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Subscriptions on the rise in Kuwait over 2011

 There was a significant surge in mobile subscriptions in Kuwait during Q211...

There was a significant surge in mobile subscriptions in Kuwait during Q211, according to BMI. Based on data from Zain and Wataniya, there were net additions of roughly 205,000 subscribers - or growth of 4.9% q-o-q to reach 4.696mn subscribers - considerably higher than average quarterly growth rate of 2.4% recorded in the 12 months to March 2011.

Zain accounted for majority of new subscribers with 64.9% market share of total net additions in Q211. Wataniya had an estimated share of 22.9% of net additions while Viva had 12.2%. The operators and the MoC have not provided an explanation for the strong subscriber growth in Q211, although it may not be unconnected to the influx of foreign workers and visitors into Kuwait following political instability in many countries across the region.

Mobile penetration is expected to reach 169% by the end of 2011 and 187.2% by 2015. In September 2011 Kuwait's Partnerships Technical Bureau (PTB) awarded a contract to a consortium, led by KPMG, to consult on upgrading the country's communications network. The investment will be KWD1.5mn (US$5.4mn) over a 15-month period. According to the MoC, the project is a prelude to a tender for the upgrade and expansion of the incumbent's fixed network infrastructure.

Meanwhile, the dispute between the MoC and Kuwait's ISPs seems to be escalating, with the ministry disclosing it intends to issue licences to new companies and network operators to provide internet services. The ministry and the major ISPs have been at loggerheads over broadband pricing for many years. The award of new operating licences, if confirmed by the government, will be the latest attempt to drive down internet tariffs in the country. In August 2011 the ministry agreed to reduce taxes on ISPs by 42% and expects the same measure of cuts to be applied to internet tariffs.

However, the ISPs were quick to point out that while taxes are cut by 42%, other costs will not fall by the same amount and therefore a commensurate drop in internet tariffs will hit revenues and profits. According to sources cited by Al- Qabas, the ministry hopes the new measure will break the dominance of some ISPs in the market. BMI believes ISPs such as QualityNet, which claims to have a market share of 45% in the internet sector, are the main targets of the ministry. QualityNet and other major ISPs have attributed the high cost of internet services to the lack of competition in the fixed-line segment.

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