Nationalisation drive sees 50% of Saudi mobile shops up for sale

Companies in the industry must ensure half of their workforce is Saudi by Ramadan and 100 per cent by early September

Around half of Saudi Arabia’s mobile shops are reportedly up for sale and another 20 per cent are shutting down in response to a move to nationalise the sector.

Under new rules announced in March, companies in the industry must ensure half of their workforce is Saudi by Ramadan and 100 per cent by early September.

Read: Saudi mobile industry required to employ 100% Saudis in six months

Saudi Gazette cited Al-Madinah newspaper for the figures and quoted a local shop owner as saying the decision would greatly harm many businesses.

““Saudi employees require salaries 30 per cent higher than their expatriate counterparts. The Ministry of Labour and Social Development wants to Saudise the telecommunication sector by 50 per cent starting Ramadan. The drastic change will be detrimental to many businesses in the sector,” Majed Abdullah said.

He said the ministry had not assessed the situation of retail shops separately from the country’s telecoms companies.

“Telecommunication companies attract Saudi employees by giving benefits such as weekly holidays, high salaries and flexible shifts. Mobile shops are a part of the telecommunication industry but they cannot afford to offer the same benefits as major companies in the sector do,” Abdullah added.

The decision to Saudise the industry has also lead many investors to back away from small businesses, an employee was quoted as saying.

“The minimum wage for a Saudi working in a mobile shop is SAR 4,000 ($1066) while the minimum wage for a non-Saudi is SAR 2,500 ($666). Moreover, most Saudis refuse to work double shifts,” said the employee.

Saudi Gazette quoted a labour ministry spokesperson as saying inspectors were visiting shops throughout the country.

Officials from the ministries of labour and social development, commerce and investment, telecommunications and information technology and municipal and rural affairs will meet regularly to coordinate activities ahead of the 100 per cent Saudisation deadline in September.

Companies and shops found in violation of the directive can be shut down or fined a minimum of SAR 20,000 ($5,332).