Saudi MVNO Lebara looking to launch in Q1

Mobily will start leasing its mobile phone network to MVNO Lebara in the first quarter, according to Karl Michael Henneking, Mobily’s chief corporate strategy officer.

The winning bidders – Lebara, Virgin Mobile Middle East and Africa (VMMEA), and Axiom – were announced last June, and have yet to receive their licences from the Communications and Information Technology Commission (CITC).

"We expect Lebara to launch services in the first quarter of 2014. The CITC is supposed to issue the licences at the end of January," Henneking said.

STC has teamed up with VMMEA, and Zain Saudi with Gulf retailer Axiom.

Saudi Arabia’s mobile penetration is around 185 per cent, which suggests the MVNOs will have to be at their optimum in order to carve out a profitable market share.

"Not all MVNOs will be successful," Henneking predicted.

He said some Lebara customers would use its services as their sole mobile account but that a larger share would sign up to Lebara as a second, back-up service.

In addition to the revenue and fees they pay to the host telecom companies, the MVNOs will also pay a licence fee of SAR 5 million (US$1.3 million) and 15 percent of their revenues to the regulator.