The UAE' s telecom market generated $6.1 billion in service revenue in 2009, according to a new report from Pyramid Research , "UAE: Fiber Deployments Will Boost Uptake of Pay-TV and VoIP".
Broadband penetration in the UAE, at 18.3 per cent, is already the highest in the region, said the report, which was part of the Africa & Middle East Country Intelligence series, by the US-based research firm.
"Since the market has now caught up with those of the developed world in terms of service penetration, it can look forward to healthy but not dramatic growth between 2010 and 2015, during which we expect total revenue to increase at a CAGR [compound annual growth rate] of 2.5 per cent," it said.
The report predicted that broadband's continued growth will help the UAE generate $1.01 billion in revenues in 2015, up from $695 million in 2010. This is in sharp contrast with other African and Middle Eastern (AME) countries, it added.
"The fastest growth segments will be broadband Internet and mobile data, although mobile voice will remain the single largest contributor to total revenue," said the report's author, Hussam Barhoush.
"A key change over the next five years is the switch from copper to fibre fixed-line infrastructure that is currently underway and due to be completed by 2011.
As well as providing a boost to broadband revenue, the change will enable significant growth in the pay-TV and fixed VoIP sectors for the first time," he said.
Etisalat's share of the fiber-to-the-home (FTTH) network is expected to remain larger than du's, with a predicted revenue share of 74.1 percent in 2015, albeit down from 77 per cent in 2010.
On the mobile front, du is more of an equal rival to etisalat, said the report, adding that its share of mobile subscribers in the UAE will increase from 32.6 percent in 2009 to 47.6 percent in 2015, the report said.
However, "Du's lower ARPU [average revenue per user] means that its revenue share will not grow in proportion," said Barhoush.
The current economic slowdown is unlikely to affect the telecom sector as "it has proved surprisingly resilient", said the report.
"Other markets, such as real estate, have not significantly affected the telecom market," said Barhoush. "Telecom operators reported positive results on the financials front, and we expect the market to continue to grow."
The Pyramid Research report predicted that the main focus of vendors will center on content and applications for both fixed and mobile services, as well as high-end handsets.
The UAE's Telecommunications Regulatory Authority last week revealed that it granted Al Yah Advanced Satellite Communications Services a 10-year satellite services licence, and Star Satellite Communications Company a 10-year satellite and broadcasting services licence, effective July.
By Abdul Wasey
© Emirates 24|7 2010
