13.6 Million Internet Users in the Kingdom
53.7 Million Mobile Subscriptions at the end of 2011
The total number of mobile subscriptions grew to around 53.7 million at the end of 2011, with a penetration rate of 188%. Prepaid subscriptions constitute the majority (over 87%) of all mobile subscriptions.
Fixed telephone lines stood at 4.63 million at the end of 2011, of which around 3.3 million, or 71%, were residential lines. This represents a household teledensity of around 69.3% and a population teledensity of about 16.2%. This is slightly lower than the world average of over 17% but is higher than the averages in the Arab world and in developing countries.
It is clear that the rate of demand for fixed line service has been relatively stable since 2004. The main reason is the rapid spread of mobile telecom services due in part to the ease of subscription and the gradual decrease in prices. This has led to a lower number of requests from consumers for fixed services. However, the demand for fixed services, especially in major cities, is expected to grow as a result of growing demand for broadband services, especially for fiber optic network (FTTx) services.
Internet penetration increased at a high rate during the past years from 5% in 2001 to about 47.5% at the end of 2011. The estimated number of Internet users in the Kingdom is now 13.6 million. The significant growth in the availability of high-speed broadband services and applications, continuing decline in the prices for devices and services, and significant usage of electronic transactions (banking, commercial and government) have stimulated the growth of Internet services. It is expected that the demand for Internet services will increase significantly in the next few years due to the availability of optical networks (FTTx) at very high speeds, especially in large cities at first, growing Internet content and the spread of handheld smart devices and applications.
Mobile Broadband Subscriptions at 11.3 Million at the end of 2011
Fixed broadband subscriptions including ADSL, Fixed Wireless (WiMAX), FTTx and other fixed lines grew to around 1.95 million subscriptions by the end of 2011. The fixed broadband penetration rate was about 33 % of households.
Total mobile broadband subscriptions reached 11.3 million at the end of 2011, representing a penetration of 39.6% of the population. The mobile broadband market continues to gain momentum in the Kingdom. The key reasons for this growth are vigorous competition, a healthy expansion of smart phones, and offers of various data packages by the mobile operators. It has become easier to access the Internet via mobile devices such as smart phones. The mobile networks are also improving as 3.5G technology (HSPA) continues to be deployed and as new 4G wireless broadband technologies emerge over the next few years.
It should be noted that in calculating the number of subscriptions, CITC has adopted the new methodology recommended by ITU in early 2011. This allows for inclusion of combined voice and data subscriptions at broadband speeds. As a result, the broadband subscription and penetration totals for 2011 are substantially higher relative to those reported previous years.
Studies indicate that broadband services will be the main driver for the growth of telecommunications and information technology in the coming years and an important source of income for the sector. The opportunities for deployment of broadband networks in the Kingdom are good in the immediate future, especially for fixed wireless and mobile networks, to meet increased demand for broadband services and applications. The gap in the penetration of broadband services in the Kingdom is still large compared to the developed countries. The objectives of the Ninth Development Plan of the Kingdom include "the pursuit of a knowledge-based economy through the application of electronic transactions and the dissemination of use in all regions of the Kingdom". Therefore, in order to achieve this objective and to facilitate the flow of information, there is a great need for high-speed and high-quality broadband networks at reasonable prices to be made available in the Kingdom.
Spending on ICT Services at SR 83 Billion in 2011
CITC estimates that the volume of spending on the ICT services is up to SR 83 billion in 2011 compared to SR 21 billion 2002, an average annual growth rate of about 14%. The spending on information technology is around 30% of the total, mostly concentrated on hardware and IT services.
The spending on ICT products and services is expected to grow by more than 10% in 2012, driven mainly by expected strong growth in demand for smart phones, high-speed networks and interactive applications resulting from strong growth of investment in the sector, and implementation of government projects, all of which will lead in turn to the growth of support services in the sector.
The ICT market in the Kingdom is the biggest in the Middle East in terms of capital value and volume of spending, and it accounts for more than 68% of the GCC ICT market. The capital investment of more than SR 125 billion in the past ten years is due to industrial diversification in the Kingdom and has led to increased demand for software, equipment and services that make up the fastest growing sector in the ICT market.
ICT Contribution to the National GDP is Estimated at 3%
The growth of capital investment, development and expansion and of ICT networks have significantly contributed to the national gross domestic product (GDP). This has been the result of liberalizing the telecommunications sector and opening the markets to competition, which in turn has attracted investments and growth of the sector.
