Report

The Saudi Arabia Telecom Market is expected to register a CAGR of 3.40% during the forecast period(2024-2029).

The increasing demand from the young population supports the market, linked to rising technology use and expanding telecommunication services. The telecom business in Saudi Arabia is driven by the rising use of open-access models and 5G home broadband services.

Key Highlights
-Saudi Arabia is one of the most significant information and communications t wireless Internet, is predicted to be used more in the telecom industry throughout the forecast period, supporting the sector's expected growth during the forecast period.
-Saudi Arabia continues propelling investment in its telecommunication and digital infrastructure, functioning towards attaining the Saudi Vision 2030 initiative. Saudi Arabia's Communications, Space, and Technology Commission (CST) held an auction in early December 2022, where it allotted spectrum in the 2100MHz band for non-terrestrial network objectives. The auction was carried out as part of the effort by Saudi Arabia to cover rural and remote areas using advanced satellite technologies. STC secured both available spectrum blocks and, as the license holder under the auction terms, is required to build an Air-to-Ground network and provide the Kingdom with mobile satellite services. Such initiatives by the region would drive the studied market.
-Further, Saudi Arabia's ambitious investments in 5G are beginning to pay off. CITC (Communications, Space and Technology Commission) expects 5G and Wi-Fi 6E to increase their contribution to the country's GDP from USD 4.7 billion in 2021 to more than USD 18 billion by 2030. 5G is the launching pad required to accelerate the growth and deployment of rising technologies like Artificial Intelligence, IoT, cloud, and edge computing, with the possibility to transform the IT industry in various ways.
-According to a bulletin of the General Authority for Statistics, the rate of individuals using the Internet in Saudi Arabia jumped to 94.3 % in 2022. According to the data, the rate of individuals aged 15 years and above using the Internet increased to 94.3 %, an increase of 1.4 % compared to 2021. The rate of men using the Internet reached 95 %, while women stood at 93.3 %. Saudis constituted 93.6 %, while non-Saudis comprise 95.2 % of internet users. The percentage of households with access to the Internet was 96.5, and the percentage of families with a computer was 57.4. Such a huge rise in internet penetration in the region would drive the demand for telecom services in the Saudi Arabia region.
-The decline in employment opportunities, particularly in sectors heavily reliant on oil and related industries, has led to a reduction in household incomes and disposable incomes for a significant portion of the population in Saudi Arabia. As a result, many consumers have been made to reassess their spending priorities, leading to a potential decrease in the overall spending on telecom services, including mobile data plans, internet subscriptions, and value-added services.
-The decline in disposable incomes has also prompted many consumers to opt for more basic and cost-effective telecommunication packages, resulting in a shift away from higher-value and premium service offerings. This shift in consumer behavior may impact the average revenue per user (ARPU) for telecom operators. This can also be challenging for them to maintain sustainable revenue growth and profitability in the market.


Saudi Arabia Telecom Market Trends

Data and Messaging Services to Hold Significant Market Share


- Saudi Arabia's data and messaging services in the telecommunication market include the Internet and text messages from both the fixed and mobile networks, which is growing in Saudi Arabia due to the adoption of 5G services and fiber-based fixed Internet connection, among others.
- Telecom providers are forming partnerships, getting licensing agreements, expanding fiber and copper-based network infrastructure, and deploying 5G services in the country to support the increasing demand for data and messaging services.
- In terms of telecom connectivity, the Fixed Data Network contributes a significant portion of the country's Data and Messaging services, supported by the growth of fiber networks in the country during the forecast period. For instance, in February 2023, Dawiyat Integrated Telecommunications & Information Technology Co., an ICT infrastructure development company in Saudi Arabia, planned to build a fiber-optic network across the country, providing high-speed broadband services to reach remote areas with investments of USD 2.6 billion, showing the demand for fixed network-based data services in the country.
- According to GSMA Intelligence, 42.50 million cellular mobile connections were in Saudi Arabia at the beginning of 2023. Further, mobile connections amounted to 115.9% of the total population in January 2023. Between 2022 and 2023, the number of mobile connections in Saudi Arabia increased by 1.7 million (+4.1%). Such a huge rise in mobile connections would create lucrative opportunities for the studied market to grow.
- The digitalization of a business process, such as using internet-based services in BFSIs, Governments, Retail, e-commerce, Manufacturing, and Healthcare in the country, is creating a demand for telecom service providers' data services across industries and people to extend the digital services, which include internet data packages for both prepaid and post-paid data services in the country to support the customers' demand to access the online services.
- In addition, vendors in the market, including STC and Zain Saudi, are expanding their data and messaging service offerings packages to support the market growth in the country. For instance, in October 2023, Stc Group announced the expansion of its 5G network in the KSA by including the development of its current network to reach various regions of the Kingdom, providing greater capacity and better coverage5G network technologies to over 90 % of its locations in major cities of the country.


