The Government of the Kingdom of Saudi Arabia considers the provision of communications and information technology to all segments of society as a fundamental element in the Kingdom's development strategy. The telecommunications and information technology sector is a supporting force for the national economy in general, and contributes to social and cultural development, in addition to its role in national development.

Despite significant progress in developing and liberalizing the telecommunications and information technology sector, further efforts are required to generalize its benefits to all residents of the Kingdom of Saudi Arabia ("the Kingdom"). To achieve this goal, the Ministry of Communications and Information Technology (the Ministry) has approved the rules, foundations, and conditions for universal service and the right to universal access (Universal Service Policy and Right to Universal Access, "the Policy").

The Arabic version of this Policy is the official version, and in the event of any discrepancy between it and any translation, the Arabic text shall prevail.

The terms "Right to Universal Access" and "Universal Service" are defined as follows:

• "Right to Universal Access" means the ability for 100% of the population to have the right to use specific telecommunications and information technology services through the availability of public facilities at a reasonable level, at an appropriate price, and with specified quality.

• "Universal Service" means the ability for 100% of the population to subscribe to and use specific telecommunications and information technology services at a reasonable level, on an individual or household basis, with specified quality.

Vision: Expanding comprehensive service and the right to universal access to telecommunications and information technology includes the following:

• Achieving the greatest possible degree of equality and social justice.

• Contributing to national economic, social, and cultural development.

Policy Objectives:

• Achieving the right to universal access to voice telephone service within a period not exceeding three years.

• Achieving comprehensive service for voice telephone service within a period not exceeding five years.

• Achieving the right to universal access to internet service within a period not exceeding five years.

• Achieving comprehensive service for internet service within a period not exceeding seven years.

The specified periods mentioned above shall commence from the date of operation of the Universal Service Fund ("the Fund") as outlined in this policy. The Fund shall define "voice telephone service" and "internet service" as included in the aforementioned objectives. The Fund may consider any available technology when establishing those definitions, and it has the right to amend those definitions in the future to account for technological advancements, such as the availability of affordable broadband technologies and other technologies.

To encourage and implement universal service and the right to universal access in the Kingdom, the following mechanisms will be utilized:

•  Universal Service Fund ("the Fund"): This is an entity that will be established, operated, and managed in accordance with this policy.

•  Selection process in Fund projects through competition ("competition in Fund projects"): This means inviting entities to participate in the competition for a specific project to provide universal service or the right to universal access. The entity selected to fulfill the obligations of the competition in Fund projects ("Fund project service provider") must provide specific networks and/or services to certain residents in a specific geographical area.

The Communications and Information Technology Commission ("the Commission") must take responsibility for coordinating the work of the new mechanisms with the existing and currently available mechanisms for the deployment of universal service and the right to universal access.

The competition mechanism in Fund projects will be the only mechanism that will receive financial support from the Fund. The Fund will be used to provide financial compensation to Fund project service providers.

Under this policy, the Fund will prepare programs and projects as follows:

•  Programs: These are the main initiatives undertaken by the Fund to achieve one or more of the objectives of this policy. The Fund's programs over the coming years will include setting specific goals for the implementation of specific networks (and/or services) in phases, the execution of which depends on the availability of funding, as well as determining the priorities and other criteria established by the Fund to achieve the objectives of this policy.

•  Projects: These are specific sub-activities for any of the Fund's programs. The Fund will prepare detailed planning and financial analyses, among other things, for each of these projects. One or more projects may be implemented simultaneously within a specific program. For example, a project may cover any geographical area, population, or specific service.

The Authority shall issue a decision to establish the fund ("Decision") in accordance with this policy. The Authority must issue this decision within six (6) months from the Ministry's approval of this policy. This decision shall specify the regulatory and procedural nature of the fund and other matters necessary for the fund's operation, including the rules for managing its accounts.

In addition to issuing the decision, the Authority shall, in accordance with its regulations, work on issuing all standards it deems necessary for the implementation of this policy ("Implementation Standards"), including (1) preparing and issuing any decisions, guidelines, mechanisms, or any other documents, and (2) amending any existing mechanism or document, including the implementing regulation.

The decision and the implementation standards must comply with the following general principles:

• 6.1 Nature of the Fund

  • • The primary objective of the fund is to implement this policy.

  • • The fund shall implement this policy transparently, without discrimination, and in a competitive and neutral environment.

  • • The fund shall be independent and separate from all service providers and shall not act as a service provider.

