REGIONAL FORECAST REPORT MIDDLE EAST AND NORTH …€¦ · 27. Individual country forecasts 28....

Middle East and North Africa telecoms market: trends and forecasts 2017–2022

© Analysys Mason Limited 2017

REGIONAL FORECAST REPORT

MIDDLE EAST AND NORTH AFRICA

TELECOMS MARKET: TRENDS AND

FORECASTS 2017–2022

KARIM YAICI



REPORT COVERAGE

Geographical Key performance indicators

Regions modelled:

▪ Middle East and

North Africa (MENA)

Countries modelled

individually

▪ Algeria

▪ Egypt

▪ Iran

▪ Iraq

▪ Israel

▪ Kuwait

▪ Morocco

▪ Oman

▪ Qatar

▪ Saudi Arabia

▪ Tunisia

▪ United Arab

Emirates (UAE)

Connections Revenue

Mobile

▪ Handset, mobile

broadband1, M2M2

▪ Prepaid, contract

▪ 2G, 3G, 4G,5G

▪ Smartphone,

non-smartphone

Fixed

▪ Voice, broadband,

IPTV, dial-up

▪ Narrowband voice,

VoBB

▪ DSL, FTTP/B, cable,

BFWA, 5G, other

Mobile

▪ Service3, retail


▪ Handset, mobile

broadband1, M2M2

▪ Handset voice,

messaging, data

Fixed

▪ Service3, retail

▪ Voice, broadband,

IPTV, dial-up,

business services

▪ DSL, FTTP/B, cable,

BFWA, other

ARPU

Voice traffic Mobile:

▪ SIMs, handset


▪ Handset voice, data

Fixed and mobile

▪ Outgoing minutes,

MoU

2

This report provides:

▪ a 5-year forecast of more than 180 mobile and fixed KPIs for

the Middle East and North Africa as a whole and twelve key

countries

▪ an in-depth analysis of the trends, drivers and forecast

assumptions for each type of mobile and fixed service, and for

key countries

▪ an overview of operator strategies and country-specific topics,

in order to highlight similarities and differences by means of a

cross-country comparison

▪ a summary of results, key implications and recommendations

for mobile and fixed operators.

Our forecasts are informed by on-the-ground regional market

experts from our topic-led research programmes and our

consulting division, as well as external interviews.

In addition to our robust set of historical data, our forecasts draw

on a unique and in-house modelling tool, which applies a rigorous

methodology (reconciliation of different sources, standard

definitions, top-down and bottom-up modelling).

For the complete data set, see the accompanying Excel file at

www.analysysmason.com/MENA-telecoms-forecasts-2017-RDRK0.

About this report

1 Includes USB modem, and mid- and large-screen, but not handset-based data.

2 M2M connections and revenue figures include mobile services only.

3 Service revenue is the sum of retail and wholesale revenue.


© Analysys Mason Limited 2017 3

7. Executive summary

8. The telecoms service market in MENA will grow to USD73 billion in 2022,

as competition increases against a backdrop of weaker economic outlook

9. Telecoms retail revenue will increase by USD3.7 billion over 2016–2022,

primarily driven by mobile handset data and fixed broadband services

10. In most countries, the fixed market holds greater potential for growth than

mobile, where revenue will be either similar to or lower than in 2016

11. Key trends, drivers and assumptions for the mobile and fixed markets

12. Key implications and recommendations for telecoms operators

13. Regional forecasts and cross-country comparison

14. Geographical coverage: We model twelve telecoms markets, which will

account for 88% of telecoms service revenue in MENA in 2022

15. Market context: The twelve modelled countries account for 83.3% of total

population and 89.3% of telecoms service revenue in MENA in 2016

16. Revenue and ARPU: Mobile and fixed data services will drive revenue

growth in the region, but mobile voice revenue will continue to dominate

17. Mobile penetration: Maturing markets and enforced SIM registration

policies have led to a slow down in numbers of new mobile connections

18. Mobile connections: 42% of all connections will be 3G by 2022, while LTE

will account for nearly 31% of connections (excluding M2M)

