The data communications services market in Saudi Arabia is expected to see reinvigorated growth in the coming several years, driven by the entry of two new licensees in 2005, and the migration of enterprise customers to new and advanced services that are to be launched in the country over the next two years.

The market saw dramatic growth in 2002 and 2003, with much of the spending and connections coming from private circuits. Managed data network services have had a late launch in Saudi Arabia, and frame relay is the only service with a large enough revenue base. According to Mohsen Malaki, Program and Consulting Manager for IDC CEMA's Communications Group, "managed IP VPN connections are currently dominated by virtual network operators, although this is likely to change given the entry of two new data communications licensees, and the launch of commercial MPLS IP VPN by STC's data communications business unit, SaudiDATA."