commercial and residential complexes, a move that was seen as helping Mobily to diversify its revenue streams.
Atheeb recently appointed Emad Maali as its new chief executive following the resignation in August of former CEO Zaid bin Abdullah Shabanat. That followed the company’s $80.5mn loss reported for the year to March 31.
In contrast, Mobily reported a 1.51bn Saudi riyal ($402.9mn) net profit for the third quarter of 2012, up 23% on the year. The company attributed the increase in profits to higher revenue from data and increased sales of smartphones.