Telecom Lead India: After a slight decline in 2011, telecoms revenue in the Middle East and North Africa (MENA) is expected to grow by 27 percent between 2012 and 2017, at a compound annual growth rate (CAGR) of 5 percent, says Analysys Mason.
The Middle East and North Africa telecoms market: trends and forecasts 2012–2017 report says revenue will increase from USD70.3 billion in 2011 to USD96.4 billion in 2017.
The report predicts that the number of 2G connections will peak in 2015, at which point 3G and 4G connections will start to take over. Specifically, 3G will be the dominant network technology, reaching 192 million SIMs (43 percent of all SIMs in the region) by 2017.
Even though 4G connections will grow at a CAGR of 122 percent between 2012 and 2017, 4G will only account for 10 percent of SIMs by 2017, and will not launch in Egypt until 2013 and Morocco in 2014.
The fastest growth area during the forecast period will be mobile data services, with handset data revenue set to grow at a CAGR of 17.9 percent between 2012 and 2017. However, growth rates in subscriber numbers will continue to decline, as will mobile voice prices.
The penetration rates of active SIMs in Morocco, Saudi Arabia and the United Arab Emirates (UAE) already exceed 100 percent of the population, and will surpass 100 percent in Algeria in 2012 and Egypt in 2014.
The report argues that any new subscribers will have low incomes and usage, and are therefore very likely to chase deals. Operators in the region will be increasingly pressured to reduce their mobile voice tariffs in the face of over-the-top voice and messaging services.
Average revenue per user (ARPU) within the region generally correlates to GDP per capita. UAE has the second-highest GDP per capita, and the highest ARPU (USD37 per month in 2011), which is nearly three times the regional average. The ARPU in the lowest-income country, Egypt, is lower than half the average (at USD5.5 in 2011).
ARPU has declined from USD15.3 per month in 2009 to USD12.5 in 2011, according to Roz Roseboro, Principal Analyst for The Middle East and Africa research program. “This decline will level off towards 2017, when it will be USD11.0 in 2016 and USD10.9 in 2017.”
The number of broadband connections grew strongly between 2009 (15 million) and 2011 (28 million), and the report predicts that the number of connections will nearly double again by 2017. Of these, 69 percent will be mobile-based.
Mobile will continue to dominate the voice market in MENA because of limited fixed infrastructure, as well as the geography and demographics of the region. In 2009, 82 percent of voice connections were mobile, increasing to 86 percent by 2011. This will grow further to 91 percent by 2017.
Fixed traffic declined at a CAGR of –4.3 percent from 2008 to 2011 and will continue to decline at a CAGR of –2.4 percent from 2012 to 2017. In contrast, the volume of mobile voice traffic grew at an average of 19 percent per year between 2008 and 2011, and will continue growing at a CAGR of 5.8 percent in the next 5 years.
By 2017, 87 percent of traffic will be mobile-originated, compared to 79 percent in 2011, the report said.