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Saudi Arabia Telecommunications Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2009 Product Code: R302-8533 Description BMI’s latest update on the telecoms market of Saudi Arabia contains new data on the size of thecountry’s mobile telephony market as of mid-2009. It also includes new data on the size of the country’sfixed-line, internet and broadband subscriber markets, as published by the Saudi telecoms regulator.According to the Communications and Information Technology Commission (CITC), Saudi Arabia hadaround 9mn internet users at the end of 2008, up by 20% from 7.5mn at the end of 2007. BMI previouslyestimated that the Saudi internet user base numbered around 8mn at the end of 2008. The regulator’sfigures therefore show that internet user growth has been stronger than envisaged. Reasons for the stronggrowth in internet usage include an increased public awareness of the internet, the growth of broadbandservices, the decreasing cost of internet access and computers (both PCs and laptops) and a wider range ofinternet services. The regulator has also published data on the number of Saudi broadband subscribers at the end of 2008and at the end of March 2009. It appears that Saudi Arabia’s broadband subscriber base numbered1.33mn at the end of 2008. This had grown to 1.525mn at the end of March. Accounting for a large shareof overall broadband subscriber growth appears to be an increase in the number of subscribers connectingto the internet wirelessly. For example, it appears that both Saudi Telecom Company (STC), thecountry’s incumbent telecoms company, and mobile market rival Mobily have seen steady gains in thenumber of customers who use a USB device and a laptop to access the internet via the operator’s 3Gnetwork. Meanwhile, STC also offered WiMAX-based broadband services. The number of broadbandcustomers using WiMAX services is expected to grow in H209, following the launch of WiMAXoperations by Etihad Atheeb in June 2009. Despite Mobily’s growing presence in the broadband internet market, both it and STC have seen theirshare of the country’s mobile market rapidly eroded by the rise of Saudi Zain. Zain launched services inSeptember 2008 and, by the end of June 2009, had secured a 9.7% share of the mobile market. Much ofZain’s growth has occurred in the postpaid subscriber segment of the market. BMI estimates that, by theend of June, the Saudi mobile customer base had risen to 39.15mn; this gives the country a penetrationrate of 156%. This quarter sees no change to Saudi Arabia’s overall position in BMI’s latest Business EnvironmentRankings for the telecoms markets of the Middle East. This is in spite of receiving a slightly lower overallscore. The slight drop in Saudi Arabia’s overall score reflects a weaker rating in the Telecoms Marketcategory. The main reason for lower Telecoms Market score is the drop in ARPU, which has resultedfrom a slowdown in consumer spending. Table of Contents
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