– Caused overall expansion of telecommunication service technology and market based on the COVID-19 pandemic
– Increasing number of competitors in the market, introducing new technologies, and promoting healthy competition and market
Communication service market overview
In Saudi Arabia, young people make up half of the population, and mobile phone use and internet use are also quite high. According to Statista, more than 2021% of the total population of 3580 million people in 90 will use a smartphone, and more than 88% will use the Internet. In particular, considering that multiple SIM cards can be used per person, it can be seen that the size of the telecommunication market is quite large.
However, in the past, there was no limit on the use of SIM cards per person, and the expansion was aggressively due to cheaper communication costs and consumables such as mobile phones. It was difficult to attract new subscribers for a while due to indirect factors such as a rise in mobile phone prices following the hike. Accordingly, telecommunication companies have started to provide highly profitable post-paid services and premium services by differentiating them from the existing services, and it is analyzed that the recovery of growth is attributable to these new services. In addition, during the COVID-1 pandemic, telecommuting at work and online lectures at schools continued for a long time, accelerating the growth of mobile data traffic and serving as a catalyst for market expansion. In this regard, the government is also expected to support the expansion of the telecommunication service market by investing $19 billion in 5G infrastructure and fiber optic infrastructure.
Communication service market size
As of 2021, the Saudi telecom service market has a total number of 4338 million subscribers, recording a penetration rate of 122%, which is a 1.6% growth from the previous year. The total number of telecommunication service subscribers is higher than the total population, because in Saudi Arabia, one person builds multiple telecommunication lines in some cases. As of 1, about 2021% of the total number of subscribers is concentrated in two telecommunication companies. This is because even though competitors such as MVNOs (virtual mobile network operators) continue to appear, telecommunication companies with high market dominance maintain their position in the market. It can be seen that there is The number and ratio of subscribers of the first to third providers remain similar, with STC accounting for 80 million, 2%, and Mobily, with 1 million, 3%, as of 2021.
<Number of communication service subscribers>
(Unit: XNUMX people)
[Source: Fitch solutions]
Saudi Arabia showed rapid growth in machine-to-machine (M19M) telecommunication services introduced to respond to non-face-to-face demand during the COVID-2 pandemic. This is a technology that uses all things as a communication entity, and it was a technology that existed in the past, such as home automation, ubiquitous healthcare, and smart grid, but it has grown based on Corona 19. As of the second quarter of 2021, there were 2 million M2M service subscribers, an increase of 481% from the previous year.
[Source: CITC (Saudi Arabia Telecommunications Regulatory Authority)]
Communication service trend
1G
5G service will not only become a standard for smartphone communication in the future, but will also be further expanded by M2M communication and IoT such as IoT and IoT. In particular, NEOM, a megaproject in Saudi Arabia, expects 2031 million 5490G connections by 5, and other smart city projects such as Red Sea and Qiddiya are also expected to see rapid expansion based on significant connections.
STC launched commercial 2019G services in June 6 and Zain in October 2019. As of 5, 2020 12,302G towers have been built nationwide, and they can be used in a total of 5 cities. In 51, Saudi Arabia was classified as a fifth generation (G2021) regulator by the International Telecommunications Union (ITU), the first in the MENA region and the ninth in the G20. Through G9 services, we are collaborating with various institutions in education, medical, finance, telecommunications and other fields.
<5G download speed by country (Saudi 11th)>
[Source: Open Signal]
2. MVNO (Virtual Mobile Network Operator)
Virgin Mobile launched as Saudi Arabia's first MVNO through STC's network in late September 2014. The second Lebara mobile was launched on Mobili's network in December 9. In July 2014, CITC granted new MVNO licenses to two companies: ITC Mobile and Future Networks Communications. Currently, a total of four MVNO companies have been established, and the total number of subscribers of the four companies is about 2021 million.
Communication Service Competitive Trend
The mobile market is dominated by three companies, STC, Mobily, and Zain.
<Major Providers in Saudi Mobile Market>
[Source: Fitch solutions]
STC is still the leader in the fixed-line market, and to overcome this, Mobily and Zain are both targeting premium customers while expanding FTTH (Fiber-to-the-home) such as fixed-line, broadband, and IPTV. are investing ICT Mobile (Salam) and Go Telecom are also competing with each other in terms of handling premium services.
<Optical cable speed by carrier>
[Source: CITC]
implication
With VISION 2030, Saudi Arabia started mega projects represented by smart city projects to promote industrial diversification and globalization of cities in the kingdom. As NEOM, Red Sea, and Qiddiya are cities that are established in new areas rather than existing cities, new communication infrastructure and services are expected to be built and new technologies are expected to be applied. In addition, as the young population, which is a potential customer, accounts for a fairly high percentage, the Saudi telecommunications service market is expected to grow very rapidly. As healthy competition led by the government is encouraged, telecommunication companies are also making efforts to provide faster and safer telecommunication services.
In fact, according to A, the person in charge of STC's local store, it is the best supplier in the market, but he cannot be vigilant as competition accelerates and competitors increase. As latecomers prioritize securing market share based on new technology, promotional products and services, STC said that it is continuously devising services to retain existing subscribers.
In the case of telecommunication services, there are many necessary parts such as securing a communication network or networking with local government departments and institutions to enter the market directly. However, as mentioned above, if smart cities under construction are expected to be established one after another in addition to existing cities, the relevant market is expected to expand further than at present. It is of course possible to enter the simple communication service market, but considering the local environment, it is expected that exporting communication technologies such as M2M and IoT to Korean companies will be a more realistic alternative.
Source: CITC, Fitch Solutions, Statista, Opensignal, website by telecommunication company (stc, mobile, zain, etc.), Saudi Gazette, Arab News, etc.