Telecom Lead Middle East: Saudi Telecom (STC) is planning
to connect 500,000 homes in the Kingdom with optical fiber for broadband.
Saudi Arabia had 1.95 million fixed broadband
subscriptions in 2011. Out of this, 18,500 are high-speed fiber-to-the-home
With FTTH, we’re looking to pass 500,000 homes by the
end of this year and go up to 2 million in 2013,” said Jameel Al-Molhem, chief
executive for Saudi Arabia, Saudi Telecom.
Lack of spectrum is limiting the adoption of
next-generation mobile services.
Slumping margins on voice calls have prompted STC and
Mobily and Zain Saudi to bet on broadband to bolster income.
STC’s first-quarter profit rose 60 percent, while its
mobile broadband revenue was up 145 percent, according to Bahrain’s Securities
& Investment Co. (SICO).
Only 41 percent of Saudis are using the Internet at the
end of 2010, according the International Telecommunications Union’s most recent
This relatively low penetration, which is barely half
that of the UAE, is partly due to a lack of fixed-line infrastructure in the
vast kingdom that is more than twice the size of France and Germany combined.
Telecoms operators want to roll out LTE mobile networks,
which potentially offer twice the Internet speeds of 3G, to help fill this
void, although they are being hampered by a lack of spectrum.
You cannot do a big bang on LTE without having the right
frequencies. The frequency situation in Saudi is also putting the brakes on the
potential … to see real money coming from LTE. If you want to connect rural
and small cities and to be profitable also, then LTE is something you can use,”
Informa estimates there were only an estimated 12,500 LTE
users in Saudi Arabia at March-end.
Saudi Arabia’s mobile operators were unable to launch LTE
using their preferred frequency, so they had to reallocate frequencies that
were meant to be for other services, according to a Reuters report.