Saudi Arabian telecom market has crossed saturation point and saw a fall of more than 2.5 million subscribers in Q2 2016.
Mobile subscriptions have avalanched to 48.4 million in Q2 2016, suggests Reportlinker research data. This was owing to a loss of 2.5 million subscribers in the second quarter of 2016. The preceding first quarter also had witnessed a fall of 1.9 million subscribers.
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The main reason behind the fall was reported to be the presence of inactive prepaid accounts abandoned by operators. The mobile market in Saudi Arabia will grow to around 52.7 million by end of 2020. The market is also witnessing strong demand for higher speed data services in the wireless and wireline segments.
Currently the country has a penetration rate of around 160 percent. For fueling further growth in the market, telecom operators are making investments to deploy advanced infrastructure.
E-Enterprise solutions, data centres and business solutions are sectors which may witness growth in the coming quarter. The net ARPU is however down while the infrastructure development is reported to be expensive.
Major deployments are underway in fiber backbones, with focus on efficiency of infrastructure and development of plans to outsource towers.
Recently, SoftBank announced investments of around $25 billion over the next five years in a non-binding memorandum of understanding (MoU) with the Public Investment Fund of the Kingdom of Saudi Arabia (PIF).
Also, the potential investment size will go up to $45 billion over the next five years.
Joining of other global investors may lead to the fund raising of up to $100 billion, suggest reports.
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The major telecoms in the region include STC, Mobily, Zain KSA, CITC, Virgin Mobile, Lebara and Go Telecom.
Saudi Telecom Company (STC) announced investment in start-up, small, and medium sized companies operating in the field of telecom and IT in the Saudi market with an initial amount of $50 million.
STC earlier announced investments of nearly SAR 8 bn on capex to improve its network coverage, in 2016.
Zain KSA entered in to network expansion and upgrade agreements worth 4.5 billion SAR today with Huawei, Nokia, NEC, Cisco, and Alcatel Lucent.
Earlier reports revealed that the Saudi Arabia telecom market will touch $18.8 billion revenue in 2016, with an increase over 2015.
Vina Krishnan
editor@telecomlead.com
