Ericsson wins $826m Saudi contract

NEWS Ericsson, Sweden's beleaguered mobile phone company has won a contract worth up to $826m to expand Saudi Arabia's GSM mobile telecoms network. Ericsson will provide the total core network throughout the kingdom, as well as the major portion of the Saudi Telecommunications Company's (STC) radio network, covering the central and Eastern provinces as well as the Jeddah area. The expansion is set to make STC the largest and the most advanced GSM network in the Middle East and the project is due for completion by the end of 2002. Currently 85 per cent of the capacity of 2.6 million subscribers has already been taken and it is growing by 120,000 users a month. The contract is a big win for Ericsson, which has seen its shares decline 71 per cent in the past year. The company has axed 10,000 of its staff in a restructuring programme which it hopes will save it £1.375bn by the end of the year. It is now concentrating on building mobile phone networks rather than handset manufacturing, which it outsourced to Singaporean company Flextronics earlier in the year. Finland's Nokia won the remaining portion of STC's radio network in a contract worth up to $200m. In early morning trading on the Swedish stock exchange Ericsson shares had risen almost two per cent to Sk52.5 (£3.60) from Sk51.5 (£3.54). On the Finnish exchange Nokia was unmoved at E25 (£15.78).