Saudi Telecom (STC) said on Wednesday it wants to buy the 25 percent stake Oman is selling in Oman Telecommunications Co (Omantel) after it spent more than $6 billion in foreign expansion in 13 months. Shares of both firms jumped more than 3 percent after the largest Arab telecom firm by market value said it would seek to set foot in its second Gulf market outside of Saudi Arabia. Pre-qualified bidders will be announced by the end of this month, STC said. Emirates Telecommunications Corp (Etisalat) has said it would be interested in bidding. STC did not give details in a statement on the bourse website and its Chairman Mohammed Al-Jasser and spokesman Mohamed Al-Faraj could not be reached for comment. Oman, which owns 70 percent of Omantel, kicked off the sale earlier in July, inviting investor interest in a deal it hopes will boost the state-controlled firm's competitiveness. Mobile penetration in 2.5-million-strong Oman was 96 percent in 2007, the region's lowest, according to official estimates. STC has spent in excess of $6.5 billion since June 2007 as it sought to catch up with regional rivals, such as Etisalat, in expanding abroad while facing greater competition in Saudi Arabia, where penetration hovers around 100 percent. STC made its first foreign acquisition in June 2007 when it bought 25 percent of Malaysia's Maxis for $3 billion, opening markets in India, Indonesia and Malaysia. It also spent $937 million to buy 26 percent in Kuwait's third mobile telephone license and snatched 35 percent of Oger Telecom for $2.56 billion to access Turkey and South Africa. While STC's Kuwaiti operation has yet to start, the Oger and Maxis acquisitions have had a good impact on STC, which has been struggling since 2005 to fend off strong competition from Mobily, the kingdom's second mobile telephone operator. STC, the only fixed-line operator, competes with Etihad Etisalat (Mobily) on a saturated mobile communication market locally. STC accounts for 60 percent of mobile telephone subscriptions in the kingdom. STC and Mobily are bracing for more competition this year with the expected launch of a third operator, Zain. STC made a its biggest quarterly profit in the second-quarter after it started consolidating Oger Telecom. It rallied more than 6 percent on Monday on the quarterly results. Analysts say STC is focusing its expansion on countries with large Muslim communities to create greater synergies from roaming services during annual Islamic pilgrimage rites, which attract millions of worshipers to Saudi Arabia every year.
