UPDATE 2-Saudi regulator suspends Mobily from selling SIM cards

Matt Smith
Reuters Middle East

* Mobily suspended from selling prepaid sim cards

* Ban follows order from regulator that all sims must be


* Co says it is astonished by decision

* Says other operators also yet to comply with order

(Adds comments from company, analyst)

Nov 25 (Reuters) - Etihad Etisalat Co (Mobily),

Saudi Arabia's second-biggest telecoms operator, has asked to

meet the industry regulator after it was suspended from selling

pre-paid SIM cards, a company spokesman said, describing the ban

as "astonishing".

Mobily's sales of pre-paid, or pay-as-you-go SIM cards will

remain halted until the company "fully meets the pre-paid

service provisioning requirements," the firm said in a


"We're not sure when we can resume selling pre-paid SIM

cards," said a company spokesman. We've requested a meeting with

the CITC governor today to find out what's going on," he added,

in reference to the regulator.

In an earlier order the Communication and Information

Technology Commission said that from Sept. 28 all pre-paid SIM

users must enter a personal identification number when

recharging their accounts and this number must be the same as

the one registered with their mobile operator when the SIM card

was bought.

This applies not only to Mobily but also to rival operators

Saudi Telecom Co (STC) and Zain Saudi.

"This isn't just about Mobily - other operators also haven't

complied and so we're astonished we've been singled out," said

Mobily's spokesman. "We've done a huge campaign to inform

customers about the ID requirement."

The company has yet to comply with the order because not all

customers have updated their details, he said.

Mobily said the financial impact of the CITC's decision

would be "insignificant", claiming data, corporate and

"post-paid" contract revenues would be its main growth drivers.

"This could have a significant impact on Mobily's Q4

earnings - it depends on how quickly the company resolves this,"

said Asim Bukhtiar, Riyad Capital's head of research.

"Newcomers and visitors buy new SIM cards and if Mobily

can't target this market it will affect the business."

The new SIM registration requirements are a security


"From a CITC perspective it gives them better information on

who is using pre-paid cards - there were a lot of SIM cards

floating around that were not registered to anyone," added


Pre-paid mobile subscriptions are typically more popular

among middle and lower income groups, with telecom operators

pushing customers to shift to monthly contracts that include a

data allowance.

Shares in Mobily, which reported an estimate-beating 23

percent rise in third-quarter profits in October, were down 2.1

percent at 1202 GMT on the Saudi bourse.

No one at STC or Zain Saudi was immediately available for


(Reporting by Matt Smith; Editing by Greg Mahlich)

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