Saudi Arabia - Telecoms, Mobile & Broadband

The Saudi Arabian telecoms market is perhaps the most interesting in the Middle East. It is more competitive than most others and all the big regional players have at least a toehold in the market. Saudi Arabian incumbent STC is the largest telecoms company in the Middle East when measured by either revenue or by market capitalisation. It has been joined in the Saudi Arabian mobile market by the second and third largest Middle Eastern regional players - Etisalat of the UAE and Zain of Kuwait.

Etisalat has considerably more than a toehold in the market. It won the second GSM/3G mobile licence and, operating as Mobily, now has a third of the GSM market and three quarters of the 3G market. It has also bought Bayanat Al Oula, a major ISP/data comms licence holder, and has invested in considerable fibre and Wi-MAX infrastructure.

Zain won the third GSM/3G licence in 2007 and launched operations in August 2008. It paid a huge US$6.1 billion fee, almost twice the price paid by Etisalat for the second mobile licence (US$3.45 billion) in 2004. At the time it was the world's highest licence fee on a per capita basis, at US$226 per Saudi inhabitant.

These three giants have been joined in the market by Batelco of Bahrain and Qtel of Qatar. Batelco is a major investor in a consortium, Etihad Atheeb, which has won a fixed-line licence. Finally, the remaining large regional player, Qtel, has a major share in the small iDEN mobile operator, PTC, through its Wataniya subsidiary.

What makes Saudi Arabia so attractive to all these operators the combination of its population size and wealth. While its total population is nowhere near as high as that of Turkey or Iran, its GDP per capita is much higher and while the smaller gulf countries are richer per capita, their populations are tiny. In addition its market has been slower to develop than some others in the region such as the UAE or Qatar, leaving room for growth.

Fixed-line penetration has remained steady for some years rather than falling as it has in some other countries in the region. Internet user penetration is nearly 30% but DSL broadband subscriber penetration is less than 5%. However, the number of DSL subscribers doubled during 2008. STC also started work on a FttH network in early 2009.

STC, Mobily/Bayanat Al Oula and Atheeb Telecom are all planning to make extensive use of WiMAX. Bayanat intends to have coverage of 20 cities by end-2009 with 1,800 base stations. It launched a WiMAX service for residential subscribers branded 'broadband@home' in September 2008 at speeds up to 2Mb/s. Coverage was initially available in Riyadh, Jeddah, Dammam and Khobar. Subscribers can be prepaid. In June 2009 Bayanat claimed to have 30,000 subscribers.

Mobile subscribers have grown rapidly in the competitive market and penetration rates went from 58% to 113% in the three years to early 2009. 3G subscribers now make up around 15% of the total.

Mobily is making an extensive push with mobile broadband, much more so than in Etisalat's home market of the UAE where it has a monopoly of the fixed-line market and thus mobile broadband growth might detract from its ADSL market. In Saudi Arabia, Mobily claimed to have over 600,000 mobile broadband subscribers in mid-2009 with over 100% growth in six months.

As competition becomes fierce in its home market, STC has used its considerable resources to expand abroad. It has direct interests in Malaysia, Kuwait and Bahrain and through its purchase of a 35% share in Oger Telecom, also in Turkey and South Africa.

