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As the mobile market heats up, Saudi operators are looking to convergence in search of a competitive edge, according to a new report from Pyramid Research
Saudi Arabia: Mobile Competition Heats Up offers a precise profile of the country's telecommunications, media, and technology sectors based on proprietary data from Pyramid’s research in the market. It provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies.
Thanks to the regulator's consistent effort and determination to promote competition and development in the telecom sector, a market that was a monopoly in early 2005 now has four active players in the mobile sector and three licensees in the fixed sector. "Pyramid expects the market to grow from $11.3 billion in 2009 to $14.3 billion in 2015, fueled mostly by growth in mobile data as all three GSM operators have launched 3G services," says Hussam Barhoush, Senior Analyst at Pyramid.
"The next five years will see further price cuts on mobile voice services due to additional competition, but these cuts will be largely compensated for by a dramatic rise in mobile data usage. We are projecting mobile data to grow at a 2010-2015 CAGR of 17 percent, to reach $2.9 billion in 2015," notes Barhoush. "We expect the number of mobile subscriptions to grow at a CAGR of 4 percent, from about 42.5 million forecast in 2010 to more than 51.8 million in 2015. However, Saudi Arabia's comparatively low user penetration rate – only 77 percent in 2009, placed in contrast to its subscription penetration of 146 percent – further demonstrates the market's potential for more growth," he adds.
In 2009, 42 percent of handsets in Saudi Arabia were 3G-enabled, and we expect that share to reach 79 percent by 2015. "We expect the introduction of 4G in 2011, as all three GSM players conducted LTE trials in 2009 and 2010. Due to the popularity of mobile broadband, we expect all three mobile operators to roll out LTE networks in the long term and for adoption to be comparatively rapid," indicates Barhoush.
To help differentiate themselves, operators are looking toward convergence to give them an edge. "The two biggest operators, STC and Mobily, already have networks and licenses permitting them to offer both fixed and mobile services and are looking to convergence, both as a cost-saving mechanism and as a way to gain a competitive edge," notes Barhoush.
Saudi Arabia: Mobile Competition Heats Up is part of Pyramid Research's Africa/Middle East Country Intelligence Report Series.