Monday, January 5, 2009

Gulf telecom players need to have more focus on VAS to enhance the ARPUs

Higher competition and further drop in average revenue per user (ARPUs) is expected as Gulf telecom players are on an expansion spree following steps taken by Saudi Arabia, Bahrain, Oman, and the UAE to allow additional service providers in the respective countries, according to Global Investment House’s report.
The report said service providers should aim to increase their market shares by providing differentiated value added services and providing content-based services (like mobile video streaming) to enhance the ARPUs.
The Gulf registered a decline of 6.9 per cent in fixed line subscribers from 5.8 million subscribers in 2006 to 5.4 million in 2007 on account of increasing shift of customer base to the more convenient mobile voice services.
The report said increasing disposable income and convenience of use is encouraging the cellular penetration in the region.
Other important contributing factor to the increased cellular penetration is the relaxation in telecom regulations allowing second or third player in each country apart from the incumbent local carriers [usually the first state run Telco service provider in each country].
The region registered a five-year (2002-07) growth in cellular subscribers at an annual growth rate of 37.6 per cent.
The Middle East and North Africa region has seen the highest worldwide five-year (2002-07) growth in cellular subscribers at an annual rate of 52.9 per cent against the worldwide increase of 23.3 per cent.
With the country-wise cellular markets reaching or crossing the 100 per cent penetration levels within the Gulf, all the six member countries registered double digits an annual growth rate during the five-year (2002-07) period.
Big contributors
In 2007, Asia and Mena region were the major growth contributors with year-on-year growth rates of 36.8 per cent and 33.9 per cent respectively.
The UAE topped the list of high-growth contribution with a year-on-year growth rate of 34.6 per cent with its internet user base increasing from 1.7 million in 2006 to 2.3 million in 2007.
The next highest contributor was Saudi Arabia, which reported a 31.9 per cent year-on-year increase in the internet users’ base from 4.7 million in 2006 to 6.2 million in 2007.
The high proportion of youth in the demographics, with 55 per cent to 65 per cent of the total population under the age of 30 years, is driving the internet usage in the Gulf.
The higher rate of internet penetration and improved infrastructure services in terms of shift from dial-up to cable is helping increase the broadband subscriber base in the Gulf.
The analysis of five-year (2002-07) annual growth rate in broadband subscribers worldwide indicates that the GCC region is among the top three growth regions in the world.
The worldwide broadband subscriber base increased at a five-year (2002-07) annual growth rate of 38.9 per cent.

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