Exile on Zain Street

By Matthew Reed

For a long time, Informa Telecoms & Media analysts have felt like lone voices in the wilderness, banging on about the potential for MVNOs in Saudi Arabia, only to be met with apparent indifference and even scorn.

There is an opportunity in Saudi Arabia for the kind of market segmentation that can be achieved with MVNOs, we said – and the country’s expatriates represent a prime target for such services.

So it was with interest – and perhaps, dare we say, even a little smugness – that we read today that Zain Saudi Arabia, the country’s No. 3 mobile operator, has launched a low-cost international calls plan in partnership with Connect Saudi Arabia, a company that is part-owned by regional MVNO operator Friendi Group. (Dubai-based Friendi has already set up MVNOs in Oman and Jordan and has ambitions to establish others across the MENA region and beyond.)

Zain’s new plan, called Friendi Mobile Package, offers low rates for calls and text messages to destinations including the Philippines, Hong Kong, Singapore, the US, Canada, the UK, Bahrain and the UAE. There will also be international mobile content and credit transfer services.

Now, a statement from Zain about the partnership says that Connect is assisting with the operation and distribution of the Friendi package on an outsourced basis, but it does not describe Connect, Friendi or the new offering as an MVNO.

But Saudi Arabia’s other two mobile operators, STC and Mobily, are likely to take a dimmer view of proceedings and are expected to contest the legality of Zain’s new offering on the basis that it constitutes a form of MVNO, for which there is no mandate within the country’s existing telecoms regulations.