Doing Business in Saudi Arabia - International Franchise Association
Doing Business in Saudi Arabia - International Franchise Association
Doing Business in Saudi Arabia - International Franchise Association
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Telecommunications Services – TES<br />
Overview Return to top<br />
ICT spend<strong>in</strong>g <strong>in</strong> <strong>Saudi</strong> <strong>Arabia</strong> grew 4 percent year-on-year <strong>in</strong> 2009 to $25 billion. ICT spend<strong>in</strong>g<br />
is forecasted to grow at a three-year CAGR of eight percent to $32 billion by 2012. Close to<br />
50% of the spend<strong>in</strong>g <strong>in</strong> this sector is <strong>in</strong> the consumer segment, followed by energy and utilities<br />
at an average of 12 percent. Public sector stands at n<strong>in</strong>e percent and services is at seven<br />
percent.<br />
The fixed l<strong>in</strong>e network, with a subscriber base of nearly 4.17 million and penetration level of 16<br />
per cent, covers 69 per cent of households <strong>in</strong> the country. The Communications & Information<br />
Technology Commission (CITC) issued three new licenses <strong>in</strong> 2008 for the establishment and<br />
operation of public fixed telecom networks offer<strong>in</strong>g national and <strong>in</strong>ternational services. The<br />
mobile subscriber base has expanded nearly seven-fold from five million <strong>in</strong> 2002 to 34.8 million<br />
<strong>in</strong> the first n<strong>in</strong>e months of 2009, the majority of which (85 percent) are <strong>in</strong> the pre-paid segment.<br />
This represents a penetration level of 134 percent.<br />
Total Internet users <strong>in</strong>creased to nearly 10 million <strong>in</strong> the first n<strong>in</strong>e months of 2009 with a<br />
broadband penetration level of eight percent. The upgrad<strong>in</strong>g of the telecommunications<br />
networks is likely to be a major driver of <strong>in</strong>frastructure spend<strong>in</strong>g.<br />
No reliable, published statistics are available on the TES sector <strong>in</strong> <strong>Saudi</strong> <strong>Arabia</strong>.<br />
Best Products/Services Return to top<br />
<strong>Saudi</strong> <strong>Arabia</strong> is expected to need a significant amount of technology, software and hardware to<br />
create the new digital <strong>in</strong>frastructure that the government is hop<strong>in</strong>g for.<br />
Best prospects <strong>in</strong>clude:<br />
• DSL access switches, enabl<strong>in</strong>g multi-service transmission equipment<br />
• Fiber-optic satellite l<strong>in</strong>ks<br />
• Wideband transceivers<br />
• Network protocol software and systems<br />
• Broadband wireless access systems – “ WiMax”, with 2.5 and 3.5 GHz and two types,<br />
16D and 16E.<br />
Opportunities Return to top<br />
Increased personal wealth <strong>in</strong> the past decade, coupled with <strong>in</strong>creased IT awareness, has<br />
decreased cost of personal PCs and <strong>in</strong>ternet access has caused a surge <strong>in</strong> users across the<br />
K<strong>in</strong>gdom.<br />
Accord<strong>in</strong>g to Markaz, the upgrad<strong>in</strong>g of the telecommunications networks is likely to be a major<br />
driver of <strong>in</strong>frastructure spend<strong>in</strong>g. <strong>Saudi</strong> <strong>Arabia</strong> is expected to account for more than 50 per cent<br />
of spend<strong>in</strong>g on ICT <strong>in</strong> the Gulf Cooperation Countries over the next three years. Of the nearly