Research and Markets’ most recent look at Saudi Arabia’s mobile market has identified the key areas of focus for operators in the Middle Eastern country.
Mobile network upgrades, fibre expansion and digital transformation are firmly on the agenda for the Kingdom’s service providers over the next year. In 2017, Saudi Arabia is expected to generate telecom service revenue of US$17.1bn (equivalent to 2.5% of nominal GDP), only a -1.5% drop over 2016, as the market gradually recovers from the -6.5% decline registered in 2016, owing to disconnection of unregistered users and MTR cuts.
Mobile voice is the largest revenue-contributing segment, accounting for 38.4% of total service revenue in 2017. Mobile data will be the fastest-growing segment, presenting a CAGR of 10.5% over 2017-2022 owing to growing consumption of data-intensive services and rising investments in LTE networks.
It is expected that overall service revenue to grow at a CAGR of 4.2% during 2017-2022 to reach $21.0bn. Growth will be driven by data services given the increasing adoption of 4G, FTTH and the popularity of OTT services. Mobile voice and data segments together will account for 76.1% of total revenue in 2017. Fixed voice and Internet segments will account for a combined 22.3%, while pay-TV will hold the remaining 1.6% share in 2017.
Total fixed access lines in Saudi Arabia will continue to grow from 7.1m in 2017 to 8.9m in 2022, owing to robust growth in FTTH/B (24.6% CAGR) and FWA (28.5% CAGR) lines. Though DSL is still expected to be the most adopted broadband technology (24.0% of total access lines) in 2017, its share will decline to 21.2% by 2022, as adoption of FWA (mainly supported by fixed LTE connections) and FTTH/B continues to rise.
The top two operators, STC and Mobily, are expected to generate together 75.2% of total telecom service revenue in Saudi Arabia in 2017. STC will continue to dominate the Saudi telecom market through 2022 with a focus on improving network speeds, connectivity and digital services. It is expected that 3G subscriptions to witness a -12.2% CAGR decline between 2017 and 2022 to reach 14.8m or 22.7% of total mobile subscriptions by 2022 compared with 28.4m in 2017. The decline will result from the increasing adoption of LTE services, which are expected to reach 49.0m or 75.1% of total mobile subscriptions by year-end 2022.