The Saudi mobile customer base grew by just over 20 percent in 2009, according to a Business Monitor International (BMI) survey. Growth in 2009 was only slightly lower than in 2008 when the market grew by 26.7 percent, said the survey. The strong growth in 2009 was partly due to the launch of commercial operations by Zain in late 2008. Saudi Arabia's high mobile penetration rate, which had exceeded 177 percent by the end of 2009, can be explained with reference to the country's two largest mobile operators, Saudi Telecom Company (STC) and Mobily (owned by Etisalat of the UAE). These operators are thought to harbour a large number of inactive prepaid users on their networks. BMI estimates that over 13 percent of Saudi mobile telephony customers had 3G handsets at the end of 2009. By the end of 2014, we predict that the proportion of 3G users will have risen to almost 40 percent. Given that the Saudi market contains a large number of multiple SIM owners and inactive prepaid cards, the number of Saudis with a 3G handset is likely to be significantly higher. Based on an assessment of the latest regulatory data, BMI estimate that the Saudi fixed-line sector grew by 3.9 percent in 2009. The bundling of a fixed-line service together with a broadband subscription could be one of the reasons for the continued fixed-line growth in 2009, at least among residential customers. Demand for traditional fixed voice services from business customers appears to remain relatively robust. Meanwhile, the latest set of regulatory figures show that the number of Saudi broadband subscribers had risen to 1.839 million by the end of June 2009; this was equivalent to 7.5 percent of the population. BMI estimates that the broadband penetration rate had risen to 9.5 percent by the end of 2009. One of the biggest factors driving subscriber growth in 2009 was the continued expansion of competition. This quarter sees the introduction of a new set of a new set of Business Environment Rankings for the Middle East. Although Saudi Arabia's own score remains unchanged this quarter, the country has risen from third to second position in BMI rankings. This change of position is due to the weaker performance registered by Bahrain.
