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Saudi Arabia Telecommunications Report Q3 2012 - New Market Report Now Available

Recently published research from Business Monitor International, "Saudi Arabia Telecommunications Report Q3 2012", is now available at Fast Market Research


Boston, MA -- (SBWIRE) -- 08/16/2012 -- Saudi Arabia's three mobile operators reported strong financial results in Q112, benefiting from increased usage of high-value services. Incumbent STC recorded a 12% and 60% y-o-y growth in consolidated revenue and net income respectively, while Etihad Etisalat (Mobily) recorded 12% and 21% y-o-y growth in revenues and profits for its Saudi operations. Although third-ranked Zain KSA is still in the red in terms of profits, the operator cut its losses by 18% in Q112 compared to Q111 after a 3% y-o-y revenue growth in the same period.

Saudi Arabia is among countries that have seen a huge increase in public sector wages and government spending. We believe the key area of impact in the telecoms sector is rising consumer demand for premium products and services, a situation the country's network operators are well placed to take advantage of with the roll-out of next generation networks, including FTTx and 4G LTE. We expect strong private consumption, along with the seasonal surge in subscriptions and usage during the Islamic festivals, to sustain operators' revenue growth in 2012. BMI notes that the country's three leading mobile operators have announced significant LTE network expansion plans since our last update.

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According to the Communications and Information Technology Commission (CITC), the mobile market grew by 1.1% q-o-q in Q112 to 54.3mn subscribers by the end of March 2012. This partly reversed a contraction of 4.3% q-o-q during Q411. By the end of 2016, we forecast penetration in Saudi Arabia to reach 203%, unchanged from our previous update. This will equate to a predicted 63.2mn mobile subscribers. Growth in the country's mobile market will mainly be sustained by the influx of seasonal visitors for religious and business purposes, such as pilgrims to the annual Hajj.

We expect STC's investment in next generation fixed network infrastructure to be a key growth driver for fixed-line connections. Despite growth in fixed-line subscriptions, we expect fixed-line penetration to remain flat in the short term and then decline in the latter stages of our forecast period. By the end of 2016, we forecast a fixed-line subscriber base of 5.104mn, a penetration rate of 16.4%.

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