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Value of mobile subscribers to increase
Published in The Saudi Gazette on 07 - 05 - 2014

a href="/myfiles/Images/2014/05/07/sr02_big.jpg" title="Telcos need to "love" their subscribers more. Image: Ashley Van Dyck. "
Telcos need to "love" their subscribers more. Image: Ashley Van Dyck.


Does your Saudi telecom company love you? If you're a current subscriber with money to spend, expect to feel their “affection,” as they gently filch riyals from your wallet. This week I received an SMS from Saudi Telecom Company (STC) that read, “Dear Customer, STC will issue your next bill invoice on a monthly basis allowing you to better follow up your bills.”
Oh, how kind of them! I get to pay STC monthly now instead of having credit for two months – and yet they act as if they are doing me a favor. Saudi Arabia's mobile market has grown beyond maturity and rather than gaining new subscribers, Business Monitor International (BMI) expects operators to focus their efforts on building revenues from existing subscribers – any way that they can.
“BMI has observed a number of developments that show operators are keen to build revenues on the back of growing demand for data and content, a strategy we believe will provide long term market value growth. While subscription numbers are expected to slow significantly, the value of subscribers will increase according to BMI's forecasts,” noted the research company in its Saudi Arabia Telecommunications Report Q2 2014.
Key data from the report showed that mobile subscriptions declined in Saudi Arabia in Q3/13 but BMI estimates the market recovered in the final quarter of the year to reduce the overall decline. Modest growth is expected for 2014-2018. Fixed-line subscriptions declined in the Kingdom's residential sector and BMI revised forecasts to reflect an earlier decline than previously expected. Bundled services will remain the key supporting factor to sustain the fixed-line market. Dedicated mobile broadband accounts for the largest share of subscriptions in Saudi Arabia and continues to demonstrate robust growth. BMI has revised and raised its forecasts, expecting to see 16.8 million fixed and mobile broadband connections by 2018.
Saudi Arabia fell to second in BMI's Risk/Reward Ratings (RRR) table for Middle East and North Africa (MENA) in the company's Q3/13 update. The Kingdom's score benefits from strong voice and data subscriptions growth, partly fuelled by seasonal demand during religious festivals. Saudi Arabia's lowest score, albeit higher than the regional average, is in the industry risks category and reflects the government's significant interest in the telecoms sector through its majority stake in STC.
Developments in the Saudi telecom sector show that operators are looking beyond traditional consumer voice and data services with Mobily announcing the launch of its M2M platform in March 2014. The company had previously announced its partnership with Jasper Wireless in 2013. Mobily initially intends to target the automotive, healthcare, construction and utilities sectors with its M2M services. Investment in next generation networks and services was a major theme of 2013 and early 2014 and should benefit subscribers. STC announced deals with Ericsson, NSN and SAP to provide faster networks and new services to customers. Mobily has followed the same trend, selecting NSN to upgrade both its 3G and 4G infrastructure as well as high bandwidth connectivity in partnership with Ciena.


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