Booming mobile operators in the Middle East
March 17th, 2010The Middle East mobile market is characterised by some very high penetration rates and continuing healthy subscriber growth rates in most countries. This is putting strain on ARPU rates, which are falling as subscriber numbers increase.
The six countries of the Gulf Cooperation Council (GCC) all have penetration rates well in excess of 100%, with the UAE, Bahrain and Qatar nearer 200%. This is due to intense competition and to multi-SIM ownership as subscribers aim to maximise special offers and different deals. The large and transient expatriate populations in the Gulf countries are also a factor in encouraging competition, and thus growth and penetration rates – with a fluid population new operators stand a better chance of gaining market share. Inevitably there must also be a significant number of inactive prepaid SIM-cards.
Growth rates are also high in the less developed markets of Iraq, Iran and Lebanon. Amongst the lower growth countries, Turkey was hit hard by the Global Financial Crisis, leading to a recession and a fall in mobile penetration. Israel has also seen low growth rates, partly due to much a much lesser economic slowdown and partly to saturated markets and perhaps distraction due to considerable industry structural changes.
The region is home to some very large international players. Etisalat of the UAE and Zain of Kuwait have been particularly aggressive buyers of both new licences and existing operators in Africa, the Middle East and Asia. Qtel of Qatar, STC of Saudi Arabia and Batelco of Bahrain have also taken this route for growth.
In the more developed Gulf countries and Israel, operators are pinning their growth hopes on persuading their mobile subscribers to take up data and broadband services. Customers want the latest in high-end handsets and have the income to pay for them. 3G services in these countries are well established, together with HSPA. Outside the Gulf countries, Israel and Turkey, no operator has launched 3G or HSPA although Jordan issued a licence to Orange in August 2009.
Mobile subscribers, annual change and penetration rates in the Middle East – June 2009
| Country | Mobile subscribers (million) | Annual change | Mobile penetration |
| Bahrain | 1.4 | 12% | 177% |
| Iran | 56.2 | 39% | 76% |
| Iraq | 20.1 | 37% | 65% |
| Israel | 9.2 | 3% | 128% |
| Jordan | 5.6 | 12% | 88% |
| Kuwait | 3.7 | 25% | 107% |
| Lebanon | 2 | 57% | 52% |
| Oman | 3.5 | 18% | 126% |
| Qatar | 1.9 | 32% | 165% |
| Saudi Arabia | 32.8 | 30% | 130% |
| Syria | 7.5 | 9% | 37% |
| Turkey | 63.7 | 0% | 91% |
| UAE | 10.2 | 17% | 210% |
| Yemen | 7.3 | 31% | 31% |
(Source: BuddeComm based on Global Mobile data)
For more information on this new BuddeComm report see: Middle Eastern Mobile Voice and Operators Market