Dubai: With the rapid growth in mobile telephony coming to an end, the next phase of revenue generating for telecom providers will be broadband services.
This is one of the results of a study by Global Investment House, based in Kuwait, that was presented last week.
The analysts looked at the entire GCC market and found that companies were focusing their attention on the broadband segment as one of the core drivers, as cellular and fixed line markets reach saturation.
For the future, the analysts recommended etisalat and its partly owned subsidiary in Saudi Arabia, Mobily or Etihad Etisalat.
"In the GCC telecom space etisalat and Mobily are our top picks," said Faisal Hasan, head of research at Global Investment House.
The study said the rapid growth in mobile subscribers in recent years had been boosted by price competition and more companies stepping into the market as part of liberalisation measures. The growth would slow down, it said.
The compound annual growth rate seen at 29.9 per cent between 2005 and 2009, would drop to 8.5 per cent in the period from 2010 to 2012, the analysts said.
On the other hand, the study anticipates that the mobile penetration rate would rise from 171.9 per cent in 2009 to 184 per cent in 2010 and to 195 per cent in 2012, meaning that at that time almost each resident in those countries on average would possess two SIM cards.
"For incumbents, we are of the opinion that going forward in home markets growth is likely to be limited and careful diversification in other markets is the only way forward for further growth," the study said.
"We believe that operators need to be more diligent in their strategy because diversification in other unfamiliar markets beyond the GCC can prove to be difficult."
The performance of incumbent operators in the GCC had increasingly become dependent on overseas operations.
"They have invested in overseas markets to hedge against the decline in revenues and market share in the domestic market," the analysts said.
To offset the saturated markets, Global Investment House said operators needed to concentrate on the broadband market.
"The next phase of growth in the GCC will be led by increased broadband penetration which has lagged behind due to both demand-side and supply-side factors," the study states.
"However, advances in technology, an increase in awareness, availability and affordability have played a key role in influencing broadband growth which is likely to accelerate in the next three to four years."
Broadband penetration was not just increasing but also replacing the dial-up connections in these countries as subscribers migrated to these higher speed connections.
The broadband connections as percentage of total internet connections in the GCC were around 38 per cent a few years ago. In 2009 it was around 50 per cent and likely to grow.
• 67.8m the number of subscribers to mobile phone accounts in the GCC
• 50% number of internet connections which are broadband
• 7.07m the number of fixed-line phone account subscribers across the GCC
• 16.96m the total number of internet users across the GCC as of 2009
Monday, August 16, 2010
Thursday, August 12, 2010
Mobily's net profit jumps 40%
RIYADH: Etihad Etisalat (Mobily) announced the interim consolidated financial results for the period ended June 30, 2010, in which the net profit for the first half of the year amounted to SR1.62 billion as compared to SR1.16 billion for the same period of last year, presenting a 40 percent growth.
The net profit for Q2, 2010 amounted to SR901 million against SR675 million for the same quarter of last year, presenting a growth of 33 percent and compared to a net profit of SR714 million for Q1, 2010, according to a press release received here on Tuesday.
The revenues for Q2, 2010 amounted to SR3.97 billion presenting a growth of 24 percent over the same period of last year. The operating profit for Q2 amounted to SR940 million against SR728 million for the same quarter of last year, presenting an increase of 29 percent. Earnings per share (EPS) for the first six months of the year amounted to SR2.31 compared to SR1.65 for the same period of last year.
Mobily's Chairman, Eng. Abdulaziz Alsaghyir said: "The growth of our Q2 revenues is due to the increase in broadband revenues and attracting more postpaid customers, in addition to the increase in the international interconnection margin, all of which have led to an increase in EBITDA to reach SR1.39 billion for Q2, 2010 as compared to SR1.18 billion for the first quarter of this year. Our EBITDA for Q2, 2009 was SR1.13 billion. Besides an increase in usage levels and the success of Mobily's customer loyalty program, Neqaty."
Alsaghyir added: "Mobily has adopted its strategy for the next five years, known as 'GED', standing for Growth, Efficiency and Differentiation, to provide integrated telecom services built around fixed and mobile broadband technologies. The appeal of the telecom sector in Saudi Arabia and the Kingdom's strategic and economic strength will help Mobily to achieve its goals."
The net profit for Q2, 2010 amounted to SR901 million against SR675 million for the same quarter of last year, presenting a growth of 33 percent and compared to a net profit of SR714 million for Q1, 2010, according to a press release received here on Tuesday.
The revenues for Q2, 2010 amounted to SR3.97 billion presenting a growth of 24 percent over the same period of last year. The operating profit for Q2 amounted to SR940 million against SR728 million for the same quarter of last year, presenting an increase of 29 percent. Earnings per share (EPS) for the first six months of the year amounted to SR2.31 compared to SR1.65 for the same period of last year.