• 6.2 Structure of the Fund

  • • The fund shall be established as part of the Authority.

  • • The fund consists of two entities: the Board of Directors of the Authority ("Council") and the Fund Management.

  • • The Council is the highest authority of the fund, overseeing its management and issuing necessary directives.

  • • The Fund Management shall carry out the daily operations and management of the fund.

  • • The fund shall be managed by an administrative officer ("Director"), who reports directly to the Governor of the Authority and is appointed by the Council in accordance with the requirements of the decision and implementation standards.

  • • The administrative structure of the fund and its other departments shall be formed in accordance with the requirements of the decision and implementation standards.

  • • The powers, responsibilities, procedures, and other matters related to the management of the fund shall be determined in accordance with the requirements of the decision and implementation standards.

• 6.3 Operation of the Fund

  •  The accounts of the fund shall be separate and independent from any other accounts, including the Authority's accounts, and shall be audited at least annually.

  •  The fund shall prepare an annual report on its activities ("Fund Report") and publish it on the Authority's official website.

  •  The Fund Report must include the latest audit of its accounts, details of ongoing projects, and any other matters deemed necessary by the Council.

  •  The Fund Report must include a review of the efficiency of its structure and operational procedures, and other related matters. When the Fund Report recommends changes to its structure and operational procedures, or any other related matters, the Authority may issue a decision to implement the required changes.

  •  The Council shall, from time to time, approve the operational plan of the fund to implement the specified programs and projects included in the plan ("Operational Plan").

  •  The Fund Management shall, from time to time, prepare the operational plan for approval by the Council.

  •  The operational plan includes the administrative costs of the fund as estimated by its management. These costs are funded from its accounts.

  •  The operational plan includes one or more programs and projects.

  •  The operation of the fund shall commence from the date the Council approves the first operational plan.

  •   The Fund Management may identify projects, which may also be proposed by other individuals, to be subsequently presented to the Fund Management.

  •  The fund shall award all its projects through a competitive mechanism for the fund's projects.

• 6.4 Funding of the Fund

  •  The fund shall be primarily funded in accordance with the Authority's regulations from the fees collected from the new financial charges that will be implemented under the decision ("Fund Fees") and deposited in the fund's accounts. This will be effective from the date the fund commences operations.

  •  The fund fees shall be calculated, implemented, paid, collected, and managed in accordance with the requirements of the decision and implementation standards.

  •  The Authority shall determine the service providers required to participate in funding the fund, in accordance with the requirements of the decision and implementation standards.

  •  A percentage of 1% of the net revenues of the relevant service providers shall be allocated to fund the fund, in accordance with the requirements of the decision and implementation standards.

  •  In addition to the fund fees, the fund may receive funding from other sources, including government contributions.

  •  The fund retains the difference between the amount it collects or receives and the amount actually spent under any operational plan, to fund future operational plans.

• 6.5 Fund Expenses

  •  The financial funding provided by the fund to the service provider for the fund's projects is a one-time financial grant. The amount of funding granted by the fund shall be determined as part of the competitive process for its projects.

  •  The maximum amount of funding for each project shall be proposed by the Fund Management and included in the operational plan approved by the Council. The Fund Management shall calculate the maximum amount of one-time funding based on the estimated net cost determined in accordance with the requirements of the decision and implementation standards.

  •  The fund uses a competitive process in its projects to select service providers for the fund's projects. It will establish the rules to be followed in these processes, as well as evaluate the proposals submitted by the parties invited to participate in the competitive process according to these rules.

  •  Proposals will be accepted if it is proven to the fund that the submitting party: (1) meets the specified qualification criteria set by the fund and (2) requests funding that does not exceed the maximum funding amount. When both conditions are met, the applicant will be eligible for the competitive process to select the service provider for the fund's projects.

  •  The fund may disburse the funding amount in one or more installments, to align with the achievement stages determined by the fund.

  •  The fund may request an initial guarantee and/or a final guarantee to ensure good performance from the parties participating in the competitive process.

The Authority must review this policy after its approval and on a regular basis. This review shall take place at least once every two years from the date of the fund's operation.

The Authority shall take into consideration matters including (1) economic, social, cultural, and technological developments, (2) the extent of the expansion of universal service provision and the right to comprehensive use in the Kingdom, and (3) any other matters deemed appropriate by the Authority. Upon completion of the review procedures, the Authority shall prepare and submit a revised proposal regarding the policy to the Ministry for approval.