New Q310 information on the telecoms markets of Qatar and the UAE is now available, and the results, while mixed, indicate positive growth and a bright outlook for the future.
Qatar’s telecoms market witnessed strong growth in 2009 as a result of new competition in the mobile market, and the first half of 2010 indicates that the trend will continue across the rest of the year. Subscriber numbers rose by almost 50% in 2009, improving drastically on 2008’s year-on-year increase of 33.1%. This growth comes despite penetration rates of over 150%, and is largely attributed to the advent of competition to Qtel in the form of Vodafone Qatar.
Qtel’s monopoly has certainly been shaken, with the incumbent operator reporting falling ARPUs that hit QAR123.2 at the end of 2009 – its lowest figure for the past two years. Vodafone Qatar has not publicised ARPU statistics.
In December 2009, Qtel launched free mobile internet access for postpaid subscribers in conjunction with Nokia, which offers free data downloads to owners of certain Nokia handsets. In addition to this, it launched an instant mobile broadband service for prepaid subscribers in the same month.
Although this effort to drive broadband adoption is expected to increase growth, Qtel has been criticised for its broadband tariffs, which are the highest in the region – indeed, they are among the highest in the world. Despite this condemnation, Qtel are unlikely to lower their prices, claiming that they are justified due to the cost of connecting to the backbone.
Qtel may have to rethink this stance to compete with Vodafone Qatar, which had seized a 14.3% share of the market by the end of 2009 – largely through competitive tariffs. While this cannot continue indefinitely, the operator is hoping to attract new customers with the introduction of non-voice features for mobile broadband.
In addition to this, the second-place operator is looking to court the lower-income bracket by offering low-cost internet-enabled handsets, as well as offering BlackBerry handsets to cater to the corporate sector.
In the UAE meanwhile, the Telecommunications Regulatory Authority has released year-end 2009 figures for all sectors (mobile, broadband, fixed-line & internet), as well as announcing that it will be at least three years before a third operator is licensed.
As the TRA only registers active subscribers (with a cut-off period of 90 days) in its statistics, the final subscriber figure for 2009 was 10.672m – a significant drop in growth over the 2008 (in 2009 and 2008 growth rose 14.5% and 34.5% respectively).
A major contributor to this drop was the exodus of expatriate workers following Dubai’s financial crisis – a significant amount of the UAE’s population consists of expatriates working on fixed-term visas. In addition to this, market saturation has played a part, with penetration rates soaring past 200%.
On a more positive note, 3G is on the rise, with major UAE operator du looking to expand its 3G mobile broadband network. The operator is hoping to secure funds from its shareholders, with a target figure of AED1bn (US$272m). The leading operator Etisalat is also moving mobile broadband – and accompanying services and applications – to the forefront of its strategy.
Internet subscriptions are growing steadily, rising 17% year-on-year in 2009, with a final figure of 3.3 million. While the UAE has relaxed its VoIP regulations so that services such as Skype can function in collaboration with a licensed VoIP operator, this is unlikely to have an immediate impact on the broadband market.
Increased competition has caused a 31% fall in broadband prices, and future growth is looking ever more likely following infrastructure sharing agreements between two of the UAE’s largest operators – Etisalat and du – as well as investment in network expansion. The year-end figure for broadband subscribers in 2009 was 690,000, which equates to a 15% penetration rate. This is forecast to rise by almost 10% in the next 4 years.