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The Middle East mobile market offers opportunities for growth due to its large populations and increasingly progressive outlook. However there are vast differences between the various countries. Some markets have significant mobile penetration and are looking towards mobile broadband for growth – while other markets face more challenging issues with infrastructure destruction and civil tension inhibiting current growth. This report provides comprehensive insights and statistics into the mobile markets of the Middle East and includes the countries of Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates and Yemen.
Researcher:- Kylie Wansink
Current publication date:- March 2016 (13th Edition)
There are a number of countries across the Middle East offering progressive and increasingly competitive mobile markets. Saudi Arabia, Jordan and Israel, for example, offer highly competitive mobile markets while Kuwait, Qatar, Bahrain and the UAE have high mobile penetration leading to an increased focused on mobile broadband offerings. On the whole, mobile communications has become critical to progress in the region – it has become a key sector for attracting foreign and public investment; it contributes roughly 4% to GDP each year and generates a large amount of employment.
Kuwait has one of the highest mobile penetrations in the Middle East 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 deploying or exploring LTE-A services.
Bahrain’s mobile market is serviced by three Mobile Network Operators (MNOs) and subscriber numbers continue to show strong growth despite a highly penetrated market, indicating multiple SIM card ownership among consumers. The saturated mobile voice market has led to the mobile operators increasingly concentrating on mobile broadband, content and application services for revenue growth.
Iran has seen huge growth in mobile subscriber numbers in response to competition, and current penetration levels indicate room for continued revenue growth. Mobile data services are available but still account for a small proportion of total revenue.
Overall, the ongoing civil conflict has created a challenging environment for operators in Iraq with the destruction of infrastructure, fluctuating subscriber bases and resulting revenue declines all adding significant pressure. However 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. Mobile data services will increasingly underpin future revenue growth and in 2016 operators are beginning to make more attractive service offerings available.
Factors that have helped drive competition in Israel include full mobile number portability and regulatory barriers that encourage competition. This has led to operators to focus on mobile data and content opportunities as well as on operating costs, resulting in a number of infrastructure sharing agreements. Cellcom, Pelephone, Orange, Golan Telecom, Hot Mobile, and Marathon Mobile all won spectrum in a 4G LTE auction concluded in January 2015.
Competition in Saudi Arabia’s mobile market has increased significantly with both the introduction of MVNOs; along with a reduction in Mobile Termination Rates (MTRS). It has become one of the most competitive mobile markets in the Middle East, and as a result the pre-existing operators are all feeling the pressure with Saudi Telecom Company (STC), Mobily and Zain all reporting profit losses during 2015.
Jordan also offers a very progressive and competitive mobile market. In 2015 mobile broadband development took a further step when 4G LTE services became available. Zain Jordan was the first operator to be awarded a 4G license and has installed over 1,000 sites. Orange Jordan also launched 4G LTE in mid 2015.
Mobile penetration in the UAE is 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. The mobile market is served by a duopoly comprised of incumbent Etisalat and competing operator du. Both operators are majority owned by the government and Etisalat is the mobile market leader, with around 54% of the country’s mobile subscribers.
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 – however 4G is yet been deployed nationwide.
Oman citizens enjoy access to a well established mobile sector. Improvements to 4G infrastructure are underway with both operators; Omantel (Oman Mobile) and Ooredoo Oman recently acquiring spectrum in order to continue expansion plans throughout the country. LTE services have been available in Oman since 2012. Competition is set to increase with Oman’s Minister of Transport and Communications announcing in 2016 it was looking to license a third mobile operator.
Mobile penetration is high in Qatar and while such levels might suggest that there is little room for new competitors in the mobile market, the very fluid and rapidly expanding population due to the large number of expatriate workers creates considerable opportunity.
Prepaid services have been instrumental in encouraging mobile take up by the mass market in Syria. However penetration rates are still relatively low and Syria has been in the midst of civil war for a number of years.
The mobile penetration rates in Yemen also indicate there is much room for growth, with prepaid services accounting for the majority of subscriptions. However, similar to Syria, in 2016 mobile services are being impacted upon by the ongoing civil unrest which has seen attacks on various telecoms towers and communication outages across the board.
Turkey possesses one of the largest mobile markets in the region due to its large population. Mobile penetration has reached levels indicative of a mature market. Healthy infrastructure-based competition exists between three mobile network operators that have built GSM/HSPA networks. In 2015 the three incumbent operators, Vodafone, Avea and Turkcell all obtained LTE licenses across the various frequencies.
Companies mentioned in this report
Mobile Telecommunications Co (MTC) / Zain, Ooredoo Kuwait (previously National Mobile Telecommunication Co (NMT) / Wataniya Telecom), Kuwait Telecom Company (KTC) / Viva, Batelco, Zain Bahrain, Viva Bahrain, Telecommunication Company of Iran (TCI), Mobile Communications Iran (MCI), MTN Irancell, Tamin Telecom (Rightel), Mobile Telecommunications Company of Isfahan (MTCE), Telecommunication Kish Company (TKC), Iraqi Telephone and Postal Company (ITPC), Asiacell, Zain Iraq, Korek Telecom, Regional Telecom, Cellcom, Orange (Partner), Pelephone (Bezeq), HOT Mobile, Golan Telecom, Rami Levy, Jordan Telecom Group/Orange, Zain Jordan, Batelco/Umniah, Saudi Telecom Company (STC)/Bravo, Integrated Telecom Company (ITC)/Bayn Consortium, GO Telecom/Etihad Atheeb, Mobily/Ettihad Etisalat/Bayanat Al-Oula, Zain KSA, Lebara KSA/Etihad Jawraa, Virgin Mobile Middle East & Africa (Virgin Mobile MEA), Axiom Telecom, VIVA, Etisalat, du, Jordan Telecom Group/Orange, Zain Jordan, Batelco/Umniah, MTC Touch, Alfa Telecom, Ooredoo Qatar, Vodafone Qatar, OmanTel, Ooredoo Oman, FRiENDi, Majan Telecom (Renna), Samatel, Syrian Telecommunication Establishment (STE), MTN Syria, Syriatel, Turkcell, Vodafone Turkey, Avea.
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