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Kuwait Telecommunications Report Q3 2011
Business Monitor International, July 2011, Pages: 85
Business Monitor International's Kuwait Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's telecommunications industry.
BMI's Q311 update on Kuwait's telecommunications market contains latest operational data from market leader Zain and second-ranked Wataniya, which resulted in a slight revision in forecasts for the mobile market. Our fixed-line and internet analysis and forecast remains largely unchanged as latest official data by the Ministry of Communications (MoC) still relates to 2009. Meanwhile, we introduced mobile ARPU forecasts for the Kuwaiti mobile market based on the weighted average of available ARPUs in the mobile market.
After two consecutive quarterly losses in H210, market leader Zain recorded positive growth in Q111, albeit muted with net additions of just 17,000 subscribers. Second-ranked Wataniya recorded its first ever quarterly subscriber net loss during Q111. Wataniya lost 21,000 subscribers or 1.2% of its subscriber base. The slow growth of Kuwait's two biggest mobile operators since mid-2010 supports BMI's view of increasing saturation in the mobile market resulting in slower growth. In future, we expect mobile operators to focus on revenue growth using higher value services. This will largely depend on the roll-out of mobile data networks and the migration of subscribers onto postpaid contracts. Kuwait's three mobile operators are investing significantly in the roll-out of advanced data networks. However, only Zain seems to have succeeded in building a relatively large postpaid subscriber base. Wataniya's postpaid subscriber base contracted considerably between June 2010 and March 2011. Meanwhile, BMI believes third-ranked Viva's subscriber base is mainly prepaid, based on its value-led strategy.
Zain's superior subscriber mix is reflected in its high ARPU, which was US$51 at the end of Q111. notes this is one of the highest in the region. Our maiden
ARPU forecast for the Kuwaiti mobile market is based on the weighted average of ARPUs from Zain and Wataniya, representing about 81.2% of the mobile market by subscribers. While we expect competition between the three mobile operators and the saturating market to increase downward pressure on ARPU, we expect operators to achieve ARPU stability through premium offerings and value-added services.
In June 2011 Kuwait's Ministry of Communications (MoC) urged local internet service providers (ISPs) to reduce their tariffs to boost competition in the sector. Further, the ministry's undersecretary, Abdulmuhsen al-Mazidi, said the MoC intends to resolve internet tariff-related issues soon. However, BMI believes greater competition is required in the internet and broadband sectors. The government revealed in November 2010 that it had suspended the issuance of licences for new internet service providers (ISPs) until a separate telecoms regulator from the MoC could be established in the country. Currently, as we have stated, the interests of the MoC are in conflict as it is the sole provider of fixed line services. An independent regulatory body could be charged with granting licences and setting the relevant standards and conditions required to encourage greater competition.
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