Verizon to spend $3bn on Saudi operation
Riyadh, December 15, 2008
US firm Verizon Communications has taken a 15 per cent stake in new Saudi fixed-line operator Optical Communications Company, which will need to spend $3 billion on infrastructure, an executive said on Monday.
"Our strategic and founding partner Verizon has agreed to take 15 per cent of the company's capital and undertake on a pro-rata basis the costs of investments we need," the Optical Communications executive told Reuters.
In addition to Saudi partners, the consortium also includes Millicom International Cellular. The executive declined to give more details on the breakdown of Optical's share ownership.
"For the moment, we have set a $3 billion budget for the optical wire infrastructure alone," he added. He asked not to be named because he is not allowed to speak to the media.
Optical Communications was among three operators which in 2007 won licences that would end state-controlled Saudi Telecom's fixed-line monopoly.
The other consortiums are led by Bahrain Telecommunications Company (Batelco) and Hong Kong's PCCW.
Optical Communications hopes to raise some of the cash it will need to launch its operations through an initial public offering next year, the executive said.
"It should have happened this year, but market conditions were not adequate," he said. The company plans to start its services in 2010, he said.-Reuters