The deployment of modern technology and availability of applications have the positive effect of raising the efficiency of other economic sectors as well. The growth in GDP in 2011 was SAR 2.1 billion or about 7%.
According to CITC estimates, the contribution of the ICT sector is around 3% and has been rising over the past three years. If, however, the oil and mining sector components of the GDP are excluded, it is estimated that the ICT contribution to the national GDP was up 6% in 2011. Studies also show that there is a direct correlation between the availability of broadband services and the rate of growth in GDP. It is estimated that a 10% increase in the availability of broadband services could result in growth in GDP of between 1.2% and 1.3%.
Telecom Services Sector Revenues at US $22.4 Billion at the end of 2011
Telecom services revenues in Saudi Arabia have been steadily growing at a CAGR of around 12.8%, increasing from about SR 20 billion (US $5.3 billion) in 2001 to SR 65.7 billion (US $17.5 billion) in 2011. Figure 7 tracks the overall revenue growth, including both fixed and mobile services revenues, over the eleven-year period 2001-2011. Mobile services revenues represent about 80% of all telecom sector revenues in the Saudi market. In addition to revenues from the domestic market, investment by licensed Saudi telecom companies in foreign telecom markets have led to a rapid growth of revenues for the sector from foreign operations, from SR 455 million in 2007 to around SR 18.2 billion (US $4.85 billion) in 2011. Domestic revenues, however, still represent over 78% of the total telecom sector revenues of SR 84 billion (US $22.4 billion) in 2011.
The Performance of Mobile Operators in KSA During the year 2011 was Within the International Standards
The analysis of quality of service indicators by CITC shows that the performance of mobile operators during the year 2011 was within the upper limit of 2% for the call success and call drop rate indicators. These two indicators are a means of checking the ability to make and maintain a continuous call without being dropped during the connection.
The analysis also shows that the performance of operators was within limits with regard to the quality of service indicator to answer 80% of customer service calls within 60 seconds of the request to speak to an agent.
In addition to quarterly reports submitted by the operators, CITC monitors the operators' performance through extensive drive testing throughout the Kingdom, covering over 50 cities, towns and major highways. The results from those drive tests were in-line with the comparable indicators from the operators' reports. The average Rx level (or measured signal strength) for the three mobile operators was -75dBm, which indicates very good average signal strength for mobile calls in the Kingdom, meaning clear and reliable calls. CITC also communicated with the operators to rectify any situations showing a decline in the level of service.
International Internet Bandwidth
The total capacity for the international connectivity of the Internet in 2011 was about 440 Gbits/s compared to 318 Gbits/s in 2010.
Saudi Arabia Ranked 41st in the UN E-Government Survey 2012
According to the United Nations E-Government Survey 2012, Saudi Arabia has achieved notable performance in expanding citizen-centric services, raising its global ranking from 58th in 2010 to 41st in 2012.
The principle goals of the Saudi e-government offerings are to raise the productivity and efficiency of the public sector, to increase the return on investment in ICT, and to provide easy-to-use, timely and accurate citizen services. A separate e-payment portal has been developed through which citizens are able to handle all online transactions.
The survey also indicated that a big development in Saudi e-services is the e-Dashboard portal, which verifies the identity of the citizen (digital verification) and serves as a single signon portal where citizens can access all the services provided. The Saudi Government also offers an Open Data Initiative which provides citizens with all publicly available documents and reports from ministries and government agencies. It encourages e-participation to gather public opinion through surveys, public consultations and blogs.
Universal Service Fund Provides Services to 482 Towns and Villages in its Pilot Project
The Universal Service Fund (USF) has received all targeted localities in the Pilot Project from the USF Service Provider for this project, Etihad Etisalat "Mobily". The aim of this project is to provide mobile voice services and broadband Internet services with a minimum speed of 512 kbits/s in the Khulays and Al Kamel administrative areas in Makkah region and in the Al Mahd administrative area in Madinah region. Beneficiaries from this project are more than 103,100 people in 482 towns and villages.
The USF is currently conducting the necessary field inspections to ensure fulfillment of the conditions, technical specifications and other contractual requirements, in preparation for the final acceptance of the project and the official launch of services in those localities.
The USF is also currently implementing Projects 2, 3 and 4 included in the First and Second Operational Plans. More than 890,400 people in 3,415 localities belonging to 25 administrative areas will benefit from these projects. The USF intends to tender its Projects 5 and 6 in the Third Operational Plan (1433/1434H corresponding to 2012G) during the first half of this year.
