20 million Saudi mobile users by 2014

According to the Riyadh-based Economics Studies House the penetration rate of mobile phones could grow from the current 32% to 60% by 2014 taking the total amount of subscribers from 7 million to over 20 million subscribers.

  • E-Mail
By  Maddy Reddy Published  July 18, 2004

According to the Riyadh-based Economics Studies House the penetration rate of mobile phones could grow from the current 32% to 60% by 2014 taking the total amount of subscribers from 7 million to over 20 million subscribers. The research, which was commissioned by the MTN Group, highlights that that the rapid rollout of capacity to service almost 13 million new lines over the coming nine years, will be accommodated only when dramatic increases in network coverage and service availability are undertaken to meet demand in the Kingdom over the next decade. “Although Saudi is a large market in terms of the population size and the growth rate, the telecom sector lags behind neighbouring countries in the GCC. Mobile subscriber growth has been strong, but penetration is currently low when compared with other countries in the GCC and wider Middle East region,” says Dr Abdulaziz Daghistani of the Economics Studies House. Saudi Arabia, which is one of the largest telecommunications market in the Middle East region is growing at about 30% per annum. The Kingdom's burgeoning youth segment (15 to 24 age group) with high usage of mobile phones, along with high levels of purchasing power and a tendency to consume are driving the market. At the same time, the mobile phone as a business tool is growing in the Kingdom, especially as more data services become available, driving new subscriber growth in the business markets points out the Saudi research firm. While surrounding countries boast penetrations of 60 to 70%, the two largest Kuwait and the UAE only have 1.4 million and 3 million subscribers respectively are nearing saturation. These figures highlight the significant challenges that both Saudi Telecommunications Company and the new second mobile operator will face, both in providing basic services and customer support, as well as the value-added services that drive business. “A critical challenge for the new operator will be the ability to build out a network on a scale that’s never before been seen in the region to provide services to millions of new customers, as well as improve existing services to mobile users,” comments Phuthuma Nhleko, CEO of the MTN Group, one of the bidders for the new mobile licence in KSA. Part of the challenge of mobile penetration in Saudi Arabia is the relative newness of the mobile industry, as well as availability and quality of network service in many areas, particularly more remote areas in the south of the Kingdom. Under the terms of the second mobile licence, the new network operator would need to roll out services to the five major metropolitan areas of Jeddah, Riyadh, Khobar, Medina and Taif before commercial launch (predicted to take about one year), expanding the network to the rest of the country soon after. “The scale of this challenge is immense: not only is Saudi Arabia larger in size than its GCC neighbours, with the associated complexity of very long distances for base station links and trans-national data lines, but it is also has a vastly greater population. It is crucial that the second mobile operator has experience running networks of this size, over such large distances,” adds Nhleko.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code