• 1. Executive summary
• 2. Key statistics
  • 2.1 Country overview
• 3. Telecommunications market
  • 3.1 Overview of Saudi Arabia's telecom market
• 4. Regulatory environment
  • 4.1 Background
  • 4.2 Regulatory authority
  • 4.3 Telecom sector liberalisation in Saudi Arabia
    • 4.3.1 Data service provider licences
    • 4.3.2 New fixed-line licences
  • 4.4 Privatisation
  • 4.5 Interconnect and access
  • 4.6 Number Portability (NP)
  • 4.7 Universal service
• 5. Fixed network operators in Saudi Arabia
  • 5.1 Saudi Telecom Company (STC)
    • 5.1.1 Oger Telecom
    • 5.1.2 Cyberia Holdings
  • 5.2 ITC
  • 5.3 Bayanat Al-Oula/Mobily
  • 5.4 Etihad Atheeb Telecommunications Company
• 6. Telecommunications infrastructure
  • 6.1 National telecom network
    • 6.1.1 STC's infrastructure
    • 6.1.2 Alternative operators' infrastructure
  • 6.2 International infrastructure
    • 6.2.1 Submarine cable networks
    • 6.2.2 Satellite networks
• 7. Broadband and Internet market
  • 7.1 Internet market overview
    • 7.1.1 Censorship
    • 7.1.2 Internet statistics
  • 7.2 ISP market
  • 7.3 Broadband market overview
    • 7.3.1 Broadband statistics
  • 7.4 Asymmetrical Digital Subscriber Line (ADSL)
  • 7.5 Broadband powerline (BPL)
  • 7.6 Wireless broadband
    • 7.6.1 WiFi
    • 7.6.2 WiMAX
    • 7.6.3 Mobile broadband
    • 7.6.4 Internet via satellite
• 8. Digital media
  • 8.1 Overview of broadcasting market
    • 8.1.1 MBC/Al Arabiya
    • 8.1.2 Satellite-based digital Pay TV
    • 8.1.3 Kingdom Holding Co
• 9. Digital economy
  • 9.1 E-commerce
  • 9.2 E-learning
  • 9.3 E-health
  • 9.4 E-government
• 10. Mobile communications
  • 10.1 Overview of Saudi Arabia's mobile market
    • 10.1.1 Mobile statistics
  • 10.2 Regulatory issues
    • 10.2.1 Award of second GSM mobile licence
    • 10.2.2 iDEN contract awarded
    • 10.2.3 Award of Third Generation (3G) licences
    • 10.2.4 Award of third mobile licence
    • 10.2.5 SPAM controls
  • 10.3 Mobile technologies
    • 10.3.1 Analogue
    • 10.3.2 Digital
    • 10.3.3 3G
  • 10.4 Major mobile operators
    • 10.4.1 Saudi Telecom Company (STC)/Al Jawal
    • 10.4.2 Ettihad Etisalat (Mobily)
    • 10.4.3 Public Telecommunications Company (Bravo)
    • 10.4.4 Zain Saudi Arabia
  • 10.5 Mobile voice services
    • 10.5.1 Prepaid
    • 10.5.2 Satellite mobile
  • 10.6 Mobile data services
    • 10.6.1 Mobile TV
    • 10.6.2 iPhone
  • 10.7 Mobile content and applications
    • 10.7.1 Location-based services (LBS)
• 11. Related reports
• List of Tables
  • Table 1 - Country statistics Saudi Arabia - 2008
  • Table 2 - Telecom revenue statistics - 2007
  • Table 3 - Telephone network statistics - 2008
  • Table 4 - Internet user statistics - 2008
  • Table 5 - Broadband statistics - 2008
  • Table 6 - Mobile statistics - 2008
  • Table 7 - National telecommunications authority
  • Table 8 - Mobile, fixed-line and total telecommunications services revenue - 2001 - 2007
  • Table 9 - STC Group revenue and profit - 2005 - 2008
  • Table 10 - Fixed lines in service and teledensity - 1994 - 2008
  • Table 11 - Internet users and penetration estimates - 1995 - 2008
  • Table 12 - Internet subscribers - 2000 - 2008
  • Table 13 - DSL subscribers - 2001 - 2008
  • Table 14 - Mobily mobile broadband subscribers - 2008 - 2009
  • Table 15 - Mobile ARPU - 2002; 2004 - 2007
  • Table 16 - Mobile subscribers and penetration - 1995 - 2008
  • Table 17 - Mobile operators, subscribers and annual change - 2008
  • Table 18 - Major mobile operators' market shares: GSM and 3G - 2008
  • Table 19 - Mobily revenue and profit - 2006 - 2008
  • Table 20 - Bravo revenue, profit, subscribers and ARPU - 2007 - 2008
  • Table 21 - Zain revenue, profit, subscribers and ARPU - 2008 - 2009
  • Table 22 - Prepaid subscribers - 2002 - 2007
  • Table 23 - Zain prepaid subscribers - 2008 - 2009