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This report provides a comprehensive overview of trends and developments in the vibrant mobile broadband sector of the Middle East and includes insights into the supporting telecoms infrastructure. Included in the report are the following countries: Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates and Yemen. The report analyses and provides statistics for the Middle East mobile broadband sector.
Mobile broadband in the Middle East offers a diverse mix of opportunities and challenges
The Middle East mobile broadband market offers a diverse mix of opportunity and challenges due to the many variances between the different countries which make up this vibrant region. Many countries have reached mobile saturation and this combined with infrastructure improvements such as LTE 4G roll-outs creates opportunity for mobile broadband growth in these markets.
The United Arab Emirates has a well established mobile sector, with mobile penetration among the highest in the world, largely due to the country’s affluence as well as to a significantly sized and fluid population of expatriate workers. Often, consumers own more than one SIM card to take advantage of promotional offers.
Etisalat and du have both deployed sophisticated HSPA+ and LTE networks that cover more than 88% of the population, underpinning growth opportunities centred on mobile broadband, content and applications. Smart phones are becoming increasingly popular, accounting for close to two thirds of the country’s mobile handsets.
Kuwait also has a very high mobile penetration and represents a bright spot amongst a region marred by civil tension. The mobile operators in Kuwait are forging ahead and developing both infrastructure and services, with the three major operators of Zain Kuwait, VIVA and Ooredoo all offering LTE services and also deploying or exploring LTE-A services. This has created an environment where mobile broadband has become a feasible proposition with all three mobile network operators offering mobile broadband services.
Mobile broadband subscriptions outnumber fixed broadband subscriptions by a long way in Saudi Arabia, which reflects the country’s large household size. While fixed broadband normally serves the home, mobile broadband subscriptions are individual. Therefore, mobile broadband subscriptions are likely to continue growing beyond the 100% per capita penetration threshold due to some users having more than one mobile connected device.
Iraq’s telecommunications sector began on a positive note in 2015 with the roll-out of 3G services by three operators – Zain Iraq, Asiacell and Korek Telecom. Prior to the current civil tension there was also a progressive fibre optic deployment occurring across parts of Iraq. In the longer term - the Iraq telecoms market offers many opportunities once the civil unrest stabilises and the government and operators are able to focus again on telecoms and digital growth. It has a large population of mobile phone users which have not yet adopted mobile broadband at any significant levels.
Yemen still has a number of hurdles to overcome before its telecoms sector can be considered progressive – not least the current political unrest which has reportedly seen attacks on telecommunications infrastructure. While four mobile operators ensure GSM and CDMA mobile services are available - mobile broadband services are still unaffordable for much of the population.
Syria is also in the midst of civil war which is not conducive to telecoms development. Mobile broadband is however available with both Syriatel and MTN Syria offering access via 3G services. Combined, the two companies had over 1.2 million active subscribers to mobile broadband services in 2014. However with the current civil fighting and destruction to telecommunications equipment is unclear in 2015 how much this has impacted upon telecoms services.
Lebanon is home to a growing technology sector, complete with local start-up incubators designed to provide seed funding and mentoring to technology entrepreneurs. To address the infrastructure issue a number of start- up hosting locations have emerged with the support of the government, in recognition of the importance of nurturing a local digital economy to contribute to overall economic development.
Building on this environment, in late 2014 the World Bank announced it would launch its Mobile Internet Ecosystem project (MIEP) in the country. Lebanon was chosen by the World Bank because it has a highly educated population who can speak a number of languages; is home to a number of well regarded universities for the region and has an economy which uses multiple currencies. Mobile services in Lebanon are provided by Alfa and MTC Touch over the government owned networks. Both operators launched 3G/HSPA services in October 2011, followed by 4G LTE networks more recently.
With smart phone penetration in Qatar one of the highest in the Middle East; mobile broadband services are expected to become a hot growth area for the near future. Mobile infrastructure is improving with Vodafone Qatar launching its 4G services in mid 2014 and Ooredoo Qatar in 2013. The very transient and rapidly expanding population, due to the large number of expatriate workers, creates considerable opportunity in Qatar.
Bahrain has often been recognised as being a “highly connected” country with both very high internet penetration and mobile penetration rates. This will be further enhanced by a number of recent initiatives to improve ICT infrastructure with both LTE 4G and national broadband networks becoming available. A decline in prices in recent years for both residential broadband and mobile broadband has also assisted in this increased uptake of such services.
The telecoms market is very important to the Iran economy and provides one the largest non-oil based revenue streams. Improving and expanding telecoms infrastructure has been the focus of investment in recent years, and Iran’s tech-savvy, young population is eager to take up next generation services. Current penetration levels indicate room for continued revenue growth as mobile data services are available but account for only a small proportion of total revenue. In November 2014 the first 4G LTE network was launched by MTN Irancell.
Israel’s mobile market is served by five mobile network operators. Factors that have helped drive competition include full mobile number portability and regulatory barriers that prevent operators from linking sales of handsets to services, or offering discounts to customers that commit to longer periods. Strong competition has led to operators focusing on mobile data and content opportunities as well as on costs, resulting in a number of infrastructure sharing agreements.
Jordan has a very progressive telecoms market and in 2015 mobile broadband took a further step when 4G LTE services became available. With mobile voice revenue growth less likely in this maturing market; the launch of 3G/HSPA networks has underpinned dramatic growth in mobile broadband.
