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Wed 4 Jan 2017 01:50 PM

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Expats blamed for failure of telecom sector Saudisation

Foreign traders continue to sell mobile phones at prices much cheaper than those offered in shops

Expats blamed for failure of telecom sector Saudisation
(Getty Images)

Failure of the Saudisation of the Kingdom’s telecom sector is largely due to the presence of expats who are illegally involved in mobile phone maintenance and sale and who offer products and services at reduced prices, experts believe.

Authorities’ lack of providing proper planning, training and research studies are also reasons behind the unsuccessful Saudisation of the market, experts told the Saudi Gazette.

The Commerce Ministry and municipality is reportedly keeping an eye on expat traders who exploit the absence of monitoring authorities.

Another major issue affecting Saudi entrepreneurs in the market is the rise in rent, which can go up to SR150,000 a year, said shop owner Hatim Al-Sulaimani.

“I never expected such a high rent. It’s not easy for new Saudi traders to pay this exorbitant rent. Shop owners have to meet many other expenses such as license fees and huge electricity bills,” he said.

Expat traders are believed to be selling mobile phones at prices much cheaper than those offered in shops and providing telecom maintenance service from their homes.

Economist Mansour Al-Ghamdi said the Saudisation of the market should have been implemented gradually after conducting the necessary studies.

“It was impossible to replace expats with Saudis all of a sudden. We should have allowed Saudis to work with expats for some time to get the necessary experience and overcome difficulties. The program was a failure in terms of training as well as financial and salary support,” he said.

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