Virgin Mobile Middle East andAfrica (VMMEA), part-owned by British entrepreneur RichardBranson's Virgin Group, launched telecoms services in SaudiArabia on Tuesday, beginning the biggest shake-up in thekingdom's telecoms sector in six years. VMMEA is launching two brands after benefiting from thenational telecoms regulator's decision to order the country'sthree mobile operators to each host a mobile virtual networkoperator (MVNO) in an effort to stimulate competition. The two brands being launched by VMMEA are Virgin Mobile,aimed at the youth market, and Friendi Mobile, targeting Saudi'sexpatriate workers. As well as VMMEA's tie-up with STC, Jawraa Lebara partneredwith No.2 operator Mobily. Dubai retailer AxiomTelecom did likewise with Zain Saudi, but theregulator subsequently ordered that licence to be retendered ina process still ongoing. VMMEA and Jawraa last week acknowledged that problemsarranging interconnection with other operators and satisfyingstate security concerns had delayed their launch, but theregulator has now given VMMEA the go ahead, according to acompany statement on Tuesday. The launch, days before Islam's annual haj pilgrimage, istimely. An estimated 1.4 million Muslim pilgrims are expected toarrive in the kingdom this year. Such an influx is a boon for telecoms operators, withtourists often buying local sim cards to call locally and tofriends and family at home. VMMEA is aiming to tap into Saudi Arabia's large andrelatively young population. Its economy is forecast to grow 4.2percent this year, according to a Reuters poll of economiststhis month, while the CIA Factbook estimates that 47 percent ofits 27.3 million people are under 25. The introduction of MVNOs is the biggest change to Saudi'stelecoms sector since Zain Saudi became its third mobileoperator in 2008. The kingdom is only the second Gulf countryafter Oman to allow MVNOs, which are widespread in Europe, NorthAmerica and Asia. VMMEA, which also has operations in Oman, Jordan, SouthAfrica and Malaysia, predicts that Saudi's introduction of MVNOscould spur neighbouring countries to do likewise. "The regional telecommunications industry is set to bereshaped over the coming years," it said. (Editing by David Goodman)