19. Smartphones and LTE: The 4G/5G user base in the region will reach

174.4 million in 2022, with growing opportunities for data monetisation

20. Mobile ARPU: Growth in data and migration to postpaid connections will

help to reduce the rate of decline of ARPU

21. Data and revenue by generation: 4G connectivity and digital services will

help to offset a slowdown in the growth of legacy services revenue

22. Fixed services: Broadband market will grow in most countries, driven by

upgrades to access technology and new infrastructure investments

23. Fixed broadband: Household penetration will grow in all markets, driven by

market competition and supported by national broadband plans

24. Key drivers at a glance for each Middle East and North Africa market

25. Key drivers at a glance table: methodology [1]

26. Key drivers at a glance table: methodology [2]

27. Individual country forecasts

28. Iran: Lifting of sanctions will encourage investment and entry of MVNOs is

expected to increase competition in the mobile market

29. Iran – mobile: Adoption of smartphones and 4G services, combined with

MVNO entry in 2017, will underpin future growth

30. Iran – fixed: Investment in fibre and TD-LTE infrastructure will help improve

service quality and expand fixed broadband reach

31. Kuwait: The market will start contracting after 2018 as the fixed market will

not sufficiently grow to offset mobile revenue decline

32. Kuwait – mobile: Revenue growth will be hampered by market saturation

and ARPU erosion, despite strong take-up of data

33. Kuwait – fixed: Unclear timelines for fixed infrastructure privatisation and

fibre roll-out will constrain market growth

Contents



34. Oman: A third MNO will boost mobile connections, but erode market value

– the outlook for fixed broadband is more positive

35. Oman – mobile: Strong data revenue growth against the backdrop of

increasingly challenging commercial conditions

36. Oman – fixed: Increased competition will lead to voice revenue decline,

while broadband will benefit from ambitious roll-out plans

37. Qatar: Economic diversification and infrastructure projects should drive

demand for telecoms services if the current crisis is resolved

38. Qatar – mobile: Market still has potential for growth, provided that the

regional blockade does not stretch beyond a few months

39. Qatar – fixed: Well-developed fibre infrastructure will create opportunities

for upselling broadband and content-based services

40. Saudi Arabia: Market will be driven by data, but growth will be subdued

because of regulatory and competitive challenges

41. Saudi Arabia – mobile: Revenue contracted in 2016, but will remain largely

stable over the next 5 years, due to data usage

42. Saudi Arabia – fixed: Unified licensing and the government’s plan to expand

fibre coverage should help drive demand for broadband

43. UAE: A positive overall outlook for revenue growth, despite increased

market competition in the fixed and mobile markets

44. UAE – mobile: Steady growth, driven by a healthy economy and operators’

investment in infrastructure and digital initiatives

45. UAE – fixed: Investment in infrastructure and capabilities will help operators

capture opportunities beyond broadband connectivity

46. About the author and Analysys Mason

47. Analysys Mason’s consulting and research are uniquely positioned

48. Research from Analysys Mason

49. Consulting from Analysys Mason

Contents



Figure 1: Telecoms retail revenue by service type and total service revenue

(retail and wholesale), Middle East and North Africa, 2012–2022

Figure 2: Telecoms retail revenue growth by service type, Middle East and North

Africa, 2016–2022

Figure 3: Telecoms retail revenue growth by type and country, Middle East and

North Africa, 2016–2022

Figure 4: Summary of key trends, drivers and assumptions for Middle East and

North Africa

Figure 5: 4G/5G share of mobile connections and next-generation access (NGA)

share of fixed broadband connections by country, Middle East and North Africa,

2022

Figure 6: Metrics for the 12 countries modelled individually in the Middle East

and North Africa, 2016

Figure 7: Telecoms retail revenue by service type, fixed voice and fixed

broadband ASPU, and mobile ARPU, Middle East and North Africa, 2012–2022

Figure 8: Telecoms retail revenue by service type, total service revenue and

growth rates, Middle East and North Africa, 2016–2022

Figure 9: Connections by type, and growth rates, Middle East and North Africa,

2016–2022

Figure 10: Active mobile SIM penetration by country (excluding M2M), Middle

East and North Africa, 2012–2022

Figure 11: Mobile connections by technology generation (excluding M2M), and

3G, 4G and 5G share of connections, Middle East and North Africa, 2012–

2022

5

Figure 12: Smartphones as a percentage of handsets, and LTE share of total

connections (excluding M2M), Middle East and North Africa, 2016 and 2022

Figure 13: Mobile ARPU by country, Middle East and North Africa, 2012–2022

Figure 14: Mobile service revenue and ARPU by technology, Middle East and

North Africa, 2012–2022

Figure 15: Data traffic and revenue per megabyte, Middle East and North Africa,

2012–2022

Figure 16: Fixed broadband connections by type, and fixed voice, IPTV and

mobile broadband connections, Middle East and North Africa, 2012–2022

Figure 17: Fixed broadband penetration of households by country, Middle East

and North Africa, 2012–2022

Figure 18: Major forecast drivers: current situation (2016) and future trajectory

