Saudi communications’ market going for a sonic boom

As deregulation kicks in a newly released report looks at the future of the Saudi communications market.

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By  Paul Barthram Published  March 10, 2003

With the privatisation of Saudi Telecom (STC), and new competition entering the GSM market in just over one years’ time, what does the future hold for the Saudi GSM market?

As mobile technologies become more sophisticated, and more cost effective, Saudi Arabia is expecting a boom in the GSM industry over the next few years, likely to make it the most lucrative part of the Saudi communications market.

A newly released report from the Arab Advisors Group (www.arabadvisors.com) predicts revenues to reach $7.9 billion in 2007, up from $3.4 billion last year.

Arab Advisor’s senior analyst Shahin Shahin expects a growth boom to the market, which until now has otherwise lagged behind its GCC counterparts.

“It is true that Saudi Arabia’s GSM market has belatedly boomed. However a growth boom is currently in full swing and will continue throughout the forecast period,” remarked Shamin.

Whereas revenues from fixed line sales have remained relatively inactive over recent years, the mobile market has seen revenues increase by 41.1% on a compounded annual growth rate (CAGR), compared to the fixed lines 6.5% which now only make 48% of total operating revenues.

Shahin’s report goes on to mention how the growth in mobile adoption has ‘radically changed’ the traffic patterns in the Saudi market, with the number of international calls made on mobiles between 1999 and 2001 growing by 305% alone.

A number of improvements to the service were made over this period including rate reductions, the introduction of a prepaid service and better marketing.

Continued expansion will see improved technology, clearer signals and a projected growth rate of 77% penetration by 2007, which can only mean good news for the consumer.

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