Forecasting 37 million subscriptions by end 2010

Amidst intense competition, operators keen to increasing their efforts toestablish new revenue streams from data and value-added services.

Saudi Arabia’s mobile market continues to be the second-largest in the Middle East, after Iran, with a forecast subscription-count of 37 million at end-2010, representing an increase of 11.81% year-on-year.

The number of mobile subscriptions in Saudi Arabia is forecast to cross the 40-million mark during 2012 and to reach 45.05 million at end-2014, according to Informa Telecoms & Media.

However the rate of growth in Saudi Arabia’s mobile-subscriptions count will slow as the market matures, with the year-on-year rate of growth falling to 3.03% in 2014.

The rate of mobile penetration in Saudi Arabia is forecast to be 125.55% at end-2010, rising to 143.74% at end-2014.

Mobile market-leader STC will see some erosion of its market-share over the coming few years, but this will be relatively slow. At end-2010, STC is forecast to have 18.07 million mobile subscriptions and a market-share of 48.83%, down from 51.37% at end-2009 (see fig. 1).

Fig 1 Saudi Arabia, active mobile subscriptions forecasts, 2009-2014

STC’s mobile-subscription count is forecast to grow to 20.8 million at end-2014 but its share of the country’s mobile market will fall to 46.17%.

Zain Saudi Arabia, which made its debut in August 2008 as the country’s third mobile operator, is forecast to expand its market-share at the expense of both STC and No. 2 operator Mobily. Zain has introduced innovative pricing plans and promotions as well as its One Network roaming scheme.

Zain is forecast to have 5.76 million mobile subscriptions and a marketshare of 15.56% at end-2010, rising to 9.34 million subscriptions and a market-share of 20.74% at end-2014.

Mobily is forecast to have 12.92 million mobile subscriptions and a market-share of 34.92% at end-2010 but while its subscription count will rise to 14.47 million at end-2014, its market-share will decline to 32.13%.

As the growth in mobile subscriptions slows and revenues from voice calls remain static, or even decline, Saudi operators are increasing their efforts to establish new revenue streams from data and valueadded services.

Saudi Arabia’s relatively low fixed-broadband penetration, combined with a youthful population with an interest in new technology, has allowed operators to enjoy some success with mobile broadband services.

Mobily, which is said to have the busiest mobile broadband network in the world, is forecast to have 4.63 million HSPA subscriptions by end-2010, rising to 13.14 million at end-2014. STC will have 12.29 million HSPA subscriptions at end-2014 and Zain will have 2.55 million. That will give Saudi Arabia a total of 27.97 million HSPA subscriptions at end-2014.

Revenues from data services in Saudi Arabia are forecast to rise from US$1.58 billion in 2010 to US$3.28 billion in 2014, while voice-service revenues will fall slightly from US$11.51 billion in 2010 to US$11.35 billion in 2014.