(2017–2022), by country, Middle East and North Africa

Figure 19a: Methodology for attributing scores to each element in the key

drivers table (current and future) and impact of high scores

Figure 19b: Methodology for attributing scores to each element in the key

drivers table (current and future) and impact of high scores


(retail and wholesale), Iran, 2012–2022


growth rates, Iran, 2016–2022

Figure 22: Connections by type, and growth rates, Iran, 2016–2022

List of figures



Figure 23: Mobile, smartphone and 4G/5G penetration rates, Iran, 2012–2022

Figure 24: Mobile ARPU by type and overall mobile ARPU, Iran, 2012–2022

Figure 25: Summary of key mobile market drivers and assumptions, Iran

Figure 26: Fixed penetration rates by service type, Iran, 2012–2022

Figure 27: Fixed ASPU by service type, Iran, 2012–2022

Figure 28: Summary of key fixed market drivers and assumptions, Iran


(retail and wholesale), Kuwait, 2012–2022


growth rates, Kuwait, 2016–2022

Figure 31: Connections by type, and growth rates, Kuwait, 2016–2022

Figure 32: Mobile, smartphone and 4G/5G penetration rates, Kuwait, 2012–

2022

Figure 33: Mobile ARPU by type, and mobile ARPU, Kuwait, 2012–2022

Figure 34: Summary of key mobile market drivers and assumptions, Kuwait

Figure 35: Fixed penetration rates by service type, Kuwait, 2012–2022

Figure 36: Fixed ASPU by service type, Kuwait, 2012–2022

Figure 37: Summary of key fixed market drivers and assumptions, Kuwait


(retail and wholesale), Oman, 2012–2022


growth rates, Oman, 2016–2022

6

Figure 40: Connections by type, and growth rates, Oman, 2016–2022

Figure 41: Mobile, smartphone and 4G/5G penetration rates, Oman, 2012–

2022

Figure 42: Mobile ARPU by type, and mobile ARPU, Oman, 2012–2022

Figure 43: Summary of key mobile market drivers and assumptions, Oman

Figure 44: Fixed penetration rates by service type, Oman, 2012–2022

Figure 45: Fixed ASPU by service type, Oman, 2012–2022

Figure 46: Summary of key fixed market drivers and assumptions, Oman


(retail and wholesale), Qatar, 2012–2022


growth rates, Qatar, 2016–2022

Figure 49: Connections by type, and growth rates, Qatar, 2016–2022

Figure 50: Mobile, smartphone and 4G/5G penetration rates, Qatar, 2012–

2022

Figure 51: Mobile ARPU by type, and mobile ARPU, Qatar, 2012–2022

Figure 52: Summary of key mobile market drivers and assumptions, Qatar

Figure 53: Fixed penetration rates by service type, Qatar 2012–2022

Figure 54: Fixed ASPU by service type, Qatar, 2012–2022

Figure 55: Summary of key fixed market drivers and assumptions, Qatar


(retail and wholesale), Saudi Arabia, 2012–2022

List of figures




growth rates, Saudi Arabia, 2016–2022

Figure 58: Connections by type, and growth rates, Saudi Arabia, 2016–2022

Figure 59: Mobile, smartphone and 4G/5G penetration rates, Saudi Arabia,

2012–2022

Figure 60: Mobile ARPU by type, and mobile ARPU, Saudi Arabia, 2012–2022

Figure 61: Summary of key mobile market drivers and assumptions, Saudi

Arabia

Figure 62: Fixed penetration rates by service type, Saudi Arabia, 2012–2022

Figure 63: Fixed ASPU by service type, Saudi Arabia, 2012–2022

Figure 64: Summary of key fixed market drivers and assumptions, Saudi Arabia


(retail and wholesale), UAE, 2012–2022


growth rates, UAE, 2016–2022

Figure 67: Connections by type, and growth rates, UAE, 2016–2022

Figure 68: Mobile, smartphone and 4G/5G penetration rates, UAE, 2012–2022

Figure 69: Mobile ARPU by type, and mobile ARPU, UAE, 2012–2022

Figure 70: Summary of key mobile market drivers and assumptions, UAE

Figure 71: Fixed penetration rates by service type, UAE, 2012–2022

Figure 72: Fixed ASPU by service type, UAE, 2012–2022

Figure 73: Summary of key fixed market drivers and assumptions, UAE

List of figures



Figure 5: 4G/5G share of mobile connections and next-generation access (NGA) share of fixed broadband connections by country, Middle East and North Africa, 20221

15

1 For a full list of countries modelled as part of the Middle East and North Africa region, please see the accompanying data annex. Mobile connections exclude M2M connections. NGA share of fixed broadband

connections is calculated as cable, VDSL and FTTH connections (that provide access speeds of 30Mbps or more) divided by the total number of fixed broadband connections.

