Saudi Arabia: Mobile Network Upgrades, Fiber Expansion and Digital Transformation to Remain Key Focus Areas for Operators
Summary
In 2017, Saudi Arabia is expected to generate telecom service revenue of US$17.1bn (equivalent to 2.5% of nominal GDP), only a -1.5% drop over 2016, as the market gradually recovers from the -6.5% decline registered in 2016, owing to disconnection of unregistered users and MTR cuts. Mobile voice is the largest revenue-contributing segment, accounting for 38.4% of total service revenue in 2017. Mobile data will be the fastest-growing segment, presenting a CAGR of 10.5% over 2017-2022 owing to growing consumption of data-intensive services and rising investments in LTE networks.
It is expected that overall service revenue to grow at a CAGR of 4.2% during 2017-2022 to reach $21.0bn. Growth will be driven by data services given the increasing adoption of 4G, FTTH and the popularity of OTT services. Mobile voice and data segments together will account for 76.1% of total revenue in 2017. Fixed voice and Internet segments will account for a combined 22.3%, while pay-TV will hold the remaining 1.6% share in 2017.
Total fixed access lines in Saudi Arabia will continue to grow from 7.1m in 2017 to 8.9m in 2022, owing to robust growth in FTTH/B (24.6% CAGR) and FWA (28.5% CAGR) lines. Though DSL is still expected to be the most adopted broadband technology (24.0% of total access lines) in 2017, its share will decline to 21.2% by 2022, as adoption of FWA (mainly supported by fixed LTE connections) and FTTH/B continues to rise.
The top two operators, STC and Mobily, are expected to generate together 75.2% of total telecom service revenue in Saudi Arabia in 2017. STC will continue to dominate the Saudi telecom market through 2022 with a focus on improving network speeds, connectivity and digital services. It is expected that 3G subscriptions to witness a -12.2% CAGR decline between 2017 and 2022 to reach 14.8m or 22.7% of total mobile subscriptions by 2022 compared with 28.4m in 2017. The decline will result from the increasing adoption of LTE services, which are expected to reach 49.0m or 75.1% of total mobile subscriptions by year-end 2022.
Over the next five years, operators can benefit from the opportunities existing in offering tailored ICT enterprise services (e.g., vertical-specific cloud and M2M/IoT services) to support the private sector’s and government’s digital transformation. Furthermore, continued focus on launching high-volume data plans, data-intensive services (e.g., OTT video) and innovative digital services (e.g., taxi sharing, e/m-commerce) can help operators better monetize their broadband infrastructure investments.
The report “Saudi Arabia: Mobile Network Upgrades, Fiber Expansion and Digital Transformation to Remain Key Focus Areas for Operators” provides an executive-level overview of the telecommunications market in Saudi Arabia today, with detailed forecasts of key indicators up to 2022.
In depth, this report provides the following analysis –
– Regional context: Telecom market size and trends in Saudi Arabia compared with other countries in the region.
– Economic, demographic and political context in Saudi Arabia.
– The regulatory environment and trends: A review of the regulatory setting and agenda for the next 18-24 months as well as relevant developments pertaining to spectrum licensing, national broadband plans, number portability and more.
– A demand profile: Analysis as well as historical figures and forecasts of service revenue from the fixed telephony, broadband, mobile voice, mobile data and pay-TV markets.
– Service evolution: A look at changes in the breakdown of overall revenue between the fixed and mobile sectors and between voice, data and video from 2017 to 2022.
– The competitive landscape: An examination of key trends in competition and in the performance, revenue market shares and expected moves of service providers over the next 18-24 months.
– In-depth sector analysis of fixed telephony, broadband, mobile voice, mobile data and pay-TV services: A quantitative analysis of service adoption trends by network technology and by operator, as well as of average revenue per line/subscription and service revenue through the end of the forecast period.
Companies mentioned in this report: STC, Mobily, Zain KSA, Go Telecom, Virgin Mobile, Lebara, beIN Sports, ITC.
Scope
– The overall telecom service revenue in Saudi Arabia will grow at a CAGR of 4.2% during 2017-2022, mainly driven by growth in mobile data and fixed broadband segments
– Mobile revenue will account for 76.1% of total telecom revenue in 2022; mobile data will witness a CAGR of 10.5% during 2017-2022.
– The top two operators, STC and Mobily will account for 75.2% share of overall service revenue in 2017. We expect competition to intensify after Mobily and Zain acquired unified license from the regulator.
– Government plans for the country’s digital transformation and supporting ICT infrastructure and platforms development will support telecom growth in KSA.
Reasons to buy
– This Country Intelligence Report offers a thorough, forward-looking analysis of Saudi Arabia’s telecommunications markets, service providers and key opportunities in a concise format to help executives build proactive and profitable growth strategies.
– Accompanying GlobalData’s Forecast products, the report examines the assumptions and drivers behind ongoing and upcoming trends in Saudi Arabia’s mobile communications, fixed telephony, broadband markets, and pay-TV, including the evolution of service provider market shares.
– With more than 20 charts and tables, the report is designed for an executive-level audience, boasting presentation quality.
– The report provides an easily digestible market assessment for decision-makers built around in-depth information gathered from local market players, which enables executives to quickly get up to speed with the current and emerging trends in Saudi Arabia’s telecommunications markets.
– The broad perspective of the report coupled with comprehensive, actionable detail will help operators, equipment vendors and other telecom industry players succeed in the challenging telecommunications market in Saudi Arabia.