Saudi Arabia’s ICT market is the biggest in the Middle East in terms of capital value and volume of spending,accounting for more than 70% of all ICT markets in the Cooperation Council for the Arab States of the Gulf (GCC). Growth in ICT spending is expected to increase, driven by strong demand for smartphones and high-speed networks. Underpinning future growth is also a government that regards ICT industry development as a national priority.

Today the fixed-line, internet and mobile markets in Saudi Arabia telecom have all been liberalized. In another move towards liberalization, three Mobile Virtual Network Operator (MVNO) licenses were put up for auction in mid-2013. Virgin Mobile Saudi Arabia launched MVNO services in September 2014, and Jawraa Lebara (Lebara KSA) did so in the following December. Since launching, the MVNOs have become firmly established with Virgin Mobile Saudi Arabia reaching one million subscribers in October 2015 and Lebara KSA announcing a partnership with Huawei to provide MVNE services to other telecom operators.

Competition in Saudi Arabia’s mobile market has increased significantly with both the introduction of MVNOs; along with a reduction in Mobile Termination Rates (MTRS). As a result, the pre-existing operators are all feeling the pressure and Saudi Telecom Company (STC), Mobily and Zain all reported profit losses during 2015.

The uptake of mobile broadband is pushing the broadband services market forward and it is also being driven by the increasing number of high tech projects which are strongly supported by the government. The government itself is making great progress in its own transition to digital technologies and there are a number of e-government services now available.

One example of an ambitious project underway in the kingdom is the Smart City named King Abdullah Economic City (KAEC), which will house around 2 million people and is expected to be completed by 2035.

Key telecom parameters – 2012; 2015

Sector	2012	2015
Subscribers to telecoms services (million): (e)
Fixed Broadband	2.5	3.3
Fixed-line telephony	4.8	3.5
Mobile phone	53.0	52.0

 

Key developments:

• The ICT sector contributes around 3% to the total GDP of Saudi Arabia and this amount has been rising over the past few years.
• The increase in competition from the introduction of MVNOs has had a beneficial effect on prices.
• In November 2015 STC announced it was making an offer to purchase the remainder of Viva Kuwait’s shares.
• Saudi Electricity Company (SEC) has a number of initiatives underway as it strives to develop Smart Energy solutions for the future.