World Radiocommunication Conference sets Future Course
The World Radiocommunication Conference 2012 (WRC-12 concluded its deliberations on 17 February with the signing of the Final Acts that revise the Radio Regulations, the international treaty governing the use of radiofrequency spectrum and satellite orbits.
Over 3000 participants, representing 165 out of the 193 ITU Member States attended the four-week conference, braving the extreme winter conditions in Geneva. Over 100 observers from among the 700 ITU private sector members and from other international organizations also attended WRC-12.
WRC-12 addressed some 30 agenda items related to frequency allocation and frequency sharing for the efficient use of spectrum and orbital resources, thus ensuring high quality radiocommunication services for mobile and satellite communications, for maritime and aeronautical transportation, as well as for scientific purposes related to the environment, meteorology and climatology, disaster prediction, mitigation and relief.
The most important decisions made at the conference were related to the distribution of frequency spectrum required for mobile and satellite communications in order to provide broadband service. This distribution is planned to take effect after the World Radiocommunication Conference in 2015.
WRC-12 Chairman Tariq Al Awadhi said, “The Conference set out to tackle very complex issues related to radiocommunications and I am delighted that after four weeks of sometimes difficult negotiations we have arrived at consensus that will shape the way we communicate in the future.”
ITU Secretary-General Hamadoun Touré expressed satisfaction at the outcome of the Conference. “WRC-12 has helped define new and better ways to regulate radio services and applications, and represents a major contribution in making the world a better place for all.”
The Conference was steered under the Chairmanship of Mr Tariq Al Awadhi of the United Arab Emirates, along with six Vice-Chairmen: Mr Decker Anstrom (United States), Mr Eric Fournier (France), Mr Albert Nalbandian (Armenia), Mr Mahiddine Ouhadj (Algeria), Mr Habeeb Al-Shankiti (Saudi Arabia) and Mr Alan Jamieson (New Zealand).
ITU Report Reveals Accelerating Demand for Faster Rollout of High-speed Internet
New figures released by ITU show that information and communication technology (ICT) uptake continues to accelerate across the Arab region, underlining the need for more effort to be put into rolling out broadband infrastructure to meet burgeoning demand from a young, tech-savvy population.
Data from the ITU ‘ICT Adoption and Prospects in the Arab Region 2012’ report reveal that, over the past five years, the number of mobile cellular subscriptions in the region has almost tripled, from 126 million in 2006 to nearly 350 million at the end of 2011. At the beginning of this year, regional mobile cellular penetration reached 97%, 10% higher than global penetration.
However, the report warns that such figures can obscure wide disparities between the region’s ‘hyper-connected’ economies and its less connected nations. For example, for every 100 people in Saudi Arabia, there are around 188 mobile phone subscriptions; in Djibouti, there are fewer than 20. More than 80% of the population in Qatar uses the Internet, but the figure is below 5% in Mauritania, Iraq and Somalia. Members of the Gulf Cooperation Council (GCC), with their higher incomes, have more than twice as many Internet users per 100 inhabitants as non-GCC countries.
Region-wide, ITU estimates show that less than 30% of the population was online at the end of 2011. Fixed broadband penetration stood at just above 2%, well below most other regions and under the world average of around 9%.
ITU Connect Arab Summit Identified Regional ICT Market Opportunities Worth Over US$46 Billion
Along with other industry and government leaders, Saudi Arabia participated with a delegation headed by MCIT Minister H.E Eng. Mohammed J. Mulla in the ITU Connect Arab Summit aimed at connecting the unconnected in the Arab World (5-7 March).
Saudi Arabia was chosen as one of the vice presidents of the work team that prepared and set the agenda for the summit including the key issues central to achieving a connected Arab World: Cyber Security (Building Trust and Security in the Use of ICT); Access and Infrastructure (Broadband Access Networks, Digital Broadcasting and Open-source Software); Digital Content (Multilingualism); and ICT Innovation and Human Capabilities.
The investment opportunities identified by the Summit focus around key priorities for the region, including building a regional Arab ICT highway, developing e-services, empowering local people through training and human capacity building, leveraging ICTs for youth job creation, strengthening cyber security, and protecting Arab heritage and culture.
At the Summit, participants identified market opportunities worth over US$46 billion for new regionally focused projects designed to enhance ICT access, applications and services throughout the region.