Wednesday, April 5, 2017
CRA 2016 Market Assessment Reflects 1.7 Percent GDP Contribution
Doha,The Communications Regulatory Authority (CRA) has conducted an assessment of the telecommunications sector for the fiscal year 2016 showing that the sector contributed 1.7 percent to Qatar's GDP, up from 1.3 percent in 2014, towards effective diversification of the economy. The telecommunications market also saw investments of around QR 1.25 billion (12 percent of service providers' annual revenues) towards the development of infrastructure and services and in preparation for future technologies.The assessment confirms that the consumers benefited from competition in the mobile market. However, there is a distinct lack of competition in the fixed market. It is also evident that the service providers continue to diversify in providing innovative services and products, adapting new business models paving the way to a truly digital economy. Market revenues remain unchanged compared to 2015 (around QR 10 billion), a sign that the mobile telecommunication market in Qatar has matured. This is due to an effective competition framework implementation in the mobile market and a different population mix.Service providers have adapted to these changes, enhancing efficiency and competitive prices, as shown in improving Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) margins. Ooredoo's EBITDA margin increased in 2016 from 47 percent to 49 percent while Vodafone's increased from 25 percent to 31 percent.The service providers are also diversifying their revenue streams into associated activities, such as handset and equipment sale, data center activities, IP-TV, etc.., accounted for 22 percent of their revenues in 2016, up from around 19 percent in 2014."The ICT sector in Qatar continues to make a valuable contribution to the national economy and we are now seeing a mature market develop," CRA President Mohammed Ali Al Mannai said. "Service providers are adapting well to this macro change by diversifying their businesses and becoming more efficient. This is positive for consumers as the impact of competition in the mobile market has reduced prices and increased the range and quality of services that are available."CRA is pleased to see service providers investing part of revenues for future growth, innovation, and demand. These developments are in-line with the CRA's mission to foster a sustainable marketplace and improve consumers experience. CRA is now working expediently to avail the benefits of competition for all consumers in the fixed line market," he added.Mobile Market Qatar has one of the highest penetration rates in the whole MENA Region of 176 percent behind only the UAE and Bahrain. However, the overall mobile penetration decline by 8 percent from 2015 can be attributed to a changing population mix, deactivated SIM cards as well as SIM cancellations because of noncompliance with the registration process.The service provider's average revenue per user (ARPU) in Qatar remains the highest in the Ooredoo and Vodafone Group. Compared to Q4 2015 Ooredoo's ARPU increased slightly, whereas Vodafone's has slightly decreased.Overall, the Qatari market remains highly dependent on pre-paid consumers, which account for 83 percent of the subscriptions.Fixed-Line Markets and Internet Fixed line network development in Qatar is dominated by Ooredoo, and 99 percent of Qatar's households are in areas covered by a fiber optic network. Ooredoo's market share remains stable with around 97 percent. According to Qatar's ICT Landscape 2015: Households and Individuals, 86 percent of the households have fixed the wired broadband network. With a nationwide fiber optic network, consumers can enjoy a high service speed, with 90 percent of consumers subscribed to packages of 10 Mbps and above, up from 72 percent at the end of 2014. The number of double play consumers who subscribing to voice and broadband services increased by almost 10 percent in 2016 while the number of triple play consumers who subscribing to voice, broadband and IP-TV services increased by almost 20 percent in the same period. These figures indicate consumers are becoming more sophisticated in their services consumption. This evolution will, in the medium term, help to increase the service providers' revenues.
