PRAGUE, Czech Republic-The Saudi Arabian mobile market is set to experience tremendous growth this year, according to a recently published study by IDC. The growth will be fueled by strong pent-up demand from a large underpenetrated market as well as a new mobile carrier entering the market next year, said the firm.
The launch of mobile prepaid services to the market in 2002 fueled expansion of mobile service subscriptions in the country, according to the study, “Saudi Arabia Mobile Communications Services Forecast and Analysis, 2002-2008.” Growth in subscriptions was accompanied by rapid growth in voice traffic. However, value-added services have lagged behind voice traffic because the incumbent operator, Saudi Telecom, has been slow to introduce and market the services, said IDC.
“Due to the impending liberalization of the mobile-services market, the incumbent Saudi Telecom is expected to focus on retaining and expanding its market share through streamlining of costs and improvement of service offerings, and targeted tariff reductions,” said Mohsen Malaki, senior analyst in the Telecommunications Group at IDC CEMA. “This will be balanced with better understanding and segmentation of the customer base and continued expansion of direct and indirect sales and distribution channels for both contract and prepaid subscriptions.
“The new entrant is likely to leverage the expected high subscription growth rate in the early years of its launch by endeavoring to attract a large number of new customers via prepaid services,” continued Malaki. “The new entrant will also attempt to churn high-spending subscribers from Saudi Telecom in order to avoid being pigeonholed as a low average spending per subscription (ASPS) operator.”
Malaki said, however, that the new entrant likely will not be able to offer national roaming, so it will have to focus on building out its infrastructure rapidly to expand its coverage map so it can attract high-end subscribers away from the incumbent.
