www.ameinfo.com - Despite a global economic crisis, the Middle Eastern telecommunications industry is expected to grow robustly in 2009, with 28.68 million net additions to the mobile market over the year, according to forecasts by Informa Telecoms and Media.
The number of mobile subscriptions in the Middle East will cross the 250-million mark in late 2009 to reach 250.79 million at year-end.
It's this expected growth that has led Informa Telecoms and Media to expand its influence in the Middle East with its new Dubai-based regional office. The Dubai office provides crucial support and advice to the region's telecom and media industry. This will be accomplished through Informa's range of services including core data products, World Cellular Information Service (WCIS) and World Broadband Information Service (WBIS), as well as its industry analysis tool, Intelligence Centre.
One of the key reasons Informa's analysts are so optimistic, is despite the already record growth of the past few years, there is still plenty of room for investment. Saudi Arabia for example, despite being a more developed economy, still has a relatively low penetration rate in the field of broadband. When this is coupled with the fact that the Kingdom possesses such a young population - 50% are below the age of 15 and 67% below the age of 25 - it becomes clear why investors are still eager to engage with the market. Saudi Arabia currently has a penetration rate of 80%. This may seem high, but when compared to other Gulf nations, many of whom have rates well above 100%, it's clear that there is still substantial room for growth.
Egypt, the Arab world's most populous nation with 74 million inhabitants, still only had a mobile penetration rate of 49.65% at end-September 2008. All three Egyptian operators have now launched 3G, allowing them to offer new data and content services.
stated Mike Woolfrey, Informa Telecoms and Media Managing Director - Industry Research.
Indeed, Iran has experienced the most growth in the region, overtaking Saudi Arabia to become the largest mobile market in the Gulf. At the end of September 2008, there were an estimated 42.79 million mobile subscriptions in Iran. By the same date, MTN Iranccell, Iran's number two operator, had amassed a subscription count of 13.14 million - this after only having launched its services two years prior. The recent award of Iran's third mobile license to Etisalat should drive a new phase of growth.
The growth however, isn't contained to the region, as several Gulf-based operators are rapidly becoming global players. Three of the five fastest-growing operators in the world last year have their origins in the Gulf, according to research by Informa Telecoms and Media. Q-Tel topped the growth list, with its global proportionate equity subscriptions count climbing 129.5% in the 12 months to end-3Q08, from 9.7 million to 22.3 million. The second-fastest growing international operator was Etisalat while Zain was ranked fifth.
'The expansion strategies of some of these firms have been very bold,' stated Matthew Reed, Analyst Mobile Markets, Informa Telecoms and Media. 'Expansion in emerging markets is at the heart of many Gulf-based mobile operators' strategies - and has enabled them to achieve rapid growth, turning them into global players.'
Informa also predicts that 2009 will witness further development and deployment of new technologies and services, including WiMAX and mobile virtual network operators (MVNOs). With customer demand for broadband access outpacing the supply, technologies such as WiMAX have the potential to fill several important gaps. As a potential alternative to DSL, many operators are looking to build WiMAX networks in their countries. Informa predicts that by 2012, there will be 3.6 million consumer WiMAX subscriptions in the Middle East Africa region and 840,000 business subscriptions. Although a promising technology, WiMAX will face stiff competition from other wireless systems such as HSDPA, which can be built off of existing networks.
Meanwhile, Oman is expected to be the first Middle Eastern country to introduce MVNOs, with two services due to launch in the coming few months. Other countries in the region such as Egypt and Saudi Arabia are likely to watch developments in Oman closely and may implement their own systems in the coming years. MVNOs may be the most logical next step for the Middle East and Africa, where many markets are becoming saturated with three or more operators. A MVNO will not have to incur the costs of building its own network, and can find new ways to cater to specific types of clients.
As operators look to secure their portion of the market, they will go extra lengths to strengthen their brand name and improve their existing services. Zain's One Network international roaming scheme is potentially a powerful customer acquisition and retention tool that allows its subscribers to pay local tariffs when they travel across much of Zain's footprint in the Middle East and Africa. Zain now plans to extend One Network to other operators, including those in Europe and Asia.
'Bottom line is, we're entering a new stage in the Middle East market, and it's one that is going to have some very positive effects for customers,' added Reed. 'The increased competition, the influx of new technology, and the drive to introduce new services will all create an environment that keeps telecom operators busy in the coming year.'