Etihad Atheeb Telecom, one of three firms licensed to operate new fixed-line networks, is seeking to raise SAR 300 million (US$80 million) by February 2nd through the offering of 30 million shares, representing 30% of its capital.  The shares sale is Saudi Arabia’s first IPO since August 2008, when bourse regulators froze fresh listings.  Etihad Atheeb plans to invest US$1 billion over five years in its fixed-line operation and target government and industrial hubs and regions covered insufficiently by Saudi Telecom (STC).  And at least one observer is cautiously optimistic.  “On the fundamental side, telecoms is a growing sector that is counter-cyclical to recession, secondly it is a small IPO,” said John Sfakianakis, SABB bank’s chief economist.

Ethiad Atheeb The company, whose shareholders include Bahrain Telecom (Batelco) and Saudi private investors, will face competition from current fixed-line monopoly STC, as well as by Optical Communications Co, led by America’s Verizon Communications, and by the Al-Mutakamilah Company, which is led by Hong Kong’s PCCW.  STC has about 4.5 million fixed-line subscribers and around 1.3mn Internet users (Saudi Arabia has a population of 24 million).

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