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Saudi Arabia: Mobile Network Upgrades, Fiber Expansion and Digital Transformation to Remain Key Focus Areas for Operators

Saudi Arabia: Mobile Network Upgrades, Fiber Expansion and Digital Transformation to Remain Key Focus Areas for Operators

Summary

In 2017, Saudi Arabia is expected to generate telecom service revenue of US$17.1bn (equivalent to 2.5% of nominal GDP), only a -1.5% drop over 2016, as the market gradually recovers from the -6.5% decline registered in 2016, owing to disconnection of unregistered users and MTR cuts. Mobile voice is the largest revenue-contributing segment, accounting for 38.4% of total service revenue in 2017. Mobile data will be the fastest-growing segment, presenting a CAGR of 10.5% over 2017-2022 owing to growing consumption of data-intensive services and rising investments in LTE networks.

It is expected that overall service revenue to grow at a CAGR of 4.2% during 2017-2022 to reach $21.0bn. Growth will be driven by data services given the increasing adoption of 4G, FTTH and the popularity of OTT services. Mobile voice and data segments together will account for 76.1% of total revenue in 2017. Fixed voice and Internet segments will account for a combined 22.3%, while pay-TV will hold the remaining 1.6% share in 2017.

Total fixed access lines in Saudi Arabia will continue to grow from 7.1m in 2017 to 8.9m in 2022, owing to robust growth in FTTH/B (24.6% CAGR) and FWA (28.5% CAGR) lines. Though DSL is still expected to be the most adopted broadband technology (24.0% of total access lines) in 2017, its share will decline to 21.2% by 2022, as adoption of FWA (mainly supported by fixed LTE connections) and FTTH/B continues to rise.

The top two operators, STC and Mobily, are expected to generate together 75.2% of total telecom service revenue in Saudi Arabia in 2017. STC will continue to dominate the Saudi telecom market through 2022 with a focus on improving network speeds, connectivity and digital services. It is expected that 3G subscriptions to witness a -12.2% CAGR decline between 2017 and 2022 to reach 14.8m or 22.7% of total mobile subscriptions by 2022 compared with 28.4m in 2017. The decline will result from the increasing adoption of LTE services, which are expected to reach 49.0m or 75.1% of total mobile subscriptions by year-end 2022.

Over the next five years, operators can benefit from the opportunities existing in offering tailored ICT enterprise services (e.g., vertical-specific cloud and M2M/IoT services) to support the private sector’s and government’s digital transformation. Furthermore, continued focus on launching high-volume data plans, data-intensive services (e.g., OTT video) and innovative digital services (e.g., taxi sharing, e/m-commerce) can help operators better monetize their broadband infrastructure investments.

The report Saudi Arabia: Mobile Network Upgrades, Fiber Expansion and Digital Transformation to Remain Key Focus Areas for Operators provides an executive-level overview of the telecommunications market in Saudi Arabia today, with detailed forecasts of key indicators up to 2022.

In depth, this report provides the following analysis -

  • Regional context: Telecom market size and trends in Saudi Arabia compared with other countries in the region.
  • Economic, demographic and political context in Saudi Arabia.
  • The regulatory environment and trends: A review of the regulatory setting and agenda for the next 18-24 months as well as relevant developments pertaining to spectrum licensing, national broadband plans, number portability and more.
  • A demand profile: Analysis as well as historical figures and forecasts of service revenue from the fixed telephony, broadband, mobile voice, mobile data and pay-TV markets.
  • Service evolution: A look at changes in the breakdown of overall revenue between the fixed and mobile sectors and between voice, data and video from 2017 to 2022.
  • The competitive landscape: An examination of key trends in competition and in the performance, revenue market shares and expected moves of service providers over the next 18-24 months.
  • In-depth sector analysis of fixed telephony, broadband, mobile voice, mobile data and pay-TV services: A quantitative analysis of service adoption trends by network technology and by operator, as well as of average revenue per line/subscription and service revenue through the end of the forecast period.
Companies mentioned in this report: STC, Mobily, Zain KSA, Go Telecom, Virgin Mobile, Lebara, beIN Sports, ITC.

