Middle East mobile penetration exceeds that of USA

Qtel is on the acquisition offensive

The number of mobile subscriptions in the Middle East will cross the 250-million mark during 2012, as mobile penetration tops 100 per cent.

With subscriptions reaching 271.27 million at end-2012 and rising to 352 million at end-2016, the mobile penetration rate will rise from 97.72 per cent at end-2011 to 107.09 per cent at end-2012, exceeding the mobile penetration rate in North America for the first time.

The stats come from Informa Telecoms & Media and indicate that Iran will continue to be the biggest mobile market in the Middle East by subscriptions with 82.91 million subscriptions forecast for end-2011, rising to 122.13 million at end-2016.

Saudi Arabia has the next biggest mobile market in the region by subscriptions, with a 50.8 million active mobile subscriptions forecast for end-2011, rising to 71.32 million at end-2016.

“The impact of competition, the availability of new data-based services, increasing affordability and population growth will all contribute to the continued rise in mobile subscription numbers in the Middle East in the coming few years,” said Matthew Reed, head of mobile research for the Middle East and Africa at Informa.

“However, the rate of growth in mobile subscriptions in the Middle East will slow over the coming years. The markets have become tougher as they have become more competitive and mature, and operators have been seeking to cut costs where possible; put more effort into customer retention; and focus more on the main clear growth area, which is data services.”

Despite the take-up of smartphones and, to a lesser degree, mobile broadband in some parts of the Middle East, data services only account for a relatively small proportion of mobile revenues in the region overall. Data accounted for 13 per cent of mobile revenues in the Middle East in 2Q11; the lowest percentage for any major world region other than Africa.

But, according to Reed, this low figure also points to the growth potential for data in the region. Iraq and Iran, both of which are substantial markets, have yet to introduce 3G networks, for example.

In the UAE, smartphone penetration is already high and will continue to rise further: The smartphone penetration rate in the UAE is forecast to be 47.23 per cent at end-2011 and to rise to 70.35 per cent at end-2016. In Saudi Arabia, the smartphone penetration rate is set to rise from 25.01 per cent to 48.63 per cent over the same period.

And while some countries in the region do not yet have 3G services, all three of Saudi Arabia’s mobile operators have unveiled LTE services. Etisalat is also poised to launch LTE in the UAE. However, Reed believes it will take some time for LTE to gain momentum and LTE subscriptions in the Middle East will number only 1.94 million at end-2013 but will reach 15 million at end-2016.

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