"Kuwait Telecommunications Report Q2 2014" Published

From: Fast Market Research, Inc.
Published: Tue Apr 15 2014

Kuwaiti government policy is impacting the telecoms market after it clamped down on expatriate workers in 2013, with plans to cut its 1.8mn expatriates by 100,000 annually over the next decade. This poses a downside risk to our subscriptions growth outlook on the back of a higher negative net migration rate. In view of this development, we reiterate our view that Kuwaiti telecoms services providers, particularly the country's three mobile operators, must diversify their services portfolios and, consequently, revenue streams to offset the expected decline in revenues from traditional services on the back of market saturation and intense competition. Service development is expected to concentrate on wireless data services, and high capacity wireline broadband bundled with pay-TV services.

Full Report Details at
- http://www.fastmr.com/prod/782557_kuwait_telecommunications_report_q2_2014.aspx?afid=301

Key Data

* The mobile sector was flat on a q-o-q basis in Q313, compared to growth of 4% during the same period in 2012.
* Monthly blended ARPU was also flat in Q313 as an increase in Zain's Q313 ARPU offset a decline in Wataniya's ARPU during the same period.

Key Trends And Developments

In October 2013 a consortium of four telecoms operators in the GCC region collaborated to create the Middle East-Europe Terrestrial System (MEETS), a 1,400km terrestrial fibre optic network running from Fujairah, on the southeast coast of the United Arab Emirates, to Kuwait. MEETS acquired a 15-year licence to activate and manage a dormant fibre-optic cable built as a part of the power grid built by the GCC Interconnection Authority, which runs from Fujairah, through the UAE, to Saudi Arabia, Bahrain and Qatar. The four operators intend to invest approximately US$35mn in the network, with an estimated capacity of 2,300Gbps. BMI views investments in international connectivity positively, with knock-on effects of higher capacity and lower cost benefitting domestic markets.

Wireless data service rollout continued in Kuwait in the final quarter of 2013. In December 2013 Wataniya announced it completed a US$400mn infrastructure project, which will enable it to upgrade its LTEAdvanced (LTE-A) network. Meanwhile, VIVA announced its LTE network upgrade plans in September 2013. The operator's core network has already been upgraded to support theoretical download speeds of up to 1Gbps. Zain followed with an announcement in November that it will roll-out its LTE-A network with a focus on highly populated areas. BMI expects the LTE-A networks to enable the operators offer converged services for residential and corporate customers over their wireless data networks.

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