Zain KSA, Mobily mull options for new merged towers entity, share offering

Zain KSA and Mobily

Etihad Etisalat Co. (Mobily) and Mobile Telecommunication Company Saudi Arabia (Zain KSA) are studying several options regarding Towers Co., including the possibility of offering a share not exceeding 30% in the Saudi market.

Consultants have already been appointed to study the proposed offering, with discussions currently underway, CNBC Arabia reported, citing sources.

There are other options that include forming an alliance to buy telecom towers owned by both parties by acquiring a minority stake, with Mobily and Zain KSA owning majority stakes.

Meanwhile, there is another option to operate these towers on behalf of the two companies through an intermediary company with a rate of return (RoR) system.

An alliance of companies outside Saudi Arabia may be entered with local firms to acquire a stake in the new company.

All matters are still on the table, the sources said.

According to data compiled by Argaam, Zain KSA received in March a letter from the Communications and Information Technology Commission (CITC), giving its in-principle approval on the joint application from Zain KSA, Mobily, Raidah Investment Co. (AlRaidah) and IHS KSA Ltd. (IHS).

The approval allowed to merge and unify these towers under Towers Co., a Saudi-registered commercial entity, to obtain a license for providing infrastructure wholesale services (category A towers and masts).