GCC mobile users to hit 100m

The number of mobile subscribers in the Gulf Cooperation Council (GCC) countries will reach 100 million by 2020 from nearly 84 million last year, an increase of 18.76 per cent, a report released today said.

Mobile subscribers grew by an estimated 2.3 per cent to 84.2 million in 2013. The growth in mobile subscribers has been between 6.5 and 20.1 per cent in 2013 in all GCC countries except for Saudi Arabia, where stricter registration requirements, crackdown on illegal immigrants and cancellation of unidentified SIMS led to a decline in subscriber base, Global Investment House said in a report released on Wednesday.

GCC mobile subscribers have grown by compound annual growth rate (CAGR) of 10.4 per cent during 2008-12, driven by de-regulation, entrance of new players and economic growth.

With GCC mobile penetration at 177 per cent, growth in mobile subscription base is likely to mirror population growth rate. Qatar and UAE are likely to experience the highest growth in population as they prepare for soccer World Cup 2022 and World Expo 2020, respectively.
Profits of GCC telecom companies jumped 9.8 per cent to $8.63 billion (Dh31.67 billion) in 2013 compared to $7.86 billion (Dh28.95 billion) in the previous year.

Four companies witnessed a decline while eight recorded an increase in profitability/reduction in losses. Saudi Telecom Company was the largest driver of profitability growth in the sector. STC profitability was boosted by significant reduction in operating costs and strong profitability growth in its GCC operations (Saudi, Kuwait and Bahrain).

Global sees Etisalat’s average revenue per user (ARPU) rising substantially due to removal of foreign ownership on UAE’s inclusion in the MSCI’s Emerging Markets Index in May 2014.

“With UAE scheduled to be included in the MSCI EM index in 2014, and possibility of removal of foreign ownership restrictions, we can see multiple re-rating for Etisalat. In addition, hosting of World Expo 2020 in UAE will give impetus to economic growth which will be beneficial for telecom service providers. Etisalat will enter the well-diversified category, once acquisition of Maroc Telecom gets completed,” Global analysts said in the report.

Etisalat’s subscribers’ market share came down to 53.8 per cent in Q4 2013, Global said. But the UAE’s largest telecom operator has indicated that it is not willing to lose its market leadership position to du and thus is likely to resort to aggressive marketing and promotions.
 

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