Saudi Arabia - Telecoms, Mobile, Broadband and Forecasts

Executive summary

Incumbent looks abroad amidst heated domestic competition

Saudi Arabia’s possesses a steadily growing telecoms market. As with many telecoms markets in the region, lack of strong competition in the fixed line market meant much of the growth has been underpinned by mobile.

With the fixed line market subject to increased competition incumbent operator STC has focused on international expansion and the underdeveloped broadband market, launching FttH services boasting speeds of up to 1Gb/s and offering IPTV services. By 2015 the incumbent plans to derive 50% of total revenue from international operations, compared with 33% currently.

Broadband services are available via ADSL, fibre and wireless. Infrastructure-based competition in the FttX market will only intensify after two competing operators, backed by the incumbent telcos of Bahrain and United Arab Emirates respectively, signed agreements in 2011 with vendors to deploy competing networks.

Faster speeds and increasingly affordable broadband access has fostered development of a digital economy, encompassing government services (e-government), e-health, e-education and e-commerce. The latter has received a boost following implementation of a geo-coordinate based addressing scheme in a country where not all streets are names and all houses numbered.

Intense mobile competition among four mobile network operators and availability of mobile number portability has pushed mobile SIM card penetration levels towards 200%. Prepaid users represent the overwhelming majority of total subscriptions, only adding to the fierce competition. All three GSM/WCDMA based operators have either launched LTE networks or awarded contracts to do so, underpinning a future growth path centred on mobile broadband services and applications.

Companies covered in this report include:

Saudi Telecom Company (STC), Oger Telecom, ITC, Bayanat Al Oula, Etihad Atheeb Telecommunications Company (Go), Arabsat, MBC, Orbit Showtime Network (OSN), Rotana Media Group, Jawal, Ettihad Etisalat (Mobily), Public Telecommunications Company (Bravo), Zain Saudi Arabia.

This report provides a comprehensive overview of trends and developments in Saudi Arabia’s telecommunications market. The report analyses the mobile, Internet, broadband, digital TV and converging media sectors. Subjects include:

• Market and industry analyses, trends and developments;
• Facts, figures and statistics;
• Industry and regulatory issues;
• Infrastructure;
• Major players, revenues, subscribers, ARPU
• Internet, IPTV;
• Mobile voice and data markets;
• Broadband (FttH, DSL, cable TV, wireless);

Table of Contents

• 1. Executive summary
• 2. Key statistics
  • 2.1 Country overview
• 3. Telecommunications market
  • 3.1 Overview of Saudi Arabia’s telecom market
• 4. Regulatory environment
  • 4.1 Background
  • 4.2 Regulatory authority
  • 4.3 Telecom sector liberalisation in Saudi Arabia
    • 4.3.1 Data service provider licences
    • 4.3.2 New fixed-line licences
  • 4.4 Privatisation
  • 4.5 Interconnect and access
  • 4.6 Number Portability (NP)
  • 4.7 Universal service
• 5. Fixed network operators in Saudi Arabia
  • 5.1 Saudi Telecom Company (STC)
    • 5.1.1 Oger Telecom
    • 5.1.2 Cyberia Holdings
  • 5.2 ITC
  • 5.3 Bayanat Al-Oula/Mobily
  • 5.4 Etihad Atheeb Telecommunications Company (GO)
• 6. Telecommunications infrastructure
  • 6.1 National telecom network
    • 6.1.1 Alternative operators’ infrastructure
  • 6.2 International infrastructure
    • 6.2.1 Submarine cable networks
    • 6.2.2 Satellite networks
• 7. Telecoms & IT
• 8. Broadband access market
  • 8.1 Overview
    • 8.1.1 Censorship
    • 8.1.2 Broadband statistics
  • 8.2 Broadband forecasts
    • 8.2.1 Scenario 1 – higher growth
    • 8.2.2 Scenario 2 – lower growth
  • 8.3 Asymmetrical Digital Subscriber Line (ADSL)
  • 8.4 Fibre-to-the-Home (FttH)
  • 8.5 Broadband powerline (BPL)
  • 8.6 Wireless broadband
    • 8.6.1 WiFi
    • 8.6.2 WiMAX
    • 8.6.3 Mobile broadband
    • 8.6.4 Internet via satellite
• 9. Digital Economy/Digital media
  • 9.1 Services
    • 9.1.1 E-government
    • 9.1.2 E-health
    • 9.1.3 E-education
    • 9.1.4 E-commerce
  • 9.2 Smart cities/smart communities
    • 9.2.1 Smart grids
  • 9.3 Digital media
    • 9.3.1 Overview
    • 9.3.2 Social media
• 10. Digital Broadcasting
  • 10.1 Overview of broadcasting market
    • 10.1.1 MBC/Al Arabiya
  • 10.2 Satellite-based digital Pay TV
    • 10.2.1 ART
    • 10.2.2 OSN Orbit Showtime
    • 10.2.3 Rotana Media Group
• 11. Mobile communications
  • 11.1 Overview of Saudi Arabia’s mobile market
    • 11.1.1 Mobile statistics
  • 11.2 Regulatory issues
    • 11.2.1 Award of second GSM mobile licence
    • 11.2.2 iDEN contract awarded
    • 11.2.3 Award of Third Generation (3G) licences
    • 11.2.4 Award of third mobile licence
    • 11.2.5 Roaming
  • 11.3 Mobile technologies
    • 11.3.1 Analogue
    • 11.3.2 Digital
    • 11.3.3 3G/HSPA
    • 11.3.4 LTE/4G
  • 11.4 Major mobile operators
    • 11.4.1 Saudi Telecom Company (STC)/Jawal
    • 11.4.2 Ettihad Etisalat (Mobily)
    • 11.4.3 Public Telecommunications Company (Bravo)
    • 11.4.4 Zain Saudi Arabia
  • 11.5 Mobile voice services
    • 11.5.1 Prepaid
    • 11.5.2 Satellite mobile
  • 11.6 Mobile content and applications
    • 11.6.1 Location-based services (LBS)
    • 11.6.2 Mobile TV
• 12. Related reports

• Table 1 – Country statistics Saudi Arabia – 2010
• Table 2 – Telephone network statistics – 2010
• Table 3 – Internet user statistics – 2011
• Table 4 – Broadband statistics – June 2011
• Table 5 – Mobile statistics – March 2011
• Table 6 – National telecommunications authority
• Table 7 – GDP growth and inflation – 2005 - 2011
• Table 8 – Mobile, fixed-line and total telecommunications services revenue – 2001 - 2010
• Table 9 – STC Group revenue and profit – 2005 – 2011
• Table 10 – Fixed lines in service and teledensity – 1996 - 2011
• Table 11 – IT market revenue – 2006 - 2015
• Table 12 – Internet users and penetration estimates – 1995 - 2011
• Table 13 – Broadband subscribers and household penetration – 2001 - 2011
• Table 14 – Household PC penetration – 2002 - 2011
• Table 15 – Forecast broadband subscribers – higher growth scenario – 2011, 2015; 2020
• Table 16 – Forecast broadband subscribers – lower growth scenario – 2011, 2015; 2020
• Table 17 – Total mobile broadband subscriptions – 2009 - 2011
• Table 18 – Facebook data for Saudi Arabia – December 2010
• Table 19 – Mobile subscribers and penetration – 1995 - 2011
• Table 20 – Mobile operators, subscribers and annual change – March 2011
• Table 21 – Major mobile operators’ market shares – 2008 - 2011
• Table 22 – Mobily revenue and profit – 2006 - 2011
• Table 23 – Bravo financial data – 2007 – 2011
• Table 24 – Bravo subscribers and ARPU – 2007 – 2011
• Table 25 – Zain revenue, profit, subscribers and ARPU – 2008 – 2011
• Table 26 – Zain Saudi Arabia – Active Subscribers – 2008 - 2011
• Table 27 – Prepaid subscribers – 2002 - 2011
• Table 28 – Zain prepaid subscribers – 2008 - 2011

• Chart 1 – Saudi Arabia fixed-line and mobile subscribers – 2000 – 2011