Saudi Telecom refutes Atheeb charges
Riyadh, February 16, 2011
Saudi Telecom (STC) is not violating market regulations, it said on Wednesday, after smaller rival Atheeb Telecom filed a lawsuit against it for allegedly breaching anti-monopoly laws.
On Tuesday, Atheeb said it filed a case against STC, saying it was prevented from providing some of its services which cost the company accumulated losses estimated at $174.9 million.
"(STC) would like to clarify to the public that it follows the telecommunication market's rules and regulations," STC said in a bourse statement on Wednesday.
"The issue raised by Atheeb Telecom is related to demands that are not supported by regulations and contradict the current agreement between the two firms."
Shares in STC closed 0.5 percent lower after the news on Tuesday while shares in Atheeb closed 0.4 percent higher.
Atheeb Telecom is Saudi Arabia's first partly private fixed-line phone operator and competes with majority state-owned Saudi Telecom, which dominates the market.
Bahrain Telecommunications Co. holds a 15 percent stake in Atheeb Telecom.
Earlier this year, Atheeb said it will seek shareholders approval for a 600 million riyal rights issue after it accumulated losses exeeding three-quarters of its capital of 1 billion riyals.
The firm has been facing financial challenges since June last year when its former chief executive resigned after the firm posted losses close to 40 percent of its capital, only one year after starting its business in 2009. - Reuters