Mobily's Chairman, Eng. Abdulaziz Alsaghyir said: "The growth of our Q2 revenues is due to the increase in broadband revenues and attracting more postpaid customers, in addition to the increase in the international interconnection margin, all of which have led to an increase in EBITDA to reach SR1.39 billion for Q2, 2010 as compared to SR1.18 billion for the first quarter of this year. Our EBITDA for Q2, 2009 was SR1.13 billion. Besides an increase in usage levels and the success of Mobily's customer loyalty program, Neqaty."
Alsaghyir added: "Mobily has adopted its strategy for the next five years, known as 'GED', standing for Growth, Efficiency and Differentiation, to provide integrated telecom services built around fixed and mobile broadband technologies. The appeal of the telecom sector in Saudi Arabia and the Kingdom's strategic and economic strength will help Mobily to achieve its goals."
Saturday, August 7, 2010
NBN makes a SerCo choices'
NBN Co has named the contractors it has selected to construct the passive optical fibre for the first five release sites of the Federal Government's national broadband network.
Three of the selected organisations are Silcar for Armidale in NSW; Transfield Services for Minnamurra and Kiama Downs in NSW, and SA power distribution
company ETSA Utilities for Willunga.
Ergon Energy will construct the passive optical fibre network in Townsville, and at the fifth site, Brunswick in Victoria, NBN Co is discussing with Telstra the use of the telco's existing infrastructure,explained Mike Quigley, CEO of NBN Co.
"The selection of a mix of construction contractors and power utilities will further allow NBN Co to evaluate the suitability of different contractor and
construction models," Quigley added.
Three of the selected organisations are Silcar for Armidale in NSW; Transfield Services for Minnamurra and Kiama Downs in NSW, and SA power distribution
company ETSA Utilities for Willunga.
Ergon Energy will construct the passive optical fibre network in Townsville, and at the fifth site, Brunswick in Victoria, NBN Co is discussing with Telstra the use of the telco's existing infrastructure,explained Mike Quigley, CEO of NBN Co.
"The selection of a mix of construction contractors and power utilities will further allow NBN Co to evaluate the suitability of different contractor and
construction models," Quigley added.
Tuesday, August 3, 2010
DU rocks the world
Emirates Integrated Telecommunications Company, known as du, is expected to earn a net profit of Dh103 million in the second quarter, 79 per cent more than the telecom operator reported in the same period last year, according to Al Mal Capital -- an investment bank.
The Dubai-based carrier had reported a four-fold gain for the first quarter profit, which reached Dh58 million compared to Dh23.4 million it earned during April to June in 2009.
It is also projected that the telecom operator's second quarter net profit would be higher by 6.2 per cent, compared to the first quarter's profit of Dh97 million.
A potential catalyst for the UAE telecoms sector is the opening up of the fixed voice and broadband segment throughout the UAE.
In 2009 du had a 15 per cent revenue market share of this Dh6.55 billion segment and we expect du to gain market share over the medium term once infrastructure sharing is launched," Al Mal said in a statement.
The carrier's revenue is expected to grow to Dh1.63 billion, a 3.4 per cent quarter-on-quarter rise and 25 per cent year-on-year gain.
EBITDA (earnings before interest, taxes, depreciation, and amortisation) is projected to grow to Dh400 million in the second quarter, a 4.3 per cent rise compared to first quarter and 26 per cent gain over 2009 second quarter. EBITDA margins are expected to improve on quarter-on-quarter to 24.5 per cent in the second quarter from 23.2 per cent in the first quarter and 18.5 per cent compared to the second quarter last year.
Du's Dh1 billion rights issue has helped to strengthen its balance sheet. However, it has taken its toll on du's share price as investors have sold shares to take up their rights entitlement, at Dh1.75 per share.
The Dubai-based carrier had reported a four-fold gain for the first quarter profit, which reached Dh58 million compared to Dh23.4 million it earned during April to June in 2009.
It is also projected that the telecom operator's second quarter net profit would be higher by 6.2 per cent, compared to the first quarter's profit of Dh97 million.
A potential catalyst for the UAE telecoms sector is the opening up of the fixed voice and broadband segment throughout the UAE.
In 2009 du had a 15 per cent revenue market share of this Dh6.55 billion segment and we expect du to gain market share over the medium term once infrastructure sharing is launched," Al Mal said in a statement.
The carrier's revenue is expected to grow to Dh1.63 billion, a 3.4 per cent quarter-on-quarter rise and 25 per cent year-on-year gain.
