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The Middle East has witnessed a growth in wireless and broadband subscribers despite the global market showing a decline in 2009, a new research has found.
According to TeleGeography, a telecommunications research, analysis and consulting company, wireless subscribers in the Middle East at the end of Q1 2009 were at 232 million, which is a three per cent growth from Q4 2008 and a 22 per cent growth from Q1 of that year.
Globally, wireless subscriber additions in Q1 2009 declined slightly, as 153 million net new subscribers were added, 10 million fewer than in Q4 2008.
About 49 per cent of Q1 wireless subscriber growth came from India and China; growth slowed in many other markets, with Western and Eastern Europe being particularly slow. Countries such as France, Germany, Italy, Poland, Ukraine and the United Kingdom were all essentially flat or even in slight decline
John Dinsdale from TeleGeography Research, said: "Broadband subscribers at the end of Q1 2009 in the Middle East were at 12 million - a four per cent growth from Q4 2008 and a 25 per cent growth from Q1 2008. Globally, broadband subscriptions during the quarter were at 14 million, in line with Q4 2008 additions. China accounted for 30 per cent of global growth, while the United States was the only other country to add more than one million subscribers in the quarter."
However, the Middle East did have to catch up in the telecom service provider segment, Dinsdale said. "Of the world's top 20 telecom service providers, none are headquartered in the Middle East, and Saudi Telecom (STC) was the only one closest to joining the list."
The top 20 global service providers generated $251 billion (Dh921.1bn) in revenues during the first three months of 2009, three per cent up on Q108, but one per cent down on Q408. Even the top 10 telecom technology vendors saw revenues down by five per cent from Q108 as they generated $59bn during the quarter. This is a 15 per cent drop from the last quarter.
"Many may see this as bad news, but reaction ought to be tempered in the light of the cyclical nature of the market; the final quarter of any year tends to be the biggest quarter for sales and there is often a drop-off experienced in the first quarter of a new year. That said, in 2009 the global recession has clearly affected the market," Dinsdale said.
The global telecom service market is experiencing a gradual slowdown in growth, caused not by the world economy but by near saturation in many well-developed markets. The growth in this market has been more than six per cent but TeleGeography forecasts that growth will fall to an average 3.5 per cent over the next five years.
"Against this backdrop, the three per cent year-on-year revenue growth for the top 20 service providers can be seen as too sharp a fall, happening too soon. It should also be noted that the three per cent growth is bolstered from mergers and acquisitions, and is not just organic growth. The best organic growth performance came from China Mobile, Vodafone and America Movil," he added.
Set against the longer-term trends the quarterly growth for wireless and broadband subscribers were a bit on the soft side, but they are still reporting decent growth despite a trying global economic environment.
The biggest hit in the quarter was clearly on the telecom equipment vendors, which have been hit with a triple whammy of reduced spending by consumers, service providers and enterprises alike.
China's Huawei, India's RIM, and the Korean Samsung and LGE had at least some cause to be pleased with their Q1 revenues, while Nokia, Cisco, Motorola and Alcatel-Lucent will be struggling to take any good news from theirs.
Bottom of the class Nortel, meanwhile, dropped out of the Top 10 ranking altogether.
By Nancy Sudheer
© Emirates Business 24/7 2009
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