JEDDAH, 9 January 2006 — Mobile phones have transformed Saudi Arabia’s telecom market thanks to huge investments that it continues to attract.
The Kingdom has emerged as the second biggest mobile market in the Middle East and North Africa (MENA) region. This market has also experienced strong growth over the last three years.
The cellular market is booming not only in the Kingdom but in the entire Middle East as well, and the region is tipped to overtake Asia-Pacific in mobile penetration rate, according to market leaders.
Saudi mobile telecommunications operator Ettihad Etisalat’s Mobily service, which began operations in the Kingdom last spring, signed up one million subscribers by the end of 2005 after successfully bidding $3.2 billion to gain the Kingdom’s second mobile phone license late last year.
According to the company’s corporate Sales Manager Hassan Al-Sawwa, the company, a joint venture of Saudi interests and the UAE telecoms operator Etisalat, also intends to offer a range of third generation mobile services covering the whole of the Kingdom. Mobile phones have hugely altered the Kingdom’s telecommunications market, he added.
The explosion in services began in 1994 with the introduction of the Global System for Mobiles (GSM) services. Since then, from a low base of a few thousand subscribers, the number has soared to more than eight million comprising nearly 70 percent of all telephone subscribers across the Kingdom.
Ettihad Etisalat is competing with Al Jawal, the cellular arm of Saudi Telecom Company, which has been spurred to fast track introduction of the Kingdom’s first multimedia messaging service able to transmit video, pictures, voice, and sound as well as text messages.
The Kingdom already comprises the largest telecommunications market in the Gulf and is one of the fastest growing in the Middle East. The sector, which has some four million fixed lines and eight million mobile lines, has been expanding at a rate of 30 percent a year.
“Significant government policy shifts and economic growth are the core factors contributing to the boom in the Middle East mobile market,” Wisam Francis, MENA analyst at BIS Shrapnel, told Arab News.
The region’s mobile market reached a new record in 2005, as a massive 20.6 million new subscribers took up a cellular service. “This boosted mobile subscriber rates across the Middle East by 48 percent, bringing the total cellular subscriber base to 62.9 million by the end of 2005,” said Francis who has also authored the Middle East Telecommunications 2005 to 2010 report.
About the region’s prospects for 2006, Francis said growth was showing great promise, with at least a further 150 million people in the region currently living within the range of a mobile network. “It’s conceivable that the cellular subscriber will double.
Excluding Turkey, this promising outlook includes the Kingdom, the UAE. Egypt, Iran, Palestine, Jordan, Kuwait, Lebanon, Oman, Qatar, and Syria,” he said. While Iraq and Algeria have recorded triple digit growth in 2005, the Kingdom, Egypt, Jordan, Oman, Syria, Tunisia, and Yemen had an average yearly subscription growth of 50 percent or more.