The spending on information technology is around 30 percent of the total, mostly concentrated on hardware and IT services, said CITC report.
It said the spending on ICT products and services is expected to grow by more than 10 percent in 2012, driven mainly by expected strong growth in demand for smart phones, high-speed networks and interactive applications resulting from strong growth of investment in the sector, and implementation of government projects, all of which will lead in turn to the growth of support services in the sector.
The ICT market in the Kingdom is the biggest in the Middle East in terms of capital value and volume of spending, and it accounts for more than 68 percent of the GCC ICT market. The capital investment of more than SR125 billion in the past 10 years is due to industrial diversification in the Kingdom and has led to increased demand for software, equipment and services that make up the fastest growing sector in the ICT market.
The total number of mobile subscriptions grew to around 53.7 million at the end of 2011, with a penetration rate of 188 percent.
Prepaid subscriptions constitute the majority (over 87 percent) of all mobile subscriptions, according to a new report from the Communication and Information Technology Commission.
The newsletter also states that fixed telephone lines stood at 4.63 million at the end of 2011, of which around 3.3 million, or 71 percent, were residential lines.
This represents a household teledensity of around 69.3 percent and a population teledensity of about 16.2 percent. This is slightly lower than the world average of over 17 percent but is higher than the averages in the Arab world and in developing countries.
It is clear that the rate of demand for fixed line service has been relatively stable since 2004. The main reason is the rapid spread of mobile telecom services due in part to the ease of subscription and the gradual decrease in prices.
This has led to a lower number of requests from consumers for fixed services.
However, the demand for fixed services, especially in major cities, is expected to grow as a result of growing demand for broadband services, especially for fiber optic network (FTTx) services.
Internet penetration increased at a high rate during the past years from 5 percent in 2001 to about 47.5 percent at the end of 2011.
The estimated number of Internet users in the Kingdom is now 13.6 million.
The significant growth in the availability of high-speed broadband services and applications, continuing decline in the prices for devices and services, and significant usage of electronic transactions (banking, commercial and government) have stimulated the growth of Internet services. It is expected that the demand for Internet services will increase significantly in the next few years due to the availability of optical networks (FTTx) at very high speeds, especially in large cities at first, growing Internet content and the spread of handheld smart devices and applications.
Fixed broadband subscriptions including ADSL, Fixed Wireless (WiMAX), FTTx and other fixed lines grew to around 1.95 million subscriptions by the end of 2011. The fixed broadband penetration rate was about 33 percent of households.
Total mobile broadband subscriptions reached 11.3 million at the end of 2011, representing a penetration of 39.6 percent of the population.
The mobile broadband market continues to gain momentum in the Kingdom.
The key reasons for this growth are vigorous competition, a healthy expansion of smart phones, and offers of various data packages by the mobile operators. It has become easier to access the Internet via mobile devices such as smart phones. The mobile networks are also improving as 3.5G technology (HSPA) continues to be deployed and as new 4G wireless broadband technologies emerge over the next few years.
It should be noted that in calculating the number of subscriptions, CITC has adopted the new methodology recommended by ITU in early 2011.
This allows for inclusion of combined voice and data subscriptions at broadband speeds. As a result, the broadband subscription and penetration totals for 2011 are substantially higher relative to those reported previous years.
Studies indicate that broadband services will be the main driver for the growth of telecommunications and information technology in the coming years and an important source of income for the sector.
The opportunities for deployment of broadband networks in the Kingdom are good in the immediate future, especially for fixed wireless and mobile networks, to meet increased demand for broadband services and applications.
The gap in the penetration of broadband services in the Kingdom is still large compared to the developed countries.
The objectives of the Ninth Development Plan of the Kingdom include “the pursuit of a knowledge-based economy through the application of electronic transactions and the dissemination of use in all regions of the Kingdom.” Therefore, in order to achieve this objective and to facilitate the flow of information, there is a great need for high-speed and high-quality broadband networks at reasonable prices to be made available in the Kingdom.
The growth of capital investment, development and expansion and of ICT networks have significantly contributed to the national gross domestic product (GDP). This has been the result of liberalizing the telecommunications sector and opening the markets to competition, which in turn has attracted investments and growth of the sector.
The deployment of modern technology and availability of applications have the positive effect of raising the efficiency of other economic sectors as well. The growth in GDP in 2011 was SR2.1 billion or about 7 percent.
Mobile services revenues represent about 80 percent of all telecom sector revenues in the Saudi market.
In addition to revenues from the domestic market, investment by licensed Saudi telecom companies in foreign telecom markets have led to a rapid growth of revenues for the sector from foreign operations, from SR455 million in 2007 to around SR18.2 billion ($4.85 billion) in 2011. Domestic revenues, however, still represent over 78 percent of the total telecom sector revenues of SR84 billion ($22.4 billion) in 2011.
The performance of mobile operators in Saudi Arabia during the year 2011 was within the international standards
The analysis of quality of service indicators by CITC shows that the performance of mobile operators during the year 2011 was within the upper limit of 2 percent for the call success and call drop rate indicators. These two indicators are a means of checking the ability to make and maintain a continuous call without being dropped during the connection.
The analysis also shows that the performance of operators was within limits with regard to the quality of service indicator to answer 80 percent of customer service calls within 60 seconds of the request to speak to an agent.
In addition to quarterly reports submitted by the operators, CITC monitors the operators’ performance through extensive drive testing throughout the Kingdom, covering over 50 cities, towns and major highways.
