JEDDAH, 7 July — The rush to buy prepaid chips from Saudi Telecom has caused long and frequently frustrated queues to develop at the STC offices. Waits of up to five days have been reported. One respondent said that as few as 30 chips a day were being issued at one office in Jeddah.

An important side effect of the increase in mobile telephony is the economic effect it is having on a well-established branch of the communications industry in the Kingdom.

Call cabins, a popular way for expatriate workers to call home, have been affected by the issue of prepaid mobile telephone chips. Groups of expatriate workers now club together and, using a prepaid mobile telephone, access the discounted STC overnight rate. The discount rates from call cabins cannot compete with this and business has declined.

The initial blow to the call cabin business was the prepaid discount card available from a number of competing companies, allowed landline subscribers to make international calls from landlines with no zero access number. This gave subscribers the double benefit of the STC discount and the greater convenience of calling from home rather than going to the call cabin.

The second setback to the call cabin business was the Boraq card. With this card, discounted international calls could be made from any public telephone. The STC discount was greater than that offered by call cabins and as a result, was very attractive to card holders.

As a response to the demand by STC for a deposit of SR2,500 for landline subscribers to have a zero number accessible from their telephone, many subscribers are opting for the prepaid cards.

Fortunately, the deposit scheme was so badly received by the public that , on June 26, STC announced it would scrap it. Instead, they would impose a credit limit of SR500.

Prepaid chips for mobile phones added one more difficulty for the call cabin trade. Rates were very competitive and making calls was convenient. There seems to be no consistent overall policy over the sale of telephone communications by STC. From the reactions of users of the several options available, the cheapest option is the most attractive option.

One of the side effects is to damage the call cabin trade, one often employing Saudi nationals. Does this signal the end of a well-established industry in the face of ever easier and more accessible communications?

Is now the time for the removal of the STC monopoly on telephone communications in the Kingdom allowing the development of new enterprises to utilize the Saudis who own and run the call cabins?

Clearly, mobile communications are here to stay and with the third generation of mobile phone technology about to reach the Kingdom, there will never be a better time to expand the communications industry in Saudi Arabia and create the jobs that necessarily accompany it.