Saudi telecom market revenue to touch $19 bn

Saudi girls with smartphones
The Saudi Arabia telecom market is expected to achieve $18.8 billion revenue in 2016, showing an increase over 2015, according to recent analyst reports.

Saudi Arabia has a population of 30.8 million and has $1.6 trillion economy.

Saudi Arabia, sporting the largest telecom sector in Middle East in value as well as volume, accounts for more than half of the market share in GCC. Telecom sector contributed quite less to the national GDP in the last few years, says a report from Ken Research.

The telecom market dormant until 2000 saw growth after 2000, primarily due to the liberalization of the market in 2003.

The fixed-line, internet and mobile communication market is shifting from Government monopoly to liberalization in Saudi Arabia, with three MVNOs licenses being put up for auction recently.

The voice market has touched maturity with high mobile penetration, while the data segment is seeing growth, driven by the young and tech-craving demography along with high usage of smart devices.

Telecom network operators are making investment in LTE, LTE-A and fibre to enable additional revenue streams including IoT, cloud services and M2M services to keep up with the stiff competition.

Limelight is on enterprise services to offer profitable opportunities to these operators, owing to strong macroeconomic performance coupled with demand for operational efficiency.

Also, focus on enterprise segment and mobile network enhancement is believed to be future growth trends for Saudi Arabia.

Liberalization in 2003, with the introduction of MVNOs, and reduction in MTRS has led to a competitive telecom sector in Saudi Arabia.

Top telecoms are STC, Mobily, Zain KSA, CITC, Virgin Mobile, Lebara and Go Telecom.

STC is at the top with international presence in eleven countries with rapidly growing data and enterprise segment followed by Mobily, and Zain KSA.

Increasing competition has led to tariff cuts, affecting the profits adversely. Hence, they have turned to exploring additional revenue streams.

With Saudi Arabian market showing performance in terms of both value and volume growth the telecommunications market in Saudi Arabia is expected to see service revenue increasing on an annual basis from this year on.

Mobile and fixed data segments will contribute the most by 2020, leading to growth in the market.

Mobile data revenue will result in an even greater proportion of total telecom revenue in 2020, suggest reports.

Investments in network infrastructure and venturing into enterprise-focused services such as IoT/M2M and cloud computing are expected for the coming years.

High demand for smartphones and high-speed networks backed by govt. policies aimed at developing the ICT industry, will act as triggers for market growth.

At the Arabnet Riyadh 2015 tech conference in mid December last year, the Saudi Arabian government announced investment plans worth $133 million in ICT, with focus on startup branding, crowdfunding, IoT, and adapting apps to Amazon Web Services and Microsoft Azure.

Vina Krishnan
[email protected]