Regional mobile phone markets face slowdown

07 November 2008
Growth in Saudi Arabia, the UAE, Egypt and Morocco will fall to single digits in 2010.

The Middle East’s fast-growing mobile phone markets will slow rapidly within the next two years, with four of the largest markets growing in single, rather than double digits.

Next year will be the last year of double digit growth in mobile phone customers in Saudi Arabia, the UAE, Egypt and Morocco, according to a upcoming report
by UK telecoms consultant Analysys Mason.

In 2010, the number of mobile phone customers in Egypt and the UAE will grow by just 9 per cent, while the number of customers in Saudi Arabia will grow by 6 per cent and in Morocco by 5 per cent.

Saudi Arabia, which is the largest market in terms of revenues, saw the launch of a new mobile network in August, run by Kuwait’s Zain. However, growth will dwindle as the three operators run out of new customers to sign up.

Analysys Mason forecasts that Saudi Telecom, Etihad Etisalat and Zain will have 29.4 million customers between them by the end of this year, an 18 per cent increase on 2007. However, the growth in customer numbers will slow to 11 per cent in 2009, and fall again to 6 per cent in 2010.

“Saudi Arabia has had very strong growth since the second licence was awarded [to Etihad Etisalat in 2005]. Whether that will continue is unlikely,” says Daniel Jones, an analyst at Analysys Mason. “I see growth slowing because of income inequalities in this market. Large parts of the population have very low incomes and cannot afford phones.”

The UAE’s rate of growth will slow from 22 per cent during 2008 to 9 per cent next year, with the country’s two operators, Etisalat and Du, sharing 8.5 customers by the end of 2009.

In October, the IMF reduced its forecasts for every major Middle Eastern economy. Its latest predictions for economic growth in Saudi Arabia and the UAE for 2009 are 4.3 per cent and 6 per cent respectively. However, Jones says that in both Saudi Arabia and the UAE, growth in the mobile phone markets would be limited more by the rate of population growth than by slowing economics.

Saudi Arabia’s rate of mobile phone penetration is expected to be 118 per cent of the population at the end of this year and the UAE is expected to reach 143 per cent.

The mobile phone markets in Egypt and Morocco will also slow down dramatically.

Egypt is likely to be the region’s fastest growing market this year, with growth of 31 per cent taking customer numbers to more than 40 million customers.

In 2009, this will drop to 14 per cent, before growth falls again in 2010 to 9 per cent.

Morocco’s mobile phone market will grow at 11 per cent in 2008 before slowing to 8 per cent in 2009 finishing the year at 24 million customers. A third mobile phone operator is expected to launch in the country in late 2009 or early 2010.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications