International Communications

1. SAUDI ARABIA’S
TELECOMMUNICATIONS

2. TELECOMMUNICATIONS
 In a bid to privatize the telecommunications industry, the
government in April 1998 approved the creation of the Saudi
Telecommunications Company, an entity which originally
comprised the telecommunications arm of the Post,
Telegraphs, and Telephone ministry (PTT). According to the
initial plan, shares in the company were to be sold starting at
the beginning of 2000, with the government stake in the
company being eventually reduced to zero.
 The Saudi Arabian telecom market is rapidly becoming more
competitive. The large population, fast growing economy and
relatively low penetration rates provide make this a market
with exciting potential. A new second mobile operator has
In 1998, despite a growth in investment, the
rapidly grown its subscriber base and a third mobile license
telecommunications sector in Saudi Arabia was fairly
limited. By 1999, the expansion of the industry had become has launched. The Saudi market will be the first in which the
a priority. The U.S. firm Lucent Technologies won a US$4 Gulf’s three largest mobile operators compete. New
billion contract in 1994 to install fixed phone lines competitors in the broadband market have also shown they
throughout the kingdom, but 4 years later the 2.9 million intend to make a serious bid for market share.
existing lines still represented under 15 lines per 100
inhabitants, according to the International
Telecommunication Union. In an effort to bring the system
in line with emerging East European economies, the
government is seeking to increase the number of lines to at
least 30 per 100 residents by 2002. Lucent, on top of its
initial contract, was hired in 1998 to expand mobile phone
service in a deal worth US$700 million. The government
hopes the expansion will enable the kingdom to
accommodate 5 million cell phone subscribers by the end of
2001

3. TELECOMMUNICATIONS COMPARISON
Cable
Newspaper Mobile Fax Internet Internet
Country Radios TV Sets subscriber PC’s
s Phones Machines Hosts Users
s
1996 1997 1998 1998 1998 1998 1998 1999 1999
Saudi
57 321 262 N/A 31 N/A 49.8 1.17 300
Arabia
United
215 2,146 847 244.3 256 78.4 458.6 1,508.77 74,100
States
Egypt 40 324 122 N/A 1 0.5 9.1 0.28 200
Iran 28 265 157 0.0 6 N/A 31.9 0.05 100
A-Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.
B-Data are from the Internet Software Consortium (http://www.isc.org) and are per 10,000 people.
SOURCE: World Bank. World Development Indicators 2000.

4. ELECTRICITY
 By the end of the 1990s, the demand for energy in Saudi Arabia had reached an all-time
high, outstripping supply and, in some cities, causing frequent power out-ages during
periods of high use. Short-term solutions, such as raising prices to curb demand, proved
ineffective.
 For instance, in 2000, price increases totaling almost 78 percent were introduced for
electricity. However, after 6 months, vehement public protests were launched in response
to high electricity bills. As a result, the price hikes were rescinded before they could have
any substantial effect. To meet growing energy needs over the long term, the government
has set out to restructure the industry and increase investment from both the public and
private sectors.
 In November of 1998, it was announced that the 10 separate electricity companies in Saudi
Arabia would be consolidated into a single company, the Saudi Electric Company. The
government has expressed its intention to eventually relinquish its 85 percent stake in the
sector. By consolidating the sector, the government hopes to streamline operations and
improve efficiency, making the industry more dependable and more profitable, and in turn
more attractive to outside investors. By 2020, the government's aim is to increase power
generation capacity by over 3 times from where it stood in 1990, from 22,000 megawatts
(MW) to 69,000 MW. Saudi Arabia, which imports no energy, is entirely dependent upon oil
for the generation of its power.

5. WHO OWNS THE MEDIA?
 We find that government ownership of the media is higher in countries
that are poorer, have more autocratic regimes, and higher overall
state ownership in the economy. These results cast doubt on the
proposition that state ownership of the media serves benevolent ends.
 In Saudi Arabia, members of the Royal Family are the ultimate owners Such are the unclear and sometimes contradictory forces that
of two of the five most popular dailies. In cases where there is a direct obstruct press freedom in Saudi Arabia. Today, Saudi papers
family relationship between the ultimate owner and the head of state, publish news and opinions that would have been unthinkable just a
and the governing system is a single party state, we classify the media few years ago, even as government and religious officials employ
enterprise as state owned. an array of behind-the-scenes controls to curtail enterprising
coverage that offends the government or important religious
constituencies.
 Ahmed Faheed tells a more complicated story. Shams ,his tabloid, he
said, decided to run the cartoons only after the country's highest Government officials dismiss editors, suspend or blacklist dissident
religious authority, Sheikh Abdel Aziz al-Sheikh, declared it writers, order news blackouts on controversial topics, and
permissible if the intent was to highlight the offense against Islam. admonish independent columnists over their writings to deter
Faheed pointed out that it wasn't until 20 days after the cartoons ran in undesirable criticism or to appease religious constituencies.
Shams that the Information Ministry, whose own censors had cleared
the issue for distribution, moved to halt publication of the paper. The country's conservative religious establishment acts as a
powerful lobbying force against enterprising coverage of social,
 What happened in the three weeks between the time the paper hit the cultural, and religious matters. The multilayered religious sector
newsstands and its closure illustrates the backdoor politicking that includes official clerics, religious scholars, the religious police,
often dictates what can and cannot be said in the Saudi press. radical revivalist preachers, and their followers.
According to Faheed, whose account was verified by other sources,
hard-line clerics and religious figures protested Shams' liberal Compliant government-approved editors censor controversial
approach and urged authorities to take action. A compromise worked news, comply to official pressures to tone down coverage, and
out through the Information Ministry allowed the paper to reopen if it silence critical voices.
dismissed its 32-year-old editor-in-chief, Batal al-Qaws. He was fired
in late February.

6. SAUDI ARABIA INDUSTRIAL SUMMARY
•Media is regulated by the royal family
•Electricity fuels telecommunications via power from
petroleum
•Telecommunications is starting to boom rapidly in Saudi
Arabia
•Lead by King Abdullah of
Saudi