According to a recent report by the research firm Analysys Mason, telecoms revenue from the Middle East and North Africa regions will increase at a compound annual growth rate (CAGR) of five per cent from 2012 to 2017.
The increase in revenue in these two regions will be lead by growth in mobile data services. As per Analysys Mason?s report titled ?The Middle East and North Africa telecoms market: trends and forecasts 2012?2017,? telecom revenue will increase from $70.3 billion in 2011 to $96.4 billion in 2017. The fastest growing segment during the forecast period will be mobile data services, with the handset data revenue set to grow at a CAGR of 17.9 per cent between 2012 and 2017.
However, the growth rate in subscriber numbers will continue to decline, as will the prices of voice services.
As per the report the penetration rates of active SIMs in Morocco, Saudi Arabia and the United Arab Emirates (UAE) already exceeds 100 per cent of the population, and will surpass 100 per cent in Algeria in 2012 and Egypt in 2014. The report says that new subscribers will have low incomes and usage, and are therefore very likely to opt for inexpensive plans and offers. 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.
Roz Roseboro, principal analyst, Middle East and Africa research programme, Analysys Mason, says, ?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. Because the growth in subscriber numbers is declining, 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 estimates that the number of 2G connections will peak in 2015, and at that 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 only 10 per cent of SIMs by 2017, and 4G SIMs will not debut in Egypt and Morocco until 2013 and 2014 respectively.
The report states that ARPU within the region generally correlates to gross domestic product (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. In Egypt which has the lowest GDP, ARPU stood at $5.5 in 2011.
Roseboro, explains, ?ARPU has declined from $15.3 per month in 2009 to $12.5 in 2011. This decline will level off towards 2017, when it will be $11.0 in 2016 and $10.9 in 2017.?
According to the research firm, the number of broadband connections increased between 2009 and 2011 from 15 million to 28 million. The report estimates that the number of broadband connections will nearly double by 2017. Of the total connections, 69 per cent will be mobile-based.
The report further states that mobile will continue to dominate the voice market in the Middle East and North Africa 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, which increased to 86 per cent by 2011. This is expected to increase to 91 per cent by 2017.
According to Analysys Mason, the growing dominance of mobile is also reflected in the split of voice traffic volumes. From 2008 to 2011, the fixed traffic declined at a CAGR of 4.3 per cent and will continue to decline at a CAGR of 2.4 per cent between 2012 and 2017. In comparison, the volume of mobile voice traffic increased at an average of 19 per cent per year between 2008 and 2011, and will continue to increase at a CAGR of 5.8 per cent over the next five years. By 2017, 87 per cent of traffic will originate from mobile as compared to 79 per cent reported in 2011.
