Saudi telecom companies earned SR 65 billion from their operations at the end of 2011 and realized an average growth rate of 12.8 percent during 2001-2010, according to a report released by Communications and Information Technology Commission ( CITC ).
Revenues of mobile communication services accounted for 80 percent of the total revenues while fixed telephony and data services took the remaining 20 percent of the revenues, the report said.
According to the report, the investments of some of national telecom companies in foreign markets contributed to growth of revenue base from foreign investments, from SR 455 million in 2007 to nearly SR 18.2 billion at the end of 2011, thus bringing total revenues of telecom firms within and outside the Kingdom to about SR 84 billion.
Share of telecom sector in the Kingdom's gross domestic product (GDP) is estimated at 3 percent, which could jump to 6 percent if oil and mining sector neutralized from the GDP components, the report said.
Due to availability of liquidities to telecom companies and improvement of banking lending environment, value of investments is set to increase remarkably on telecom infrastructure and networks, particularly for broadband services, according to the report.
The number of subscribers to telecommunication services stood at 53.7 million by the end of 2011 where prepaid customers accounted for 87 percent of overall subscribers. The rate of mobile telecom penetration among the population was about 188 percent and predicted to continue growth and keep this positive trend in the coming years, the report said.
According to CITC 's estimates, the volume of spending on telecommunication and IT sector reached SR 83 billion in 2011 compared with SR 21 billion in 2002, at an annual average growth rate of 14 percent, where the IT sector captured 30 percent of total spending, mostly dedicated for hardware and IT services.
The volume of spending on telecommunication and IT is predicted to hit more than 10 percent in 2012 driven mainly by continued investments in government (public) sector, the report said.
The market of telecom services and IT is set to experience strong growth on demand for smart phone devices in the current year with the increased attention to technologies, data and telecom networks which, in turn, will lead to huge investments on support services in the sector, according to the report. The market of telecom services and IT in the Kingdom is the largest one in the Middle East in terms of market capitalization and volume of spending and accounts for 68 percent of the Gulf countries' total investments in the sector, and exceeded SR 125 billion in the last 10 years, the report said.
Arab News
4 August
