Expats blamed for failings of Saudi mobile market Saudisation

The failings of last year’s Saudisation drive in Saudi Arabia’s mobile sector are being blamed on a lack of preparation and expats still illegally involved in the industry.

Saudi Gazette reports that citizens have asked the country’s commerce ministry to be on the lookout for expat traders that offer mobile handsets are reduced prices.

Others point to rising rents and other costs as detrimental to Saudis looking to enter the sector.

“Rise in rent is another major issue that has affected Saudi entrepreneurs,” mobile shop owner Hatim Al-Sulaimani told the publication. “Some realtors charge SAR150,000 ($40,000) per year.

“It’s not easy for new Saudi traders to pay this exorbitant rent.”

He said owners also have to pay licence fees and “huge” electricity bills on top of competing with expats providing mobile maintenance services from their homes.

Economist Mansour Al-Ghamdi told the publication the Saudisation initiative should have been implemented more gradually and after conducting feasibility studies.

Under the timeline announced in March last year, shops owners were given just three months to make sure 50 per cent of their staff were Saudi.

Following this, 100 per cent of staff were required to be Saudi by early September.

Thousands of mobile shops have shut in the kingdom since the new rules were introduced, with many owners either choosing to close down due to increasing costs and a lack of trained Saudi staff or being found in violation of the rules by inspectors

Read: Another 1,000 Saudi mobile shops shut from Sept-Nov

“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,” Al-Ghamdi was quoted as saying.