New telecommunications & info know-how regulation in Saudi Arabia : Clyde & Co

Saudi Arabia has up to date its regulatory regime for telecommunications with the issuance of a brand new Telecommunications and Info Expertise Act. This text considers the brand new options launched by this laws and the way its broader give attention to innovation and rising applied sciences may assist the digital transformation agenda within the Kingdom.

The Telecommunications and Info Expertise Act enacted by Royal Decree No. M/106 dated 02/11/1443H (equal to 1 June 2022) (the Act) was printed within the Saudi Official Gazette on 10 June 2022 and can take impact on 7 December 2022. The Act will repeal the Telecommunications Regulation enacted by Royal Decree No. M/12 dated 12/03/1422H (4 June 2001) (the Outdated Regulation), broadening the scope and focus from telecommunications to incorporate new types of know-how and digital companies.

The Act might be supplemented by extra laws which can be to be issued inside 180 days from the date of the publication of the Act within the Official Gazette (the Guidelines). The Guidelines will enter into pressure similtaneously the Act and we anticipate that they are going to have an analogous operate to the present Bylaws below the Outdated Regulation, which set up the idea of the present licensing regime and key obligations on licensed operators.

The Saudi Communications & Info Expertise Fee (CITC) will stay the first authority liable for overseeing and implementing the Act.

New options

The Act has broadened the scope of utility from purely telecommunications companies below the Outdated Regulation to a spread of ICT actions and companies. The Act now regulates rising applied sciences with a selected give attention to selling digital transformation in Saudi Arabia and inspiring innovation, entrepreneurship, analysis and technical growth.

The definition of telecommunications is broadened to recognise machine-to-machine communication methods and equipment. The Act additionally defines info know-how in broad phrases to incorporate “applied sciences, software program, methods, networks and any associated processes for creating, compiling, securing, processing, storing or analysing knowledge or info, together with telecommunications and data know-how functions.” This brings a spread of digital service suppliers throughout the scope of the brand new regime.

Goals and aims

The Act has clearly acknowledged goals to develop and promote digital transformation in Saudi Arabia and improve the companies supplied throughout the ICT subject.

There’s a robust theme of innovation by entrepreneurship and analysis that’s meant to assist develop this subject throughout the Kingdom. There may be additionally particular reference to encouraging the event of rising applied sciences, that are outlined as technological improvements representing a progressive step in a sure subject and attaining a aggressive profit over the prevailing applied sciences. That is in line with the Kingdom’s wider plans to develop a digital economic system, which is additional evidenced by expressly acknowledged goals within the Act to “switch and localise” know-how and develop the native content material share.

Encouraging competitors

As per the Outdated Regulation, the Act stipulates that service suppliers are liable for implementing correct costs for ICT companies and that controlling service suppliers (i.e. these with greater than 40% of the related market) should meet interconnection or accessibility requests on honest phrases and at honest costs primarily based on CITC-approved prices.

Mergers between service suppliers (within the Kingdom or overseas) or the acquisition of greater than 5% of shares or shares in any licensed service supplier are topic to prior approval from the CITC Board.

The Act additionally prohibits controlling service suppliers from abusing their dominant place and the Guidelines are anticipated to element additional anti-competitive practices which can be prohibited.

Licensing, registration and authorisation

Licences at the moment are required not only for the availability of telecommunications companies but additionally for utilizing telecommunications networks for these functions. This means the potential regulation of “over-the-top” companies that present telecommunications performance.

Different licensable actions embody offering infrastructure companies to public telecommunications networks, utilizing any numbering useful resource or frequency spectrum and offering Saudi domains registration companies or establishing centres for its registration. Additional particulars of the licence necessities might be set out within the Guidelines.

Along with the licensing regime, the Act additionally references different kinds of approval within the type of registration or authorisation. The Act states that the CITC Board might require a licence, registration or authorisation for the availability of particular companies regarding telecommunications or info know-how (together with digital content material platforms), possessing or utilizing ICT units and creating particular telecommunications community. This enables for CITC to manage present, rising or future applied sciences by the use of subsequent guidelines or selections.

As per the Outdated Regulation, the CITC Board has the flexibility to cancel, droop or modify any licence registration. Nevertheless, this choice ought to be primarily based on a reasoned floor or following a change in market situations.

Lastly, the Act revises the provisions for project of a licence. It requires the CITC’s approval to be obtained earlier than making any materials change of possession of a licensee or registered supplier. The CITC should problem its choice inside 90 days following the lodging of an utility, in any other case the appliance might be deemed profitable. The Act doesn’t outline what constitutes a fabric change and it’s anticipated that additional readability might be supplied within the Guidelines.

Knowledge safety and cybersecurity

A notable addition to the Act is a chapter on the safety of consumer knowledge and confidential paperwork. This follows current developments in Saudi Arabia that included the issuance of the Kingdom’s first private knowledge safety regulation in late 2021. The Act requires service suppliers to adjust to the provisions of the brand new Private Knowledge Safety Regulation when utilizing, controlling or processing any consumer’s private knowledge.

The Act requires service suppliers to take all the required steps and precautions to make sure the safety and confidentiality of customers’ private info and paperwork. Person knowledge can’t be disclosed with out the consent of the consumer. Phone communications or info disclosed over public communication networks are expressly acknowledged to be confidential and will not be accessed, considered or recorded until required by regulation.

Service suppliers even have an obligation to inform customers and the CITC within the case of a breach of the consumer’s private knowledge or paperwork and to take the suitable measures to guard private knowledge.

The Act specifies that CITC will make sure the safety of cybersecurity and demanding infrastructure (outlined as networks and IT units whose gear may completely or partially disrupt or impair the soundness or safety of the sector) by complying with the choices issued by the Nationwide Cybersecurity Authority (NCA). The Act additionally notes that the CITC will assess the cybersecurity degree of every service supplier to make sure that the safety is satisfactory in accordance with the degrees anticipated by the NCA.

Offences and sanctions

The core offence of offering telecommunications companies or establishing a public telecommunications community and not using a licence is essentially broadened to cowl the finishing up of any of the actions requiring licensing, registration or authorisation below the brand new regime (see ‘Licensing, registration and authorisation’ above). As well as, the Act now creates a wider offence in relation to the possession, sale, leasing, making obtainable, manufacturing, manufacturing or buying and selling in any gear, companies or software program that doesn’t match the required technical specs and requirements or doesn’t in any other case adjust to the principles, controls and necessities set out by CITC.

Sanctions which may be imposed embody a tremendous of as much as SAR 25,000,000 (US$ 6,657,500), which is in line with the Outdated Regulation. In addition to related rights for the CITC to droop the companies of any operator that violates their licensing situations, the Act additionally expressly references the full or partial blocking of digital content material platforms and the CITC is empowered to supply technical assist with implementing ultimate courtroom judgments in opposition to digital platform service suppliers.


The Act introduces new ideas and has considerably broadened the core mandate of CITC below the Outdated Regulation to incorporate suppliers of digital infrastructure and companies along with telecommunications community operators. Companies working on this area ought to take steps to evaluate the appliance of the Act, together with any licensing, registration or authorisation necessities.

Whereas the Act has a give attention to innovation and growth of the native ICT sector, this might be topic to the framework of regulation and governance set out within the Act and the Guidelines.

The Act doesn’t immediately deal with particular applied sciences or points resembling cryptocurrency, NFTs, synthetic intelligence or the metaverse. Nevertheless, the Guidelines or future selections below the Act might introduce particular regulation in these areas.

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