Saudi Arabia restricts mobile SIM card ownership

  • Saudi Arabia has imposed limits on the ownership of prepaid SIM cards for citizens and foreigners. Foreign residents, who make up more than a third of the population, are now limited to two prepaid SIM cards across all operators, according to two people familiar with the matter. The limit applies to both voice and data lines in a country where many rely on data SIMs for Internet. Saudis are restricted to as many as 10 prepaid SIM cards, one person said.

“This is considered a temporary procedure to correct and remedy the large number of illegal SIM cards in the market,” the Communications and Information Technology Commission, Saudi Arabia’s telecommunications regulator, said in a statement. “That has resulted in the abuse of those SIM cards to carry out terrorist operations and acts harmful to national security.”

“Telecom shares should take a hit,” Muhammad Faisal Potrik, head of research at Riyad Capital in Riyadh, said after the report.

Shares in Etihad Etisalat, known as Mobily, fell 0.7 percent. Mobile Telecommunications Co. of Saudi Arabia, known as Zain, fell 0.5 percent, while Saudi Telecom Co., the kingdom’s biggest operator, trimmed gains.

The rule could put pressure on revenue during the kingdom’s worst economic slowdown since 2009. The International Monetary Fund expects gross domestic product to expand 0.4 percent this year, compared with 1.4 percent in 2016, as oil-output cuts and austerity measures weigh on businesses and consumers.

Etihad Etisalat, known as Mobily, reported a first quarter loss of 163 million riyals on Sunday, compared with a profit of 20 million riyals in the same quarter last year. In a statement, the company cited pressure on sales and the disconnection of unregistered customer lines driven by fingerprinting implementation as reasons for the loss.

The government last year required companies to fingerprint customers in order to link SIM cards to verified identities. (Source credit – Bloomberg)

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