Scope
  • The overall telecom service revenue in Saudi Arabia will grow at a CAGR of 4.2% during 2017-2022, mainly driven by growth in mobile data and fixed broadband segments
  • Mobile revenue will account for 76.1% of total telecom revenue in 2022; mobile data will witness a CAGR of 10.5% during 2017-2022.
  • The top two operators, STC and Mobily will account for 75.2% share of overall service revenue in 2017. We expect competition to intensify after Mobily and Zain acquired unified license from the regulator.
  • Government plans for the country's digital transformation and supporting ICT infrastructure and platforms development will support telecom growth in KSA.
Reasons to buy
  • This Country Intelligence Report offers a thorough, forward-looking analysis of Saudi Arabia's telecommunications markets, service providers and key opportunities in a concise format to help executives build proactive and profitable growth strategies.
  • Accompanying GlobalData’s Forecast products, the report examines the assumptions and drivers behind ongoing and upcoming trends in Saudi Arabia's mobile communications, fixed telephony, broadband markets, and pay-TV, including the evolution of service provider market shares.
  • With more than 20 charts and tables, the report is designed for an executive-level audience, boasting presentation quality.
  • The report provides an easily digestible market assessment for decision-makers built around in-depth information gathered from local market players, which enables executives to quickly get up to speed with the current and emerging trends in Saudi Arabia's telecommunications markets.
  • The broad perspective of the report coupled with comprehensive, actionable detail will help operators, equipment vendors and other telecom industry players succeed in the challenging telecommunications market in Saudi Arabia.


Executive summary
Market and competitor overview
Regional context
Economic, demographic and political context
Regulatory environment
Demand profile
Service evolution
Competitive landscape
Major market players
Segment analysis
Mobile services
Fixed services
Pay-TV
Identifying opportunities
Opportunities in the market
About the authors
Country Intelligence Report coverage
List of Tables
Saudi Arabia telecom market size and growth prospects in a regional context, 2017E
Country indicators
Regulatory structure and policy
Major telecommunications policy issues
Saudi Arabia communications market revenue, 2015-2022, US$
Segment revenue CAGRs, 2017-2022, US$
Segment revenues 2015-2022
Service revenue mix: voice, data & video, 2017, 2022
Service revenue mix: fixed & mobile, 2017, 2022
Service revenue by operator, 2017
Key telecom market players
Major telecommunications market players
Mobile subscriptions and penetration, 2015-2022
Key mobile market indicators, 2017
ARPS by payment and device type, 2017
Mobile services revenue mix, 2017, 2022
Mobile market shares by subscriptions, 2015-2022
Mobile subscriptions by technology family, 2015-2022
Fixed-line penetration of population, 2015-2022
Key fixed market indicators, 2017
Fixed voice and Internet revenue, 2015-2022
Fixed market shares by service, 2017
Access lines by technology, 2017, 2022
Pay-TV subscriptions by technology, 2015-2022
Opportunities in the Saudi Arabia telecommunications market
List of Figures
Saudi Arabia telecom market size and growth prospects in a regional context, 2017E
Country indicators
Regulatory structure and policy
Major telecommunications policy issues
Saudi Arabia communications market revenue, 2015-2022, US$
Segment revenue CAGRs, 2017-2022, US$
Segment revenues 2015-2022
Service revenue mix: voice, data & video, 2017, 2022
Service revenue mix: fixed & mobile, 2017, 2022
Service revenue by operator, 2017
Key telecom market players
Major telecommunications market players
Mobile subscriptions and penetration, 2015-2022
Key mobile market indicators, 2017
ARPS by payment and device type, 2017
Mobile services revenue mix, 2017, 2022
Mobile market shares by subscriptions, 2015-2022
Mobile subscriptions by technology family, 2015-2022
Fixed-line penetration of population, 2015-2022
Key fixed market indicators, 2017
Fixed voice and Internet revenue, 2015-2022
Fixed market shares by service, 2017
Access lines by technology, 2017, 2022
Pay-TV subscriptions by technology, 2015-2022
Opportunities in the Saudi Arabia telecommunications market

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