BMI’s Q311 update on Kuwait’s telecommunications market contains latest operational data from market leader Zain and second-ranked Wataniya, which resulted in a slight revision in forecasts for the mobile market. Our fixed-line and internet analysis and forecast remains largely unchanged as latest official data by the Ministry of Communications (MoC) still relates to 2009. Meanwhile, we introduced mobile ARPU forecasts for the Kuwaiti mobile market based on the weighted average of available ARPUs in the mobile market.
After two consecutive quarterly losses in H210, market leader Zain recorded positive growth in Q111, albeit muted with net additions of just 17,000 subscribers. Second-ranked Wataniya recorded its first ever quarterly subscriber net loss during Q111. Wataniya lost 21,000 subscribers or 1.2% of its subscriber base. The slow growth of Kuwait’s two biggest mobile operators since mid-2010 supports BMI’s view of increasing saturation in the mobile market resulting in slower growth. In future, we expect mobile operators to focus on revenue growth using higher value services. This will largely depend on the roll-out of mobile data networks and the migration of subscribers onto postpaid contracts. Kuwait’s three mobile operators are investing significantly in the roll-out of advanced data networks. However, only Zain seems to have succeeded in building a relatively large postpaid subscriber base. Wataniya’s postpaid subscriber base contracted considerably between June 2010 and March 2011. Meanwhile, BMI believes third-ranked Viva’s subscriber base is mainly prepaid, based on its value-led strategy.
Zain’s superior subscriber mix is reflected in its high ARPU, which was US$51 at the end of Q111. notes this is one of the highest in the region. Our maiden ARPU forecast for the Kuwaiti mobile market is based on the weighted average of ARPUs from Zain and Wataniya, representing about 81.2% of the mobile market by subscribers. While we expect competition between the three mobile operators and the saturating market to increase downward pressure on ARPU, we expect operators to achieve ARPU stability through premium offerings and value-added services.
In June 2011 Kuwait's Ministry of Communications (MoC) urged local internet service providers (ISPs) to reduce their tariffs to boost competition in the sector. Further, the ministry's undersecretary, Abdulmuhsen al-Mazidi, said the MoC intends to resolve internet tariff-related issues soon. However, BMI believes greater competition is required in the internet and broadband sectors. The government revealed in November 2010 that it had suspended the issuance of licences for new internet service providers (ISPs) until a separate telecoms regulator from the MoC could be established in the country. Currently, as we have stated, the interests of the MoC are in conflict as it is the sole provider of fixed line services. An independent regulatory body could be charged with granting licences and setting the relevant standards and conditions required to encourage greater competition.
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Executive Summary 6
SWOT Analysis 7
Kuwait Mobile SWOT 7
Kuwait Wireline SWOT 8
Kuwait Political SWOT 9
Kuwait Economic SWOT. 10
Kuwait Business Environment SWOT 11
Business Environment 12
Middle East And North Africa. 12
Middle East And North Africa Q311 Telecoms Business Environment Ratings 17
Kuwait 17
Industry Forecast Scenario 19
Mobile 19
Table: Telecoms Sector – Mobile – Historical Data & Forecasts 19
ARPU 21
Table: Monthly Blended ARPU 21
Fixed Line 23
Table: Telecoms Sector – Fixed Line – Historical Data & Forecasts 23
Internet 25
Table: Telecoms Sector – Internet – Historical Data & Forecasts 25
Market Data Analysis 27
Mobile 27
Table: Kuwait Mobile Market Share, Q410 28
Subscriber Mix 29
ARPU 30
3G 31
Mobile Contract Wins 33
Table: Mobile Contract Wins 33
Mobile Content 35
Country Outlook 39
Mobile Payments 40
Value-Added Services Timeline 41
Table: Selected VAS 41
Mobile Operator Data 43
Table: Kuwait Mobile Market Overview 43
Table: Zain (formerly MTC) 44
Table: Viva 45
Table: Wataniya 45
Fixed Line 46
VoIP 47
Internet 48
WiMAX 51
IPTV 51
Wireline Contract Wins 52
Table: Wireline Contract Wins 52
Regulatory Environment & Industry Developments 53
Table: Kuwait – Regulatory Bodies & Their Responsibilities 53
Legislation And Market Liberalisation 54
Regulation 55
Licensing And Spectrum 56
Industry Developments 57
Etisalat Opts Out Of Zain Deal 57
Competitive Landscape 58
Key Players 58
Table – Key Players: Kuwait Telecoms Markets 58
Table – Selected Operators Financial Indicators 58
Company Monitor 59
Ericsson 59
Table: Ericsson Quarterly Net Sales By Division, SEKmn 59
Company Profiles 63
Zain (formerly MTC Group) 63
Wataniya Telecom 68
Regional Telecommunications Penetration Overview 73
Fixed Line 73
Table: Regional Fixed-Line Penetration Overview 73
Mobile 74
Table: Regional Mobile Penetration Overview 75
Broadband 75
Table: Regional Broadband Penetration Overview 76
Country Snapshot: Kuwait Demographic Data 77
Section 1: Population 77
Table: Demographic Indicators, 2005-2030 77
Table: Rural/Urban Breakdown, 2005-2030 78
Section 2: Education And Healthcare 78
Table: Education, 2002-2005 78
Table: Vital Statistics, 2005-2030 78
Section 3: Labour Market And Spending Power 79
Table: Employment Indicators, 1997-2006 79
Table: Consumer Expenditure, 2000-2012 79
Glossary Of Terms 80
Table: Glossary Of Terms 80
BMI Methodology 81
How We Generate Our Industry Forecasts 81
Table: Key Indicators For Telecommunications Industry Forecasts 81
Telecoms Business Environment Ratings 83
Risk/Reward Ratings Methodology 83
Table: Ratings Indicators 84
Weighting 85
Table: Weighting Of Indicators 85
Sources 85
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