Saudi Arabia – Telecom
The mobile sector has become an important component of Saudi
Arabia’s telecom industry and contributes around 75% to overall telecoms
revenues. The popularity of mobile technology is also driving up Internet usage
as Saudi Arabia has a very high mobile phone penetration coupled with a high
ownership of smart phones. This has led to a growth in Internet usage in recent
years and a rising demand on mobile broadband services.
However, the growth of the mobile sector recently faltered
due primarily to a regulatory change. In order to tighten control and security
of mobile phone usage and ownership; in early 2016 the Saudi Ministry of
Interior began implementing its biometric fingerprinting law. The law was
originally passed in September 2015 and requires consumers to supply their
fingerprint when purchasing a SIM card, with the information being shared with
the National Information Centre. The law resulted in a marked decline in mobile
subscribers in 2016, including mobile broadband subscriptions.
Broadband penetration is growing strongly in Saudi Arabia.
Broadband is available via ADSL, fibre, and wireless. In 2017 ADSL
subscriptions still account for the largest proportion of fixed broadband
Saudi Arabia is on improving its economic strength and
diversifying away from its reliance on oil. The government has developed the
“Saudi Arabia Vision 2030” program which provides the country with a roadmap of
goals and objectives for the future improvement of Saudi Arabia. Supporting the
use of digital technologies such as cloud computing and encouraging ICT
development feature heavily in Saudi Arabia’s vision for the future.
Mobile Telecommunications Market : The
total number of mobile subscriptions reached around 43.63 million by the
end Q2-2017, with population penetration rate of 137%. Prepaid subscriptions
constitute the majority (over 78%) of all mobile subscriptions.
Fixed Telephony Market : Fixed telephone lines
reached 3.75 million by the end Q2-2017, of which around 1.95
million were residential lines, This represents a household tele density
of around 32.9%.
Broadband Services Market : Recently, demand for
broadband services has increased significantly compared to previous years, due
to the society's need for broadband services, especially after the government
strong support for high tech projects which require good digital
infrastructure. In addition, many government services are being accessed
through e-government transactions. The widespread use of Internet in society is
another factor that led to this growth, where the Internet has become a major
source of hundreds of thousands of applications that are downloaded to smart
devices such as social networking, business applications, text messaging,
security tools, games and more. This has driven service providers to provide
many broadband packages targeting different user segments.
Fixed Broadband Services : Fixed broadband
subscriptions including DSL, fixed wireless (WiMax), FTTx and other fixed lines
have decreased to around 3.25 million subscriptions at the end Q2-2017. The
Fixed broadband penetration rate stands at about 44.2% of households.
Mobile Broadband Services : The total number of
mobile broadband subscriptions decreased and reached around 25.25 million
by the end Q2-2017, representing a population penetration rate
of 79.6 %. The mobile broadband market also continues to gain
momentum in the Kingdom. The key reasons for this include strong competition,
the healthy expansion in the use of smart phones, and the offering of various
data packages by mobile operators suitable for different user segments. These
have led to a dramatic rise in the number of users in recent years, and an
increase in the data traffic over these devices, supported by the wide coverage
of the 3G and 4G networks.
Internet Services Market : The number of Internet
users in the Kingdom continues to rise rapidly, reaching about 24.1
million at the end Q2-2017, with a population penetration of 76%.
Increased demand for Internet services and broadband was observed due to high
use of social networking applications, video downloading and gaming. Customers
are seeking higher speeds and larger packages resulting in heavy data traffic
on both mobile and fixed networks. It is expected that the demand for Internet
services will continue to increase significantly over the next few years as a
result of the availability of high speed fiber-optic networks (FTTx), increased
Internet content, and the continued spread of handheld smart devices and