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Mobile, Broadband Spending to Surge

DUBAI — Total telecom spending in the UAE is expected to decline marginally at an annual rate of around negative 0.02 per cent from 2008 to 2015, when it will reach an estimated $1.26 billion, a US analysis and consulting firm said.

While fixed-line services are likely to see fewer investments, mobile services are expected to constitute major capital expenditures in South Asia and the Middle East, said Girish Trivedi, the Deputy Director for both regions at California-based Frost & Sullivan.

Trivedi, who conducted a study of the sector, said that technological advances would continue to spur spending in the UAE and other Middle East countries over the next five to six years.

“Investments in broadband and carrier networks and multimedia and value-added services will gain significant traction in these regions,” he said.

The UAE’s per capita gross domestic product is one of the biggest in the world, so average revenue generated by each customer for telecom operators etisalat and du will remain high in spite of high penetration levels of around 160 per cent, the study said.

“The telecom network in the UAE is one of the most technologically advanced in the world, with 3.5G and 3.75G networks being deployed. The introduction of a second operator in the UAE has led to some rationalisation in tariff levels and also increased spending levels in the market,” it said, referring to newcomer du, which is challenging incumbent etisalat.

The Frost & Sullivan study found that the arrival of new operators in Saudi Arabia has encouraged spending in 
the kingdom.

Telecom spending in the Saudi market totalled $6.58 billion in 2008 and is expected to decline at a negative annual rate of around 1.59 per cent.

By 2015, spending in the Saudi market will equal about $5.88 billion, the study said.

Saudi Arabia has one of the lowest ratres of broadband penetration in the region, and this segment will claim a big chunk of capital spending by telecom operators in the next several years, the report said.

“The Indian market, with its sheer size, will continue to dominate the spending in the region,” it said.

Total telecom spending in India was $21.55 billion in 2008 and is anticipated to increase by 2.2 per cent on average to 2015, when it will reach $25.13 billion. Capital expenditure will be driven by 3G operations that are expected to start in the next one to two years and by the broadband and carrier services offered by large incumbent operators, the study said.

· issacjohn@khaleejtimes.com