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Abu Dhabi, UAEWednesday 24 April 2019

GCC telecom operators lead regional peers, Fitch Solutions says

The UAE is the most attractive mobile market in the Mena region

Etisalat's first quarter net profit rose as the company gained new customers. Reuters
Etisalat's first quarter net profit rose as the company gained new customers. Reuters

The telecommunications companies in the Arabian Gulf are among the leading operators in the Middle East and North Africa on the back of GCC consumers’ spending power, economic diversification and investment in advanced technologies.

The UAE is the most attractive telecoms market in the Mena region due to "its strong combination of high rewards and low risks", according to a report by Fitch Solutions. The Arab world's second largest economy scored 56.3 out of 100 points, compared with the regional average of 44.2, in a Fitch index.

"In the face of limited organic growth opportunities and with the penetration rate reaching very high in the third quarter of 2018, [UAE] operators Etisalat and du are focusing on high value post-paid and enterprise subscriptions, while shedding inactive prepaid subscriptions,” the report said.

The UAE is followed by Saudi Arabia, the biggest Arab economy, which declined by 0.1 point due to a slightly lower country risk score. Scores for Bahrain in the third place and Oman in the sixth did not change this quarter.

A higher penetration rate and a decline in mobile subscribers led to Kuwait coming in at fifth place.

Gulf telecoms are focused on digitalisation of the industry and the integration of 5G services – which are poised to include rapid data transfer rate, energy saving, cost reduction and widespread device connectivity through Internet of Things.

Operators in the UAE stand to gain an additional $3.3 billion (Dh12.1bn) in revenues by 2026 from the digitalisation of industries, according to Swedish technology company Ericsson that works with regional telecom operators such as du, Etisalat and Kuwait's Zain Group.

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Morocco jumped two ranks up to seventh place thanks to an improved economic outlook this year. The North African country's mobile market is expected to stay positive in the medium and long term, as operators remain focused on expanding 4G services and attracting post-paid subscribers.

Iraq, ranked eighth in the index, has witnessed a sustained growth of mobile subscriptions with the restoration of services in the western and northern parts of the country, reported Fitch.

Lebanon, one of the most expensive countries in the world for mobile use, ranked 14th in the index and is "held back by low mobile growth prospects in the near future".

Syria, Yemen and Libya trail their regional peers at the bottom of the index.

Updated: January 21, 2019 03:06 PM

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