Geographical coverage: We model twelve telecoms markets, which will

account for 88% of telecoms service revenue in MENA in 2022

4G/5G share of mobile

connections

NGA share of fixed

broadband connections

KEY: Metrics for

2022

56%

82%

ALGERIA 1

EGYPT2

IRAN3

IRAQ4

ISRAEL5

KUWAIT6

MOROCCO 7

OMAN8

QATAR9

SAUDI ARABIA 10TUNISIAUAE1112

1 2

34

7

8

10

115

6

9

12

Source: Analysys Mason



Service typeRevenue (USD billion) CAGR

2016 2022 2012–2016 2016–2022

Mobile voice 29.3 26.2 –2.1% –1.8%

Mobile messaging 2.3 1.6 –5.5% –5.4%

Mobile handset data 9.7 14.1 18.4% 6.4%

Mobile broadband2 2.7 2.7 12.3% –0.1%

Mobile M2M 0.1 0.6 58.0% 26.6%

Fixed voice and narrowband3 5.9 4.6 –3.0% –4.1%

Fixed broadband and IPTV 9.0 11.9 10.2% 4.6%

Business services 4.4 5.6 22.6% 4.0%

Total retail revenue 63.5 67.3 3.1% 1.0%

Total service revenue4 70.1 73.0 2.7% 0.7%

Connection typeConnections (million) CAGR

2016 2022 2012–2016 2016–2022

Mobile handsets 470.5 525.4 2.6% 1.9%

Mobile broadband 23.0 26.6 23.2% 2.5%

Mobile M2M 7.1 31.6 60.8% 28.4%

Fixed voice 60.6 63.7 –1.6% 0.8%

Fixed broadband 28.4 39.5 15.6% 5.7%

IPTV 1.7 4.1 17.9% 15.6%

Figure 9: Connections by type, and growth rates, Middle East and North Africa, 2016–2022

17

2 Includes USB modem, and mid- and large-screen, but not handset-based data.3 Includes narrowband, VoBB and dial-up Internet access.4 Includes retail and wholesale revenue.

Figure 8: Telecoms retail revenue by service type, total service revenue and growth rates,

Middle East and North Africa, 2016–2022

Revenue and ARPU: Mobile and fixed data services will drive revenue

growth in the region, but mobile voice revenue will continue to dominate

Figure 7: Telecoms retail revenue by service type, fixed voice and fixed broadband ASPU, and

mobile ARPU, Middle East and North Africa, 2012–2022

1 Mobile ARPU is calculated as total mobile service revenue (retail and wholesale), excluding M2M,

divided by total average mobile connections, excluding M2M.

Mobile voice Mobile messagingRetail revenue: Mobile handset data

Mobile broadband Mobile M2M

Fixed voice and narrowband Fixed broadband and IPTV

Mobile ARPU1 Fixed voice ASPU Fixed broadband ASPU

Business services



CONTENTS

47

EXECUTIVE SUMMARY

REGIONAL FORECASTS AND CROSS-COUNTRY COMPARISON

INDIVIDUAL COUNTRY FORECASTS

ABOUT THE AUTHOR AND ANALYSYS MASON



About the author

Karim Yaici (Senior Analyst) leads Analysys Mason’s The Middle East and Africa regional research programme. His primary areas of

specialisation include operators’ digital strategies, new telecoms opportunities and challenges, and consumer trends in growth markets. Prior to

joining Analysys Mason, Karim was an associate analyst at Ovum, where he authored reports on mobile accessories and mobile applications.

Prior to that, he worked as a research engineer in the Institute for Communication Systems and Vodafone. Karim holds an MSc in Information

Systems Management from the University of Southampton and a PhD in human–computer interaction from the University of Surrey.



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facing clients, in addition to the wider effects of global forces.

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RESEARCH

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Analysys Mason’s consulting services and research portfolio

49

Analysys Mason’s consulting and research are uniquely positioned



Research from Analysys Mason

50



Consulting from Analysys Mason

51



PUBLISHED BY ANALYSYS MASON LIMITED IN AUGUST 2017

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REGIONAL FORECAST REPORT MIDDLE EAST AND NORTH …€¦ · 27. Individual country forecasts 28....

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