Decline in demand for voice

The Saudi Arabian fixed line voice market shrank by 4% to US$2 billion in 2005 and is set to contract on average by 7.6% annually over the next five years, according to a study by IDC

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By  Administrator Published  December 29, 2006

The Saudi Arabian fixed line voice market shrank by 4% to US$2 billion in 2005 and is set to contract on average by 7.6% annually over the next five years, according to a study by IDC.

The decline of the fixed-line market is primarily due to consumer migration to mobile services. However, due to the comparatively low cost of fixed-line calls and the momentum gathering behind voice over internet protocol (VoIP), the growth of mobile telephony has not stemmed the growth in fixed-line connections, which are set to rise 5% in 2006. “The new lines are a reminder of the under-penetrated nature of the Saudi telephony market but also of the rising demand for internet access,” said Mohsen Malaki, research and consulting director, IDC CEMA.

According to the study, the regulator is likely to open the market to voice over broadband (VoBB) services, further spurring competition and opportunities for both the incumbent and the new operator.

“ADSL and other broadband technologies will open the door to voice over broadband services in the country, and that will help mitigate the effects of the contracting circuit-switched telephony market,” commented Said Irfan, research analyst, IDC MEA in the report.

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