Bloomberg consensus estimates) vs. STC at 17% (consensus). It is thus arguably crucial for Zain and Mobily to be allowed to increase market share in the mobile arena. We thus believe the regulator (CITC) regulator will have to consider further steps to afford market share to the second and third entrants including asymmetric competition measures (pricing, MTRs), license extensions or differentiated royalty rates. STC the likely beneficiary of FTTH expansion Whilst we argue that STC could lose further market share in the Mobile market as a result of regulatory moves, we believe the negative impact will be offset by growing revenues from FTTH, IPTV and the corporate market. Indeed, we believe STC, given its market leading FTTH network and IPTV offering, will likely benefit most acutely from the growth in the number of FTTH customers. Furthermore, with government grants likely to be provided for FTTH roll out in less economical areas (as part of the NTP), we believe returns will likely not suffer from the additional capital deployment. Mobily could also benefit (given its well-developed FTTH infrastructure), although we expect it to lag STC who has a first mover advantage and arguably a stronger FTTH/Triple play offering. We note, Zain KSA will unlikely participate in the rollout of the FTTH expansion given its constrained balance sheet and strategic focus on the wireless market. That said, the company could benefit from the rollout of high speed internet solutions over its wireless network (ie fixed broadband over its 4G network), particularly in areas where the construction of FTTH networks maybe be difficult or uneconomical. Royalty rate increases unlikely, particularly for Zain KSA and Mobily Admittedly, an increase in royalties could be an easy way of raising much needed revenues for the government. After all, each 1% increase could raise income by more approximately SAR500mn (cUS$130mn). However, we would argue that this is unlikely given the lack of sufficient c