Saudi Arabia: LTE and Fiber Rollouts Boost Operators and Vendors

Summary The Saudi Arabian telecom market generated $16.7bn in service revenue in 2012. We expect growth to continue over the next few years, at a CAGR of 4.2% from 2012 to 2017 to reach $20.5bn in 2017. The commercial launch of LTE services is predicted to be a significant driver of mobile data consumption, along with the widespread adoption of smartphones, and part of the reason for the growth trend. Key Findings The Saudi Arabian telecom market generated $16.7bn in service revenue in 2012. We expect growth to continue over the next few years, at a CAGR of 4.2% from 2012 to 2017 to reach $20.5bn in 2017. The commercial launch of LTE services is predicted to be a significant driver of mobile data consumption, along with the widespread adoption of smartphones, and part of the reason for the growth trend. From 2012 to 2017, we estimate that mobile data revenue will nearly double to reach a total of $5.3bn, a sum that is more than half of anticipated mobile voice service revenue generation in 2017 ($10.5bn). While the market will continue to lean heavily toward mobile data consumption, we still expect mobile voice services to sustain a CAGR of 1.6% through 2017. The fastest growth segment will be fixed VoIP (41.6% CAGR for 2012-2017) thanks to the expansion of IP-based networks, although total revenue comes from a very small base and will be limited to $233m by 2017. We project broadband Internet to grow at a compound rate of 7.4% from 2012-2017, leading to strong revenue of about $1.9bn. Fixed circuit-switched voice will climb to $2.3bn in revenue in 2017. While pay-TV revenue is projected grow at a 16% rate, fiber-backed IPTV will be the emerging source of growth and surpass DTH revenue in 2017 with revenue of $135m. Synopsis NA