Turkey possesses one of the largest mobile markets in the region due to its large population, which is characterised as young and increasingly urbanised and technically literate. Mobile penetration has reached levels indicative of a mature market. Healthy infrastructure-based competition exists between three mobile network operators. Increasing take up of mobile data services has in turn underpinned growth in mobile content and applications. Turkey has emerged as a noticeable front runner in the nascent mobile payments sector, supported by the country’s relatively young population and high credit card penetration.
While parts of the Middle East are currently experiencing significant political unrest and civil war - there are still many positive telecoms developments in the region. It offers much opportunity due to its large population and heavy reliance of mobile services. 4G LTE deployments are underpinning many infrastructure developments in the region which will lead to a higher uptake of mobile broadband services.
Etisalat planned to cover 99% of populated areas in the UAE with 4G by end-2015.
In August 2015 Turkey finally conducted its LTE Spectrum Auction and attracted US$4.5 billion in bids. The three incumbent operators, Vodafone, Avea and Turkcell all obtained licenses across the various frequencies.
In recent years, foreign companies were reluctant to invest in Iran’s ICT market due to sanctions placed against it. But with the easing and possible lifting of these sanctions; it is expected that attention will again turn towards this potentially lucrative market.
Infrastructure-based competition has been essential to growth in Bahrain; ADSL was once the dominant means of broadband access prior to widespread adoption of WiMAX and mobile broadband, which combined represent over 90% of total broadband subscriptions.
Jordan’s mobile broadband sector has around 2.3 million active subscribers in 2015 and this in turn is stimulating the growth of mobile apps, especially those based on messaging and social networking.
.The mobile content and applications market has come under renewed focus in Israel given the increasing affordability and penetration of smartphones.
Both major operators in Qatar have launched mobile broadband services underpinned by 3G or LTE networks. Adoption of such services provides a new revenue growth opportunity as the mobile voice market comes under increased competition.
The World Bank Mobile Internet Ecosystem project (MIEP) will see Lebanon become an incubator for international mobile applications.
3G services were launched in Iraq in early 2015.
Mobile broadband will undoubtedly poach subscribers from the fixed broadband market in Saudi Arabia, in much the same way that voice traffic is migrating from fixed to mobile platforms and resulting in falling fixed lines.
Mobile broadband has become a feasible proposition and viable alternative to fixed broadband in Kuwait following substantial investments in 3G/LTE technology.
Prior to the current civil crisis; Yemen was making strides to improve its telecoms infrastructure.
Mobile messaging is on the decline for the mobile operators in Oman; due to the migration from SMS/MMS to messaging applications in line with the proliferation of smart phones and mobile Internet.
Oman Mobile Telecommunications and Ooredoo Oman both purchased additional spectrum in 2015 in order to extend their 4G coverage throughout the country and continue building up mobile broadband services.
Companies mentioned in this report
Batelco, MenaTelecom, Lightspeed Communications, Kalaam Telecom, 2Connect, Noorsat, Zain Bahrain, Viva Bahrain; Telecommunication Company of Iran (TCI), Mobile Communications Iran (MCI), MTN Irancell, Tamin Telecom (Rightel), Rafsanjan Industrial Complex (Taliya), Mobile Telecommunications Company of Isfahan (MTCE), Telecommunication Kish Company (TKC); Iraqi Telephone and Postal Company (ITPC), Newroz Telecom, Asiacell, Zain Iraq, Korek Telecom, Regional Telecom; Cellcom, Orange (Partner), Pelephone (Bezeq), HOT Mobile, Golan Telecom, Rami Levy, Alon Cellular, Home Cellular, Marathon Mobile/Marathon 018 Xphone, Rounds; Jordan Telecom Group/Orange, Zain Jordan, Batelco/Umniah, MarkaVIP, Maktoob Group, Jabbar Internet Group, Jeeran, Sallaty, TE Data, Virgin Mobile MEA; Ministry of Communications, Qualitynet, Orbit Showtime Network (OSN), KIPCO, Mobile Telecommunications Co (MTC) / Zain, Ooredoo Kuwait, Kuwait Telecom Company (KTC) / Viva; Ogero Telecom, Cable One (Wigo Lebanon), Cedarcom, GlobalCom Data Services (GDS), Pesco Telecom, Sodetel, IDM/Cyberia, TerraNet, MTC Touch, Alfa Telecom, Cinemoz, Leap Ventures, MarkaVIP, Telly, ICFlix Media; OmanTel, Ooredoo Oman, Sultanate of Oman Television, FRiENDi, Majan Telecom (Renna), Samatel; Vodafone Qatar, Ooredoo Qatar; Saudi Telecom Company (STC)/Bravo, Integrated Telecom Company (ITC)/Bayn Consortium, GO Telecom/Etihad Atheeb, Mobily/Ettihad Etisalat/Bayanat Al-Oula, Zain KSA, Arabsat, ART, Orbit, Rotana, Lebara KSA/Etihad Jawraa, Virgin Mobile Middle East & Africa (Virgin Mobile MEA), Axiom Telecom; Syrian Telecommunication Establishment (STE), MTN Syria, Syriatel; Turkcell, Vodafone, Avea; Etisalat, du; TeleYemen, Public Telecommunications Corporation (PTC), Yemen Mobile, SabaFon, MTN Yemen, Y Telecom.