Mohsen malaki program and consulting manager communications group idc cema
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Mohsen Malaki Program and Consulting Manager Communications Group IDC CEMA. Arabcom 2004 in Beirut, Lebanon June 16-17, 2004. MEA & Gulf States Telecom & Mobile. Trends and Outlook. Telecoms Services in MEA MEA is Small on a Global Scale….

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MEA & Gulf States Telecom & Mobile

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Mohsen Malaki

Program and Consulting ManagerCommunications Group

IDC CEMA

Arabcom 2004 in Beirut, Lebanon

June 16-17, 2004

MEA & Gulf StatesTelecom & Mobile

Trends and Outlook


Telecoms Services in MEAMEA is Small on a Global Scale…

Telecoms Services Spending by Region in 2002 (US$Bn)

CEE:

$30.6 Bn

WE:

$224.1 Bn

NA:

$325.2 Bn

AP:

$246.0 Bn

Gulf States

$14.5 Bn

MEA:

$41.4 Bn

LA:

$66.6 Bn

Gulf States: Saudi Arabia, UAE, Kuwait, Bahrain, Qatar, Oman, Iran

Worldwide Total: $934.5 Bn

Source: IDC, 2003


Overall Growth Rates Around the World…but MEA has the highest growth rate globally

Telecoms Services Spending

Compound Annual Growth Rate (CAGR) by Region (03-07)

9.4%

2.9%

3.9%

8.9%

4.9%

9.8%

7.4%

Gulf States: Saudi Arabia, UAE, Kuwait, Bahrain, Qatar, Oman, Iran

Worldwide Growth: 4.7%

Source: IDC, 2004


MEA & Gulf States: Strong GrowthHigh Growth in Fastest Growing Regions

$80

$70

CAGR (03-07): 9.8%

Total MEA

$60

$50

CEE

CAGR (03-07): 9.4%

USD Billions

$40

$30

Gulf States

$20

CAGR (03-07): 8.9%

$10

2002

2003

2004

2005

2006

2007

Source: IDC, 2004


Gulf States Market Size by ServiceVoice Goes Mobile, Data picks Up

Telecoms Service Spending,

2003-07 ($Bn)

  • Weakness in telephony

  • Voice goes mobile

  • Data services picking up in fixed-line market

  • Internet is becoming essential

  • Broadband is beginning to take off in smaller states

  • From $14.5bn to $24bn total spending between 2002-2007

Source: IDC, 2004


Smaller Gulf States

Under-penetrated Markets

Selected MEA Mobile MarketsA Comparative View

Mobile Penetration End 2003

  • Smaller Gulf States are MEA’s Leading Markets

    • Approaching subscription saturation

    • Drives operators to upgrade networks and launch new (data) services

    • Operators working on customer loyalty, increasing ARPU/ASPS

  • Less-developed markets

    • Now entering growth surge

    • Focus on coverage, voice services, rapid pre-paid expansion

Source: IDC, 2004


End User Spending on Mobile ServicesShifting Toward Mobile Data

Gulf States Mobile Spending on Voice and Data Services, 2002-2007 ($ Bn)

Data Spending

Grows Faster Than

Voice

31%

26%

Data as %

of Total

21%

Voice Spending

Growth Slows

17%

13%

4%

Data Spending includes SMS, MMS, data traffic, content

Source: IDC, 2003


Impact On Mobile Equipment MarketOpportunities in Both 2G and 2.5G Equipment

  • Saudi Arabia, Iran, Oman still have huge amount of 2G investment ahead of them (coverage, capacity, 1 new licensee in each during 2004)

  • The most-developed markets are repositioning investment

    • These markets are steadily increasing 2.5G capacity (incl. GPRS, EDGE in Kuwait & Bahrain) and services (MMS)

    • Limited commercial launch of UMTS in UAE & Bahrain, but will be slow to grow in Gulf-- unless there is a sudden success story in UAE/Bahrain or West Europe


Fixed-to-Mobile SubstitutionTraffic is migrating now, displacement soon…

Fixed and Mobile Penetration End 2003

  • High-Penetration Markets

    • Mobile substitution -- puts downward pressure on fixed telephony (traffic, connections)

    • Revenue deterioration in fixed-line telephony

    • Efforts to expand other services (MDNS, BB) bearing fruit

  • Low-Connectivity Markets

    • Matter of time before same effects in Iran, Oman, KSA

    • Fixed-line operator must act now: cut fixed-line OPEX, improve service quality, focus on data, fixed-mobile Convergence

    • Leverage carrier services in liberalized market

Source: IDC, 2003


Expectations for 2004Liberalization in some, Service Evolution in Others

  • Iran:

  • 1 GSM Operator License, 2nd?

  • Launch of prepaid GSM

  • Regulator introduced

  • Introduction of BB DSL

  • Incumbent investing in data network, mobile coverage, fixed line expansion

  • Kuwait:

  • Introduction of EDGE

  • Competition moves to MMS and mobile data services

  • Operators continue investing abroad

  • Qatar:

  • QTel launches data center and related services

  • Introduction of MMS and mobile data services

  • Bahrain:

  • GSM Competition’s 1st year

  • Liberalization of IA, data

  • Regulatory: LLU, NP

  • Saudi Arabia:

  • 1 GSM Operator License

  • 2 Data Infrastructure & Services Licenses

  • Incumbent focuses on mobile coverage, customer loyalty (CRM), sales channel strategy, carrier services & interconnection

  • Oman:

  • 1 GSM Operator License

  • Reorganization and privatization of incumbent

  • UAE:

  • Etisalat introduces UMTS

  • Testing new mobile data services for enterprise and consumer

  • BB picks up, Etisalat focuses on SME BB penetration


IDC’s Gulf States CoverageConsulting and Advisory Services

  • Advisory Services

  • MEA Telecommunications CIS Subscription Service

  • MEA IP Services CIS Subscription Service (Planned 2005)

  • Upcoming Studies:

    • Gulf States Mobile Communications Services 2004-2008 Forecast

    • Gulf States Data Communications Services 2004-2008 Forecast

  • Consulting Services

  • IDC’s Wireless and Mobile/NGN Expertise Centers provide:

    • Market sizing, analysis, segmentation

    • Business plan development

    • Rating Potential Partners, implementing Partnering Initiative

    • Go-to-Market, Market Entry


Thank You

Mohsen Malaki

Program and Consulting Manager

Communications Group

IDC CEMA

E-mail: mmalaki@idc.com

Tel.: +420 221 423 140


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