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Saudi Arabia Telecommunications Report Q2 2011
Business Monitor International, April 2011, Pages: 77
Business Monitor International's Saudi Arabia Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Saudi Arabia's telecommunications industry.
At the end of 2010 there were 51.6mn subscribers in the Saudi mobile market, as there were twice as many net additions in Q410 as any other quarter of the year. The penetration rate is now almost 200%, marking Saudi Arabia out as the market continues to grow. BMI does not expect this strong growth to continue and there will be a considerable decline in growth over the remainder of the forecast period to 2015.
Saudi Arabia's highly developed market means operators are targeting revenue growth through mobile content and mobile broadband. The latter service, in BMI's opinion, is particularly suited to Saudi Arabia, allowing for rapid roll-outs across the country, particularly where the terrain is less than hospitable. BMI expects mobile broadband to boost 3G connections and the wider broadband market, bringing more of the population online.
Increasingly, Saudi subscribers will aim to upgrade their existing connections from 2G to 3G, providing real growth in the market. For operators, this creates an opportunity to boost revenues by encouraging greater data usage and the abundance of smartphones available in the market will drive this. At the time of writing, questions remained over the future ownership of third-ranked Zain KSA, which was to be sold as the UAE's Etisalat – owner of second-ranked Mobily – aimed to buy the operations of Zain's parent company across the region. The Zain Group accepted a non-binding joint offer from Bahrain's incumbent Batelco and local investment firm Kingdom Holding. This would pave the way for the Etisalat-Zain deal to go ahead. However, the future of this deal is still unclear and Zain KSA's ownership may therefore not change.
In the fixed-line market, BMI expects subscriber numbers to continue to rise slowly, as Saudis choose mobility over fixed services. By the end of the forecast period in 2015 the penetration rate will have declined, to more than 15%. The rate of growth will be so slow that population growth will overtake it, pushing down the penetration. Fixed-line service providers will increasingly rely on broadband to drive revenues in future, catering to subscriber demand for internet and data services. Meanwhile, unrest in the region continues to weigh on the outlook for political and economic stability. Although Saudi Arabia remained largely unscathed, the risks to the outlook have been elevated by disquiet in neighbouring markets.
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