Mobile Subscribers Sector In Saudi Arabia To Expand By 27%

| Nov 2, 2008 | comment Leave a comment

Saudi ArabiaThe mobile subscribers sector in Saudi Arabia will expand by over 27 per cent in 2008, lifting the official mobile penetration rate to 144 per cent, according to Business Monitor International (BMI).

The launch of commercial services by new entrant Saudi Zain is expected to further stimulate the market.

The BMI report, made available to Khaleej Times, noted that according to the Saudi regulator, the number of mobile users in the kingdom had reached 28.4 million at the end of 2007. This was after having grown by over 44 per cent during the year. Mobile penetration at the end of 2007 stood at just over 116 per cent. By the end of March 2008, the number of Saudi mobile subscribers had estimatedly grown to 30.7 million.

“Growth in 2007 was actually stronger than in 2006, and this leads us to believe that much of the sector’s recent growth has been based on the addition of new prepaid users,” it explained.

Meanwhile, regulatory figures indicate that Saudi Arabia had 4 million operational fixed lines at the end of 2007. This is slightly less than the previous estimate of 4.129 million lines. According to the Communications and Information Technology Commission (CITC), the fixed line sector as a whole saw very little growth during 2007; combined with an expanding population, this meant that Saudi Arabia’s fixed-line penetration rate decreased from 16.8 per cent at the end of 2006 to 16.4 per cent by the end of 2007.

Although the number of fixed lines serving business customers increased in 2007, the number of residential lines decreased from 3 million at the end of 2006 to 2.9 million at the end of 2007. The slight decline in residential fixed lines has been attributed to the growth of mobile substitution.

“Our new fixed-line forecast predicts that the Saudi market will see marginal growth over the next five years. However, with evidence that Saudi Telecom Corporation’s (STC) own fixed-line subscriber base may be about to enter a period of decline, growth over the next five years will depend on the ability of the new entrant operators to sign up new customers through bundled offerings,” it said.

In April 2007, Saudi Arabia licensed three new fixed-line operators. One of the three operators, consortium led by Bahrain’s Batelco and Saudi Arabia’s Atheeb Group, intends to launch commercial services before the end of 2008.In 2007, Saudi Arabia’s regulator has suggested that the number of broadband subscribers grew to reach 623,000. Of these, 595,000 (95.5 per cent of the total) were DSL lines.

Although the predominance of DSL is expected to continue in 2008 and the first part of 2009, the deployment of wireless broadband networks by three new national fixed-line consortia will improve choice and help to drive increased broadband growth.

“In 2008, we predict a further 158 per cent increase in the number of broadband connections, during which time we expect the number of broadband connections to rise to around 1.6 million (equivalent to 6.4 per cent penetration),” the report said.

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