EBITDA (earnings before interest, taxes, depreciation, and amortisation) is projected to grow to Dh400 million in the second quarter, a 4.3 per cent rise compared to first quarter and 26 per cent gain over 2009 second quarter. EBITDA margins are expected to improve on quarter-on-quarter to 24.5 per cent in the second quarter from 23.2 per cent in the first quarter and 18.5 per cent compared to the second quarter last year.
Du's Dh1 billion rights issue has helped to strengthen its balance sheet. However, it has taken its toll on du's share price as investors have sold shares to take up their rights entitlement, at Dh1.75 per share.
Monday, August 2, 2010
Voda has a new man
After three years in charge, Farmside Chief Executive Tony Baird has resigned to take up a role of Head of Networks and Operations at Vodafone.
Farmside said that while they look to fill the gap, Board Chairman Richie Smith will assume the role of Acting Chief Executive.
“Under Tony’s guidance Farmside has grown over 700% with a customer base of over 11,000 rural and urban New Zealanders. Tony has played a huge part in leading Farmside towards being New Zealand’s leading rural telecommunications provider and has himself been a strong champion for the rural sector,” smith said.
Farmside said that while they look to fill the gap, Board Chairman Richie Smith will assume the role of Acting Chief Executive.
“Under Tony’s guidance Farmside has grown over 700% with a customer base of over 11,000 rural and urban New Zealanders. Tony has played a huge part in leading Farmside towards being New Zealand’s leading rural telecommunications provider and has himself been a strong champion for the rural sector,” smith said.
Friday, July 30, 2010
Africa and Middle East going off?
The Africa and Middle East (AME) market represents a great opportunity for telecom operators and vendors alike, but huge obstacles will have to be surmounted before the region's potential is fully realized.
That's one of the main findings of a new Africa & Middle East Telecom Insider report from Pyramid Research , "3G & WiMax to Drive Broadband Services Growth Through 2014."
The report's author, Hussam Barhoush, predicts that broadband penetration in the AME market will increase at a compound annual growth rate (CAGR) of 20.4 percent in the period between 2009 and 2014, a figure second only to Latin America on a global comparison.
As the report's title indicates, "traditional" (predominantly ADSL) fixed-line broadband will play second fiddle in this anticipated growth story, mainly due to poor-to-nonexistent wireline coverage in the more rural parts of the region, especially rural Africa. Instead, 3G and WiMax stand to make the biggest gains in the broadband battle.
WiMax, for example, accounted for just 1.9 percent of the region's fixed broadband connections in 2009, but Pyramid predicts this will grow to 8 percent by the end of 2014. Barhoush points out that WiMax networks are already, or close to being, deployed in most countries in the AME region. (See ITU Day 2: WiMax Brings It, Telecom Market Spotlight: Africa, Samsung Wins Saudi WiMax Deal, Moto Does WiMax in Jordan, and Alvarion Wins African Deal.)
Where fixed-line will continue to figure largely will be in the rich Gulf countries, in the shape of FTTH (fiber-to-the-home). Etisalat in the UAE, for example, plans to reach all UAE homes with fiber by the end of 2011. (See Etisalat Does FTTX With Zhone.)
Pyramid predicts that FTTx will account for 9 percent of the AME region's total fixed-line connections by the end of 2014.
But the barriers to ubiquitous broadband are obvious, notes the report. The cost of a PC in Mozambique, for example, equates to 66 percent of the country’s GDP per capita, putting it way out of reach of the vast majority of the population. And in some markets, around 40 percent of the population are illiterate, so worthwhile Internet browsing would not be possible even if the necessary technology were in place.
It's for these reasons that, even after the projected growth in the region in the coming years, broadband penetration levels will still only have reached 6.2 percent in AME by 2014.
That's one of the main findings of a new Africa & Middle East Telecom Insider report from Pyramid Research , "3G & WiMax to Drive Broadband Services Growth Through 2014."
The report's author, Hussam Barhoush, predicts that broadband penetration in the AME market will increase at a compound annual growth rate (CAGR) of 20.4 percent in the period between 2009 and 2014, a figure second only to Latin America on a global comparison.
As the report's title indicates, "traditional" (predominantly ADSL) fixed-line broadband will play second fiddle in this anticipated growth story, mainly due to poor-to-nonexistent wireline coverage in the more rural parts of the region, especially rural Africa. Instead, 3G and WiMax stand to make the biggest gains in the broadband battle.
WiMax, for example, accounted for just 1.9 percent of the region's fixed broadband connections in 2009, but Pyramid predicts this will grow to 8 percent by the end of 2014. Barhoush points out that WiMax networks are already, or close to being, deployed in most countries in the AME region. (See ITU Day 2: WiMax Brings It, Telecom Market Spotlight: Africa, Samsung Wins Saudi WiMax Deal, Moto Does WiMax in Jordan, and Alvarion Wins African Deal.)
