STC to reach 500,000 homes with fibre in 2012
Dubai, May 4, 2012
Saudi Telecom Co (STC) aims to connect 500,000 homes in the kingdom with optical fibre for highspeed broadband, but a lack of spectrum is limiting the adoption of next-generation mobile services, a top executive said.
Saudi Arabia's 26.5 million people had 1.95 million fixed broadband subscriptions at the end of 2011, according to the telecoms regulator, while of these only 18,500 are high-speed fibre-to-the-home (FFTH) connections, Informa Telecoms and Media estimates.
'With FTTH, we're looking to pass 500,000 homes by the end of this year and go up to 2 million in 2013,' Jameel Al-Molhem, Saudi Telecom chief executive for Saudi Arabia, told a conference in Dubai.
Slumping margins on conventional voice calls have prompted STC and rivals Mobily, an affiliate of the United Arab Emirates' Etisalat, and Zain Saudi to bet on soaring demand for broadband to bolster income.
That strategy seems to be working - STC's first-quarter profit rose 60 percent, while its mobile broadband revenue was up 145 percent, Bahrain's Securities & Investment Co (SICO) wrote in a note.
Potential further growth is huge, with only 41 percent of Saudis using the internet at the end of 2010, according the International Telecommunications Union's most recent data.
Analysts say this relatively low penetration, which is barely half that of the neighouring United Arab Emirates, is partly due to a lack of fixed-line infrastructure in the vast kingdom that is more than twice the size of France and Germany combined.
So telecoms operators want their roll-out of next generation long-term evolution (LTE) mobile networks, which potentially offer twice the internet speeds of 3G, to help fill this void, although they are being hampered by a lack of spectrum.
'You cannot do a big bang on LTE without having the right frequencies,' said Molhem. 'The frequency situation in Saudi is also putting the brakes on the potential ... to see real money coming from LTE. If you want to connect rural and small cities and to be profitable also, then LTE is something you can use.'
Informa estimates there were only an estimated 12,500 LTE users in Saudi Arabia at March-end.
'The key problem the operators have with LTE is that they don't have their preferred spectrum, which is reserved for the military,' said Matthew Reed, a senior Informa analyst.
Saudi's mobile operators were unable to launch LTE using their preferred frequency, so they had to reallocate frequencies that were meant to be for other services.
'Saudi operators don't yet have the spectrum to carry large volume of data traffic over LTE,' said Reed. 'Also, there's a lack of LTE devices and operators haven't yet convinced many consumers that it is worth switching from 3G handsets.' – Reuters
More IT & Telecommunications Stories
- VIVA launches exclusive rewards program
- US govt to shed control of net addresses
- Etisalat sets ultimatum for SIM card registration
- Acer targets double digit growth in Saudi
- UAE mobile radiation levels below global standards
- Arpu's T-Pay gateway draws top game vendors
- SAP unveils new cloud platform
- Zain launches smartphone insurance
- Windows XP users warned on usage risks
- Tecom units welcome 181 new companies
- Ooredoo chairman joins WB gender equality council
- Mobily, Jasper start wireless M2M service
- Telecom Egypt expects mobile licence in Mar or Apr
- Sandvine wins big Etisalat follow-on order
- Aveva software for engineering plant design
- Nawras to upgrade VSat services across Oman
- Mobily, Huawei sign smart network contract
- Etisalat, Tata launch video connect service
- Talia seals new partnership with Thuraya
- 4-pillar approach for telecom operators to boost growth
- Dubai mobile emissions below global standards
- Nawras signs capacity contract with SES
- Etisalat showcases satellite solutions at Cabsat
- Batelco launches 4G LTE roaming
- Gulf Air clinches best innovation award
- Viva inks Pepsi partnership deal
- Du offers free smarphones on tablet purchase
- Batelco launches double credit promotion
- Cyber threats focus of Bahrain security talks
- Bahrain tech expo to honour innovators