Saudi telcos agree royalty fees
Telecommunications operators Saudi Telecom Co., Etihad Etisalat (Mobily) and Zain Saudi Arabia said on Sunday that they had agreed with the government to a change in the calculation of their annual royalty fees.
The companies also said they had reached a deal with the government to settle disputed fees for previous years up to 2017. In return, the trio agreed to invest in upgrading their network infrastructure over the next three years.
The Kingdom has set specific goals to boost high-speed broadband Internet connectivity as part of its Vision 2030 plan to modernize the economy, including exceeding 90 percent of housing coverage in densely populated cities and 66 percent in other urban areas.
The operators said the agreement would involve an annual royalty of 10 percent of net revenue from telecommunications services, which went into effect from Jan. 1, 2018. Mobily said that it would also pay an annual license royalty equal to 1 percent of its annual net telecommunication revenues.
STC said the new calculation was compared with the previous fee of 15 percent of net revenues from mobile services, 10 percent of net revenues from fixed line services and 8 percent of net revenues from data services.
STC said the change would have a positive impact on its financial results during the fourth quarter of 2018, while Zain Saudi said it would mean a drop in its payment for the period Jan. 1 to Sept. 30 by SR220