Saudi Telecom Co (STC) aims to connect 500,000 homes in the kingdom with optical fibre for highspeed broadband, but a lack of spectrum is limiting the adoption of next-generation mobile services, a top executive said on Thursday.
Saudi Arabia’s 26.5 million people had 1.95 million fixed broadband subscriptions at the end of 2011, according to the telecoms regulator, while of these only 18,500 are high-speed fibre-to-the-home (FFTH) connections, Informa Telecoms and Media estimates.
“With FTTH, we’re looking to pass 500,000 homes by the end of this year and go up to 2 million in 2013,” Jameel Al-Molhem, Saudi Telecom chief executive for Saudi Arabia, told a conference in Dubai.
Slumping margins on conventional voice calls have prompted STC and rivals Mobily, an affiliate of the United Arab Emirates’ Etisalat, and Zain Saudi to bet on soaring demand for broadband to bolster income.
That strategy seems to be working – STC’s first-quarter profit rose 60 percent, while its mobile broadband revenue was up 145 percent, Bahrain’s Securities & Investment Co (SICO) wrote in a note.
Potential further growth is huge, with only 41 percent of Saudis using the internet at the end of 2010, according the International Telecommunications Union’s most recent data.
