Telecom sector to see rise in M&A

Mobile operators have seen a surge in traffic used for internet-based services. (GETTY IMAGES)

Regulatory developments, advances in mobile technologies and continued investment in broadband infrastructure will be the highlights for the Middle East telecom markets in 2010.

According to the latest research by IDC (International Data Corporation), 2010 is a significant year for the Middle East as there will also be an increase in local and international mergers and acquisitions.

IDC expects economic recovery in the entire Middle East this year, with around three to four per cent year-on-year growth.

Qatar is expected to record a healthy year-on-year growth (nearly 20 per cent), primarily from strong natural gas exports.

The report said with broadband penetration at just three per cent, e-commerce participation in a few markets remains in single digits, as well, which may be due in part to a lack of relevant and local content, both in terms of language and local/regional context.

"The need for cost reduction will require collaboration tools and a host of bandwidth-intensive applications such as video conferencing, sales force automation, and mobile customer relationship management (CRM)," according to Deepika Dudeja Mital, Senior Analyst, Telecom, IDC Middle East, Africa and Turkey. "It will spur demand for bandwidth and smart access devices".

Mobile operators have seen a surge in traffic used for internet-based services such as social networking, location-based services, navigation/local search, instant messaging and other applications, and thus the revival of regional mobile handset markets will continue, with a rising share accounted for by smartphones.

As a result, the mobile operator environment is consolidating and large, well-funded global operators are seeing advantages to partnering with smartphone makers in product promotions – thus increasing data traffic on their networks.

With more content pushed through mobile services, one of the key developments in 2010 will be the need to alleviate resulting network strains, the research said.

Increasing usage of mobile broadband services will remain the dominant trend in developed Middle East markets. In Saudi Arabia, mobile broadband already seems poised to replace DSL as the technology most subscribed to for access to broadband services, but both services will co-exist and complement, as DSL and other cable-based broadband access technologies – such as fibre-to-home – can still serve better in delivering IPTV and video-streaming services.

E-government initiatives will drive growth in mobile payments, as well as additional partnerships between telcoms, solution providers, and governments for more innovative solutions in the mobile payment segment.

A number of incumbent operators have been investing in many next-generation networks.

"The market will see more innovation in terms of operations and product offerings due to high mobile penetration and an increased competitive environment," said Satish Meena, Senior Research Analyst, Telecom, IDC Middle East, Africa, and Turkey.

"And this will see telcoms? evolve from simple connectivity providers into providers of value-added solutions," added Mital.


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