Saudi Arabia- Pre-qualification for Cellular Mobile Services Licensing

 

In November 2003, the Saudi Arabian telecommunications regulator, the Communications and Information Technology Commission (“CITC”), announced its intention to license one new cellular mobile service operator to provide cellular mobile services in the Kingdom of Saudi Arabia.  Specifically, this licence was for the installation and operation of a GSM network and the provisioning of cellular mobile services in Saudi Arabia.  The licensing process designed by the CITC included a pre-qualification stage.  Parties that were interested in applying for the licence therefore were required to pre-qualify.

In January 2004, the CITC issued a Request for Pre-Qualification (“RFPQ”) for the cellular mobile services licensing process.  The RFPQ outlines the procedures that govern the pre-qualification phase of the licensing process.   

Pursuant to the RFPQ, in order to be considered for pre-qualification, interested persons were required to submit a Response to the CITC, and to pay the RFPQ fee, as set out in the RFPQ.  The RFPQ further stipulated that, in order to pre-qualify, Responses must demonstrate that the candidate has the following:

·        appropriate technical operational experience and capabilities for deploying and operating a cellular mobile service;

·        appropriate commercial experience and capabilities for running a cellular mobile services company;

·        adequate financial resources;  and

·        the commitment to comply with the CITC statutes and all relevant and applicable Saudi laws and regulations, in particular Article 4 of the Saudi Telecommunications Act, which stipulates that fixed and mobile telecommunications services must be provided through joint-stock companies that place their stock for public subscription.

The RFPQ outlines in detail the criteria that will be applied to determine whether a candidate has complied with the above requirements. 

The RFPQ also includes a list of information requirements with which candidates must comply in order to be considered for pre-qualification.  These requirements generally pertain to providing information about the candidate, including, for example, information about the structure of the consortium applying for licence;  the role of each member of the consortium;  corporate information about each consortium member, such as the name, data, and location of incorporation;  a description of the intended final shareholding of the public joint stock company, specifying the ownership level of each consortium member;  contact information for each consortium member;  and annual financial statements of each consortium member.

According to the RFPQ, the CITC would develop a list of candidates eligible to apply for the cellular mobile services licence after reviewing the Responses.  Pre-qualified candidates would then be eligible to purchase a copy of the Request for Applications and a draft copy of the cellular mobile services licence upon signing a confidentiality agreement and paying the requisite fee.

The RFPQ also contains a number of other provisions that address a variety of issues.  These issues include, inter alia:

·        cross-ownership;

·        disqualification prior to the issuance of the cellular mobile services licence, and disqualification subsequent to the issue of licence; 

·        verification of information, and verification and use of information in the Responses;

·        costs of RFPQ Response preparation;

·        a reservation of CITC rights;

·        various legal and formal requirements, such as provisions concerning the governing law, dispute resolution procedures, and  language; 

·        the schedule of the pre-qualification process;

·        the deadline for submitting a Response and the RFPQ fee;

·        questions concerning the RFPQ;  and

·        correspondence with the CITC.

 

The pre-qualification phase featured an opportunity to ask the CITC questions about the cellular mobile services licensing process and the cellular mobile services licence itself.  Candidates posed a wide variety of questions, which were then answered by the CITC.  The questions and answers were distributed to all candidates and published on the CITC’s website.  A link to the document containing these questions and answers is set out below.

 

TRT-PN-M2-63

 

 

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