Saudi Arabia’s telecoms regulator, the CITC ( Communications and Information Technology Commission ), has taken a firm stand to ensure communications applications such as Twitter, WhatsApp, Viber and Skype meet local telecoms laws, BMI said in “Saudi Arabia Telecommunications Report Q3 2013”.
BMI believes subscribers will continue to find ways around restrictions, but this may encourage ever greater regulatory intervention. “While we see limited scope for subscriber growth in the Saudi market, the opportunities for operators lie in the provision of applications and value-added services. Restricting these may limit the scale of growth from non-voice services for operators in the Saudi market,” it said.
The mobile market grew by 0.9 percent q-o-q in Q113 after two consecutive quarters of subscriber decline.
Mobile ARPU was flat in Q113.
The fixed-line market grew by 4.3 percent in 2012, driven by the residential segment.
Total broadband subscriptions grew by 16.5 percent in 2012.
Moreover, Saudi Arabia is ranked second on BMI’s Risk/Reward Ratings (RRR) table for Middle East and North Africa (MENA) in our Q313 update. The Kingdom’s score benefits from strong voice and data subscriptions growth, partly fuelled by seasonal demand during religious celebrations.
In June 2013, the CITC banned Internet messenger application Viber in the Kingdom. The regulator stated that it will take necessary actions against any other applications or services that fail to comply with the rules and regulations applicable in Saudi Arabia. The CITC had warned in March that tools, such as Viber, WhatsApp and Skype are not in compliance with local laws. Such applications are hard for the state to monitor and affect the revenues derived from international calls and texts for telecoms operators. The regulator has reportedly said it will extend the ban to WhatsApp before the start of the holy month of Ramadan in July.
The liquidation of Saudi Integrated Telecom (SITC) exposed local retail investors to huge losses, according to local press reports. SITC floated its shares in an IPO in 2011, but never started operations. In May 2013, the Saudi Arabian Ministry of Telecommunications and Information Technology revoked the company’s operating licence and ordered its liquidation within six months. In September 2012, SITC was fined SR200,000 ($53,326) by the Capital Market Authority for allegedly violating markets and listing rules. The operator’s failure reflects the dominance of speculative retail traders in the country’s market.
In June 2013, Zain KSA secured a three-year Islamic loan of SR2.25 billion ($600 million) from four banks. The banks are Arab National Bank, Banque Saudi Fransi, Gulf International Bank and Samba Financial Group. The money will be utilized for refinancing an existing deal that has been extended beyond its original maturity date. Kuwait-based parent company Zain Group, which has a 37 percent stake in Zain KSA, offered an unconditional and irrevocable guarantee for the murabaha facility.
Saudi Gazette
