◆英語タイトル：Saudi Arabia Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
The Saudi Arabia Telecom Market is expected to reach expected to register a CAGR of over 10% over the forecast period 2021 – 2026. The telecom industry is rapidly changing in terms of technological developments, service delivery, competitive landscape, and telcos’ services expansion in the non-traditional telecom services section. These include managed infrastructure services, data center/co-location services, and cloud services.
- In Saudi Arabia, the telecom market started expanding soon after liberalization in 2003. Since then, with the entry of foreign investment and government support, the country has built an extremely competitive telecom market.
- The country is one of the most populous nations in the GCC region, with the majority of the population comprising young people. With the growing use of technology, there is an increasing demand for information communication technology (ICT) services.
- As per The Communications and Information Technology Commission (CITC), 93% of the population in the country has access to the Internet versus the global average of 53%. Moreover, with a growing percentage of the population using smartphones, the enhancement in service quality offered by operators, and technology and infrastructure upgrades, the number of internet users is expected to increase further.
- Additionally, the country’s demographic structure, with around 69% of the population aged below 40, indicates a future rise in the demand for ICT services. Moreover, 5G is anticipated to bring in new investments, along with opportunities, for telcos. Saudi Arabian telcos are investing big on 5G.
- However, the telecom sector in Saudi Arabia is expected to face several challenges in commercializing 5G services such as transitioning from 2G, 3G and 4G networks to 5G, bearing costs of maintaining these networks until the transition is completed, availability of affordable 5G devices and empowering 5G into vertical markets such as the IoT and AI.
- Furthermore, the outbreak of COVID-19 in the first quarter of 2020 and the subsequent preventive measures taken by the government are expected to have a mixed impact on the telecom sector.
Key Market Trends
Successful Liberalization of Saudi Telecom Sector & Launch of MVNOs Driving the Market’s Growth
- Licensing of MVNO services is an essential step in the liberalization of the telecommunications market in the country. It aims to provide more choices for users of information and communications technology services. It is also expected to offer users with new applications and innovative services, enhance customer care, and to encourage further new investment.
- The country opened up the telecom market to MVNOs in 2013. Currently, two MVNOs are operating in Saudi Arabia, Virgin Mobile and Jawraa Lebara, with Saudi Telecom Company (STC) and Etihad Etisalat Company (Mobily) as host mobile network operators (MNOs), respectively.
- Although the entry of MVNOs increased competition and pricing pressure, it also brought an opportunity for existing MNOs to generate extra revenue by leasing out their infrastructure facilities.
- In January 2020, CITC invited applications for issuing licenses to foreign MVNOs to increase foreign investment in the sector, indicating the regulator’s intentions to maintain competitive pressure, considering consumer benefit. CITC is planning to award two MVNO licenses to international operators interested in investing in the country’s telecom market.
- The license was expected to be awarded in the third quarter of 2020 and would increase the competition and drive innovation in the mobile communications sector. The government agency also stated that operators awarded with a license would gain access to a market of more than 43.8 million mobile subscribers, with a mobile penetration rate of 129% of the total population.
- Additionally, this decision would also help achieve Saudi Arabia’s Vision 2030’s objective to increase ICT’s strength through the use of digital technologies. Licensing of MVNOs would also play a significant role in the five-year strategy established by the Ministry of Information and Communication Technology to accelerate the ICT sector’s growth by 50% and elevate its contribution to GDP by USD 13.3 billion.
- Moreover, growing mobile subscribers are expected to create opportunities for MVNO in the country. 5G is on the agenda for the country with the regulator awarding new spectrum for 4G/5G use in early 2019
- The main operators currently operating in the country have already launched 5G services. In November 2019, Zain announced the official launch of commercial 5G operations in the country. Zain acquired 100 megahertz of spectrum in the 3.5 GHz band at a total value of SAR 624 million (USD166 million).
- Furthermore, STC had officially launched 5G services in the country. The company currently provides 5G services through 100MHz of spectrum in the 3.5GHz band. The rollout of 5G would play a crucial role in shaping the market landscape.
Broadband Services in the Country is Expected to Receive Significant Boost
- Broadband is widely available in the country through digital subscriber line (DSL), fiber, and wireless. Saudi Arabia is one of the prominent countries in the Middle East region in terms of its fiber-based broadband deployment.
- The fixed broadband services (historically led by STC) have witnessed an increase in the use of new fiber connectivity in areas such as Jeddah, Mecca, Riyadh, Medina, and Damma.
- In November 2018, Saudi Arabia’s Ministry of Communications and IT (MCIT) signed an agreement with STC to implement the third phase of a project aiming to offer broadband access with download speeds of 10Mbps to 70% of households in remote areas by 2020.