Mobile Network Segment is Expected to Hold Significant Market Share


- Mobile networks are wireless networks that use cellular technology and are supported by base stations that provide 3G, 4G, and 5G services. Mobile networks are mainly used for voice and data services and are becoming increasingly popular in KSA due to their convenience and portability. The mobile network segment in the Saudi Arabia telecom market is expected to witness significant growth in the coming years, owing to the increasing smartphone penetration, IoT devices proliferation, and growing demand among industries owing to enhanced digitization coupled with the momentum toward the digital economy in line with Saudi Vision 2030.
- Moreover, the widespread rollout of 5G services owing to the continuous efforts from the Communications and Information Technology Commission (CITC) and market vendors resulted in better call quality and internet speeds, thus, in turn, creating a high demand for mobile data services and mobile voice services. The growth in mobile penetration, coupled with the growing demand for mobile voice services, is expected to drive the market over the forecast period. For instance, according to the survey by ITU and OECD, the number of mobile broadband connections per 100 inhabitants in Saudi Arabia is expected to be 130.9 by 2028.
- The competitive mobile network sector in the Kingdom is serviced by major MNOs, namely Saudi Telecom Company (STC), Mobily, and Zain KSA. The MNOs have invested in upgrading LTE infrastructure and developing 5G services nationwide. This, in part, is aimed at generating additional revenue from mobile data services and their contribution to the Vision 2030 program. Further, the principal MNOs, Mobily, STC, and Zain, are driving a comprehensive ecosystem of technical, operational, financial, and commercial partnerships that are driving the growth in 5G deployments across the country, thus, in turn, benefiting the demand for the segment.
- Moreover, the country's rapid development of e-commerce services further drives the demand for mobile data services. As more and more consumers in the KSA turn to online shopping, the need for fast and reliable internet connections has surged. As a result, telecom companies in the region have had to invest heavily in improving their mobile networks and increasing bandwidth to meet this demand.
- The data and messaging services are analyzed to gain significant growth in the coming years owing to the growth in smartphone penetration coupled with affordable high-speed internet packaged offers by the major market vendors in the country. In addition, as more market vendors expand their 5G services across Saudi Arabia, the segment is analyzed to witness significant traction for high-speed and low-latency data services over the coming years.
- Such developments, coupled with growth in 5G deployment, increased mobile data consumption, growing IoT devices, and increasing internet and smartphone penetration, are analyzed to drive the demand for mobile networks for reliable and high-speed mobile data and voice services over the forecast period. In addition, the active participation of MNOs and CITC will significantly enhance the mobile network segment offerings in the coming years.


Saudi Arabia Telecom Industry Overview

The Saudi Arabia Telecom Market demonstrates a semi-consolidated landscape, featuring major players like Saudi Telecom Company (STC), Integrated Telecom Company (SALAM), Etihad Atheeb Telecommunications Company (GO), Zain KSA, and Etihad Etisalat (Mobily). These market participants are actively engaging in strategies such as partnerships and acquisitions to augment their service portfolios and establish sustainable competitive advantages.

In August 2023, Salam made a strategic move by selecting Oracle to drive 5G innovation throughout the Middle East. The company aims to replace its legacy systems with a comprehensive, modern stack by integrating Oracle Unified Operations, Oracle Cloud Scale Monetization solutions, and Oracle CRM Sales. This integration will empower Salam to offer distinct promotion bundles across diverse consumer segments. With automated orchestration, Salam anticipates expediting the introduction of new and existing digital services, such as AR/VR gaming, 5G-enabled streaming, and IoT-connected devices, thereby accelerating time to revenue.

In May 2023, Arabsat disclosed its collaboration with Loft Orbital to define the mission for future infrastructure in low earth orbit (LEO). This collaboration aims to design infrastructure catering to the diverse needs of Arabsat�s customers across various sectors.

Additional Benefits:

- The market estimate (ME) sheet in Excel format
- 3 months of analyst support