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Kuwait Telecommunications Report Q1 2012
Business Monitor International, Feb 2012, Pages: 81
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 VIEW
BMI's Q112 update on Kuwait's telecommunications market contains the latest operational data from mobile market leader Zain and second-ranked Wataniya. It also contains updates to our five-year growth forecasts for the mobile, fixed and internet markets which are extended to 2016 in this quarter's update.
BMI also revised its mobile ARPU forecasts to reflect competition dynamics in the mobile market. Based on market data published by Zain and Wataniya, BMI calculates there were net additions of 81,000 subscribers in Q311 or growth of 1.7% q-o-q to reach 4.777mn subscribers. Zain accounted for the majority of new subscribers with 48.1% market share of total net additions in Q311. BMI estimates Wataniya had market share 27.2% of net additions while Viva had 24.7%.
BMI notes that the Kuwaiti mobile market recorded net additions of about 327,000 subscribers during 9M11 compared to 306,000 during the same period in 2010. This suggests the market is capable of steady growth over the next five years despite a high penetration rate. There is no change to BMI's short-term mobile forecast this quarter. However, BMI's extended forecast show mobile penetration will reach 192.7% by 2016.
Perhaps the biggest development in Kuwait's telecoms market in Q411 was the launch of LTE services in December by third-ranked mobile operator Viva. This follows the launch of similar service by parent company STC in Saudi Arabia. Market leader Zain was the first operator to start LTE network trials in Kuwait. Zain's Saudi unit launched its LTE network in September 2011 and BMI believes the Kuwaiti market will be top on its agenda to limit Viva's first mover advantage.
Meanwhile, Wataniya awarded Chinese equipment vendor Huawei Technologies a contract in October 2011 to deploy an IP-based microwave network with Huawei's OptiX RTN 980. The microwave network will serve as the foundation for an all-IP backhaul network for LTE mobile broadband.
BMI maintain its growth expectations for the fixed-line and internet sectors as there was no new data from the MoC at the time of writing. However, BMI cautions that a combination of continued disconnection of fixed lines because of unpaid bills and increasing fixed-to-mobile substitution poses downside risks to its fixed-line forecast.
For the internet sector, BMI expects mobile broadband access through 3G and now LTE networks to remain the major growth driver for broadband connections. The lingering dispute between the MoC and the country's leading ISPs regarding internet tariffs will also remain a major hindrance to growth in the fixed-line broadband sector.
There were reports in 2011 that the government will aim to establish an independent telecoms regulator by 2012. While there is no official confirmation yet to suggest this, BMI maintains the view that the establishment of an independent regulator and the liberalisation of the fixed-line market are two key factors that should help the fixed-line sector achieve its full growth potential.
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