MENA Telecom revenue booming
Telecoms revenue in the Mena region is expected to grow by 27 per cent, at a compound annual growth rate (CAGR) of 5 per cent, over the next five years to hit $96.4 billion in 2017 from $70.3 billion in 2011, a report said.
The fastest growth area during the forecast period will be mobile data services, with handset data revenue set to grow at a CAGR of 17.9 per cent between 2012 and 2017, according to the recently published research The Middle East and North Africa Telecoms Market: Trends and Forecasts 2012–2017 from Analysys Mason.
However, growth rates in subscriber numbers will continue to decline, as will mobile voice prices, the report said.
The penetration rates of active SIMs in Morocco, Saudi Arabia and the UAE already exceed 100 per cent of the population, and will surpass 100 per cent in Algeria in 2012 and Egypt in 2014.
The report argues that any new subscribers will have low incomes and usage, and are therefore very likely to chase deals. Operators in the region will be increasingly pressured to reduce their mobile voice tariffs in the face of over-the-top voice and messaging services.
“Given these declines, operators will look to increase the average revenue per user (ARPU) of their higher-value customer base by encouraging greater mobile data usage,” explained Roz Roseboro, Principal Analyst for The Middle East and Africa research programme.
“Because the growth in subscriber numbers is slowing, operators will also focus on retaining their customer base, although this will be difficult because the newer, lower-income subscribers tend to be less loyal than the established higher-end ones.”
The report predicts that the number of 2G connections will peak in 2015, at which point 3G and 4G connections will start to take over. Specifically, 3G will be the dominant network technology, reaching 192 million SIMs (43 per cent of all SIMs in the region) by 2017.
Even though 4G connections will grow at a CAGR of 122 per cent between 2012 and 2017, 4G will only account for 10 per cent of SIMs by 2017, and will not launch in Egypt until 2013 and Morocco in 2014, the report said.
Average revenue per user (ARPU) within the region generally correlates to GDP per capita. UAE has the second-highest GDP per capita, and the highest ARPU ($37 per month in 2011), which is nearly three times the regional average. The ARPU in the lowest-income country, Egypt, is lower than half the average (at $5.5 in 2011).
“ARPU has declined from $15.3 per month in 2009 to $12.5 in 2011,” explained Roseboro. “This decline will level off towards 2017, when it will be $11.0 in 2016 and $10.9 in 2017.”
The number of broadband connections grew strongly between 2009 (15 million) and 2011 (28 million), and the report predicts that the number of connections will nearly double again by 2017. Of these, 69 per cent will be mobile-based, added the report.
Mobile will continue to dominate the voice market in Mena because of limited fixed infrastructure, as well as the geography and demographics of the region. In 2009, 82 per cent of voice connections were mobile, increasing to 86 per cent by 2011. This will grow further to 91 per cent by 2017, the report said.
Mobile’s growing dominance is also evident in the split of voice traffic volumes. Fixed traffic declined at a CAGR of –4.3 per cent from 2008 to 2011 and will continue to decline at a CAGR of –2.4 per cent from 2012 to 2017.
In contrast, the volume of mobile voice traffic grew at an average of 19 per cent per year between 2008 and 2011, and will continue growing at a CAGR of 5.8 per cent in the next 5 years. By 2017, 87 per cent of traffic will be mobile-originated, compared to 79 per cent in 2011.
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