1 Feb 2010

Saudi’s dynamic telecom market encouraged by government initiatives to increase competition and attract foreign investment

2010 starts in a positive note in the Middle East’s telecoms market. A few weeks ago, the IMF announced it was expecting economic growth of close to 4% in the region, boosted by recovery in commodity prices, and at last week’s ITU meeting for the Arab States, GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) fared well in a report on ICT development and growth opportunities.
More particularly, the Saudi market stands out in terms of its market conditions and of the challenges it has to face in the development of its ICT sector.
Despite a relatively high GDP per capita and a large, young population, the telecommunications market had a late start in the kingdom, partly because of its geographical conditions, as vast desert areas and a tough climate make it difficult for infrastructure projects to be viable. Market liberalisation was relatively late too, with second mobile operator Zain launching in 2005 to compete against incumbent STC, and 3rd operator Mobily in 2006.
However in the last few years, the situation has changed and growth opportunities are very encouraging:
- Mobile penetration has boomed to reach well over saturation level
- The fixed–line market is growing: market leader STC is followed by new entrant Atheeb (GO), and possible new launches from PCCW and Verizon
- Mobile broadband is picking up quickly and making up for the relative lack of fixed-line infrastructure, with Mobily leading the market and claiming 100% growth in 6 months in 2009
- WiMAX technology has been being deployed by operators Bayanat Al Oula (now part of Mobily) and ITC
- Competition is due to increase with the possible introduction of MVNOs before the end of 2010.
This dynamism is due in large part to the work of the CITC which, according to the ITU, is one of the most advanced telecoms regulators in the region. It is a crucial part in the Ministry of Communications and Information Technology (MCIT)’s plan for ICT sector development launched in 2005. The plan set targets for the creation of a knowledge-based society, comprising among other objectives: e-Government initiatives, encouraging competition in the telecoms sector, increasing PC and internet penetration and raising foreign investment in ICT projects.
One way of raising foreign investments can be found in the project of Economic Cities, new towns built on Saudi soil to attract businesses and diversify the economy away from oil, with the view of contributing $ 150B to Kingdom's GDP. Economic cities are meant to deliver state-of-the art infrastructure and processes to redefine and showcase new standards around the world. Emaar (the property developer) must offer unparalleled technology with most advanced internet and broadband services for both residential and business customers.
The fact that government targets put foreign investment as a priority is good news not only for the local market, but also for the international investors. Indeed the Kingdom has had a reputation of a difficult market to enter, as the working culture can sometimes be difficult to grasp for newcomers.
That is why Informa Telecoms & Media is launching Saudi Com, a new event in the Com World Series designed to bring together operators, investors and vendors to look at the specific opportunities in the Saudi telecoms market. Already confirmed speakers include: Dr Ahmed Sindi (CEO, Atheeb/GO), Hamoud Al-Kussayer (VP Regulatory Affairs, STC), Jameel Al Molhem (VP Personal Services, STC), Gert Reider (Chief Executive Bahrain, Batelco), Alaa Malki (Director – Mobile Radio Network Planning and Design, Mobily), Rasheed Shaksheer (Director, Key Projects, Mobily), Mohammed Al Hashili (CEO, Mazoon Mobile), Ahmad Abu Zannad (Head of Consumer Segments, Zain KSA), Abdulrahman Obaied (Marketing Director, Awalnet). The event will take place in Bahrain, an easy-to-reach desitnation and popular leisure destination for Saudi nationals.

2 comments:

  1. "- Competition is due to increase with the possible introduction of MVNOs before the end of 2010."

    Is this only a rumor or a news from trusted source in CITC?

    ReplyDelete
  2. Consumer will mostly benefit if there will be more competition among the supplier.

    ReplyDelete