Feb 26 2013
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Kuwait: Mobile operators target 4G business
The launch of 4G long-term evolution (LTE) services in Kuwait has sparked a wave of increased activity among mobile operators as they move to attract new business in what is already a fiercely competitive telecoms market.
All three of Kuwait's mobile operators - the government-owned company Viva, Kuwait-based Zain and Wataniya, which became a subsidiary of Qatar Telecom in 2007 - have begun rolling out the long-awaited 4G services that promise unprecedented high-speed transfer of data.
A lack of telecoms infrastructure meant the launch of 4G services in Kuwait has taken longer than many anticipated. However, with much of the infrastructure now in place, the market for 4G services is seen as ripe for development, buoyed by new generations of smartphones that are expected to increase both consumer demand and operators' capabilities.
Operators are expected to focus on value-added services in their efforts to remain competitive, with internet services widely viewed as a major growth market. Internet take-up in Kuwait is increasing rapidly, with the number of subscribers hitting 1.9m, or 67% of the population, in 2012, according to QualityNet, a local internet service provider. This is up from 150,000, or 5.8% of the population, in 2000.
However, the delay in roll-out dampened any hopes the firm might have had of gaining an advantage in the market. The Kuwaiti Ministry of Communication only announced its plans to offer 4G LTE mobile broadband licences in October 2012, effectively levelling the playing field for the other two mobile operators. The ministry said in October that all three operators would be able to launch the services through their frequency ranges within 1800 MHz after purchasing licences for KD250,000 ($888,447). It added that frequencies would be reallocated to ensure a more even distribution among the three companies, effectively signalling the end of Zain's dominance.
The ministry's announcement heralded the beginning of the battle for control of the 4G market, prompting the launch of several new services and devices.
Zain announced in late January that mobile users would be able to use 4G services on their iPhone 5 devices following an update from Apple. The news followed a move by the company in November to introduce 4G LTE broadband routers.
In a deal marking the first of its kind between two Gulf operators, Viva said it had teamed up with Saudi Telecom Company (STC) to launch a 4G roaming data service, providing customers with a facility to use high-speed services in both Kuwait and Saudi Arabia.
Wataniya, meanwhile, is giving customers the opportunity to participate in the test phase of its 4G LTE network at various retail locations in a bid to gain feedback and consider how it can improve the service. The new service is expected to be launched commercially in the first half of 2013.
Competition for business among Kuwaiti telecoms companies looks set to remain high in the coming years as the three operators step up their efforts to boost revenues in an increasingly tight market. In the medium term, the roll-out of high-speed mobile broadband and access to 4G LTE services should provide plenty of opportunities for operators to source customers who are keen to make use of a growing number of new services.
© Oxford Business Group 2013
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