New Market Report Now Available: Kuwait Telecommunications Report Q4 2013

With the mobile penetration rate in Kuwait nearing 215% as of June 2013, and with blended ARPUs still falling slowly, it is clear there is little opportunity for organic growth in this small and mature market. That said, newcomer VIVA Kuwait continues to attract new customers. This suggests, however, that a large number of prepaid accounts with short lifespans are accruing and coming quarters could see operators disconnect many technically inactive accounts. Mobile number portability (MNP) was introduced in June 2013, which could lead to an uptick in price promotions, adding further to the problem of delinquent accounts while also sapping ARPUs. Operators should strive to attract more valuable contract customers and their launches of 4G LTE services should help in this regard. Further efforts to establish an independent regulatory authority are also to be welcomed, although we are not convinced this entity will be realised in the near term.

Full Report Details at
- http://www.fastmr.com/prod/684737_kuwait_telecommunications_report_q4_2013.aspx?afid=301

Key Data

* The mobile sector grew by 3.5% q-o-q in Q1213, compared to growth of 3.7% during the same period in 2012. More reliable data have been obtained from VIVA since our last update, raising our historical data and adding impetus to our five-year forecasts.
* Monthly blended ARPU continued on a downward trend in Q213, falling by 2% q-o-q. LTE launches have yet to have a tangible effect on ARPU trends.

Key Trends And Developments

Mobile number portability (MNP) was introduced in Kuwait in June 2013, although the regulations governing its use had been adopted in April. The delay was attributed to difficulties in preparing the billing systems and marketing the services to customers. Porting is free and should take no more than 24 hours. The introduction of MNP will allow for more creative pricing in the mobile market. BMI believes that operators' reported ARPUs will fall as a result.

In mid-July 2013, Wataniya Telecom launched its 4G network and said that by the end of the year it would be covering most of Kuwait. Wataniya claimed to have invested more than US$350mn in LTE technology, upgrading its towers and building new ones. At launch, customers could access the internet via fixed and pocket routers for a monthly subscription of just KWD17 (US$59) with a total usage of 60GB per month for 12 months.

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