Where fixed-line will continue to figure largely will be in the rich Gulf countries, in the shape of FTTH (fiber-to-the-home). Etisalat in the UAE, for example, plans to reach all UAE homes with fiber by the end of 2011. (See Etisalat Does FTTX With Zhone.)
Pyramid predicts that FTTx will account for 9 percent of the AME region's total fixed-line connections by the end of 2014.
But the barriers to ubiquitous broadband are obvious, notes the report. The cost of a PC in Mozambique, for example, equates to 66 percent of the country’s GDP per capita, putting it way out of reach of the vast majority of the population. And in some markets, around 40 percent of the population are illiterate, so worthwhile Internet browsing would not be possible even if the necessary technology were in place.
It's for these reasons that, even after the projected growth in the region in the coming years, broadband penetration levels will still only have reached 6.2 percent in AME by 2014.
Monday, July 26, 2010
Upgrade nationwide optical fibre and microwave links.
Vodafone Hutchison Australia (VHA) has announced plans to deploy thousands of new Ericsson microwave radio and optical fibre links throughout Australia.
The wireless vendor was contracted as turnkey project manager for VHA's nationwide transmission network, assuming responsibility for the design, supply, rollout and integration of new gear.
VHA has been working on the transmission project since Vodafone and Hutchison 3 merged last year, a spokesman said.
The contract came into effect last week, following what VHA described as an "extensive" request for proposals. The new network was expected to be launched within 12 months.
According to a statement from Ericsson, the new network would be scalable, and provide increased capacity to meet the increasing load of smartphone applications.
It is based on Ericsson's MHL 3000 DWDM platform, OMS 1400 series of optical transport products, and MINI-LINK TN microwave solution.
The VHA spokesman declined to specify transmission speeds, stating: "As we rollout the new transmission network, our customers will be able to enjoy faster data speeds and improved call quality."
"This will ultimately make the network more reliable and prepare it for future technologies."
"We're taking the opportunity to migrate our mobile backhaul to an all-IP network," said VHA's CTO, Andy Reeves.
"This allows us to greatly increase our network capacity and end-user speeds at a fraction of the cost of older backhaul technologies."
In May, VHA inked a seven-year managed services contract with Nokia Siemens Networks (NSN) to consolidate Vodafone and Hutchison 3's core networks, removing Ericsson kit in the process.
The NSN deal sparked a review of Ericsson's relationship with Hutchison 3. Ericsson had previously held the managed services contract for Hutchison 3's core network and IT.
Today, VHA told iTnews that it had "a successful working relationship with Ericsson which was formed through work with both Hutchison and Vodafone."
Ericsson's Australia and New Zealand CEO, Sam Saba, said: "We are extremely proud to have been chosen for this major upgrade to the transmission network.
"Ericsson's leadership in optical/DWDM and microwave transmission networks will enable VHA's mobile network backbone to expand capacity and meet the dramatic rise in traffic."
The wireless vendor was contracted as turnkey project manager for VHA's nationwide transmission network, assuming responsibility for the design, supply, rollout and integration of new gear.
VHA has been working on the transmission project since Vodafone and Hutchison 3 merged last year, a spokesman said.
The contract came into effect last week, following what VHA described as an "extensive" request for proposals. The new network was expected to be launched within 12 months.
According to a statement from Ericsson, the new network would be scalable, and provide increased capacity to meet the increasing load of smartphone applications.
It is based on Ericsson's MHL 3000 DWDM platform, OMS 1400 series of optical transport products, and MINI-LINK TN microwave solution.
The VHA spokesman declined to specify transmission speeds, stating: "As we rollout the new transmission network, our customers will be able to enjoy faster data speeds and improved call quality."
"This will ultimately make the network more reliable and prepare it for future technologies."
"We're taking the opportunity to migrate our mobile backhaul to an all-IP network," said VHA's CTO, Andy Reeves.
"This allows us to greatly increase our network capacity and end-user speeds at a fraction of the cost of older backhaul technologies."
In May, VHA inked a seven-year managed services contract with Nokia Siemens Networks (NSN) to consolidate Vodafone and Hutchison 3's core networks, removing Ericsson kit in the process.
The NSN deal sparked a review of Ericsson's relationship with Hutchison 3. Ericsson had previously held the managed services contract for Hutchison 3's core network and IT.
Today, VHA told iTnews that it had "a successful working relationship with Ericsson which was formed through work with both Hutchison and Vodafone."
Ericsson's Australia and New Zealand CEO, Sam Saba, said: "We are extremely proud to have been chosen for this major upgrade to the transmission network.
"Ericsson's leadership in optical/DWDM and microwave transmission networks will enable VHA's mobile network backbone to expand capacity and meet the dramatic rise in traffic."
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