- Under this deal, STC would provide broadband services to 444,076 households in more than 3,000 villages around Riyadh, Qassim, Makkah, Madinah, Al Bahah, Tabuk, Jazan, Hail, Asir, and Najran, thus extending coverage to a total of 2.5 million people. The first and second phases of the project were completed in July 2018, covering 16% of households in rural areas. Additionally, In June 2019, STC announced the official launch of 5G home broadband services in several cities in the country.
- The country intends to improve high-speed broadband Internet connectivity as part of its Vision 2030. The targets include exceeding 90% of housing coverage in densely populated cities and 66% in other urban areas. The country has set an ambitious goal: to connect 3.5 million households to ultra-fast Fibre-to-the-Home (FTTH) broadband networks by the end of 2020.
- In an initiative led by the country’s telecoms regulator, CITC, all the six Telecom Service Providers in the country a signed an open access agreement guaranteeing the provision of FTTH broadband services through any subscriber-selected service provider, independent of fiber infrastructure ownership.
- The agreement was signed by STC, Mobily, Zain, Etihad Atheeb Telecom (GO), Integrated Telecom Company (ITC), and Integrated Dawiyat. The initiative aims to encourage competition, attract investment, and increase broadband subscriptions by enhancing service quality and consumer choice.
- The adoption of an open-access model would increase the use of fiber-optic infrastructure through the development of commercial agreements that make it easier for subscribers to move from one provider to another. All these developments should benefit the telecom service provider in the long run and indicate a positive outlook for the country’s ICT segment.
The Saudi Arabia Telecom market is currently dominated by three players holding unified licenses: Etihad Etisalat Company (Mobily), Saudi Telecom Company (STC), and Mobile Telecommunication Company Saudi Arabia (Zain KSA). The market also hosts other Internet service providers (ISPs), MVNOs, and fixed-line service providers. Some of the recent developments in the market are:
- July 2020 – Zain KSA announced the expansion of the 5G network to cover all the county’s regions after it had recently included Al-Jouf and the northern borders. This expansion raises its 5G network’s total coverage to 30 cities throughout the country.
- June 2020 – Saudi Telecom Company (STC) and CommScope announced that they are deploying 30-port antennas, enabling the operator to bring innovation toward 5G across the Middle East and North Africa (MENA). The deployment of CommScope’s customized 30-port antenna enabled STC to support more technologies with less weight and wind-load on towers, solving the challenge of overburdened infrastructure and giving adequate room to deploy 5G equipment.
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1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Increasing Development of Fiber-based Networks and Fixed Broadband Service
4.2.2 Successful Liberalization of Saudi Telecom Sector & Launch of MVNOs
4.2.3 Largely Conducive Regulatory Environment Favoring Increasing Competition, and Advanced Infrastructure
4.3 Market Challenges
4.3.1 Telecom Service Spending to be Impacted by Large-scale Job losses and the Consequent Restriction on Disposable Incomes
4.4 Market Opportunities (Investment in Smart Cities, Cross-selling of Related Services such as Payment Platform, IPTV, OTT and Media Services)
4.5 Emergence of IoT & M2M Services in Saudi Arabia
4.6 Impact of COVID-19 on the Saudi Telecom Industry
4.7 PESTLE Analysis – Telecom Sector in Saudi Arabia
5 KEY TELECOM INDUSTRY STATISTICS
5.1 Breakdown of Fixed Voice Telecommunication Subscription (Business, and Residential), in million, 2019
5.2 Number of FTTx Internet Subscriptions, in million, Saudi Arabia, 2014-2019
5.3 Number of Fixed Broadband Subscriptions, in million, By Type(DSL, FTTx, Fixed Wireless), Saudi Arabia, 2019
6 Saudi Arabia Telecommunication Infrastructure (International Infrastructure such as Terrestrial and Submarine Cable Networks, Satellite Networks, along with Smart Infrastructure such as Blockchain, and Smart Grid, among others)
7 Telecommunication Laws, Regulations and Policies of Saudi Arabia (Key Telecom Statutes such as The Telecommunications Act, The CITC Ordinance, and The Telecommunication Bylaws, among other key policies)
8 MARKET SEGMENTATION
8.1 By Type
9 COMPETITIVE LANDSCAPE
9.1 Company Profiles*
9.1.1 Saudi Telecom Company (STC)
9.1.2 Integrated Telecom Company (ITC
9.1.3 GO Telecom (Etihad Atheeb Telecommunications Co.)
9.1.4 Zain KSA
9.1.5 Saudi Mobily Company (Etisalat)
9.1.6 Virgin Mobile Saudi Arabia
9.1.7 The Arab Satellite Communications Organization
10 INVESTMENT ANALYSIS AND MARKET OUTLOOK
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