Apr 30 2012
|more articles from|
Saudi mobile market still offers growth
The increase in mobile revenue is also due to a continued increase in the number of post-paid subscribers due to increasing data use, and increase in business sector revenue due to strong private investment. The main catalyst is domestic subscriber growth in mobile broadband driven by LTE network expansion and the widespread adoption of smartphones and tablets.
Saudi operators still have pricing power because the market still looks like a profitable duopoly despite the entry of Zain in 2008. Zain has struggled to establish itself partly as a result of limited flexibility caused by its heavy debt burden. Fitch estimates that Zain only has a market share of 14 per cent, and its revenue share is lower at 9 per cent-10 per cent. Its planned financial restructuring will grant the company more financial flexibility; Fitch expects this to be carried out in Q2 2012. The restructuring will support the company's coverage in the market, and also improve its reputation after years of weaker performance. Zain is also to begin providing mobile phone number portability, mimicking the leaders.
Regulation risk may be rising, however, as CITC, the regulator, is considering awarding three MVNO licenses in the medium term. The regulator is considering the experience of other countries in introducing MVNOs into their markets, where they have bolstered competition to provide better-quality services at more favourable prices. This will mean more choice for customers, and better service coverage.
© Emirates 24|7 2012
© Copyright Zawya. All Rights Reserved.