Boston, MA -- (SBWIRE) -- 08/28/2012 -- BMI's Q312 update to the UAE's telecommunications market report incorporates market data from the Telecommunications Regulatory Authority (TRA) and telecoms providers Etisalat and Emirates Integrated Telecommunication Company (du) relating to the end of March 2012. It contains an analysis of the mobile, fixed-line and broadband markets, and recent regulatory developments. It also contains our growth estimates for the key sectors during our forecast period, through to 2016.
Perhaps the most notable new development since our last report is the launch of commercial LTE network services by second-ranked du in June 2012. The operator reports the service is capable of speeds of 150Mbps, although existing devices can only support transmission of 100Mbps. The launch follows that of rival Etisalat, which launched LTE services in 2011. du has launched the service using 1,800MHz spectrum, in contrast to the more commonly used 800MHz or 2.6GHz bands.
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According to the TRA, there were 12.367mn mobile subscribers in the UAE at the end of March 2012. This is growth of 5.5% q-o-q, significantly higher than average quarterly growth of 1.8% during 2012. The market recorded net additions of 640,000 subscribers in Q112, equivalent of around 80% of the total net additions of 801,000 recorded in the 12 months to December 2011. Despite the UAE's relatively high mobile penetration rate, we forecast positive growth in the mobile market over the next five years. We forecast an overall growth of 9.5% during 2012 and average growth of 2.2% for the five years to 2016. This will bring the mobile subscriber base to around 14mn subscribers, a penetration rate of 165%.
We note that the fixed-line market will experience upside pressure from increased competition between Etisalat and du due to the implementation of carrier pre-selection services. However, this will be counterbalanced by increasing fixed to mobile substitution, which we expect to intensify with the roll-out of next generation mobile broadband technologies. We expect fixed-line penetration in the UAE to reach 22.9% at the end of 2012. We also expect positive growth for the remainder of our forecast period, although faster population growth based on BMI data means fixed-line penetration rates are expected to decline from 2012. By 2016, we expect the market to have around 1.908mn fixed-line connections, reflecting a penetration rate of 22.4%.
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