Arab Telecom Markets: Present & Potential

Jawad Abbassi
Founder, General Manager Enterprise Ireland Seminar Dublin, Ireland April 16 2013

Outline

Telecom markets overview Smartphones and smartphone applications E-commerce Entertainment (TV, Social Media and Games)

Arab cellular lines reached 373.9 million by H1 2012
Cellular penetration %
250% 200% 150% 100% 50% 0%
Algeria* Bahrain* Egypt*

Cellular lines (000s)
0 Algeria* Bahrain* Egypt* Iraq* Jordan Kuwait Lebanon* Libya* 8,368 5,221 3,677 11,325 3,622 37,422 5,118 3,295 2,994 54,500 26,486 12,910 12,729 12,745 12,873 26,345 1,915 95,174 20,000 40,000 37,148 60,000 80,000 100,000

99.1% 144.9% 115.7% 78.0% 132.5% 139.0% 81.9% 174.6% 100.9% 115.4% 184.5% 77.9% 173.8% 194.2% 76.7% 59.7% 118.5% 217.0% 53.2%

Iraq* Jordan Kuwait Lebanon* Libya* Mauritania* Morocco Oman Palestine* Qatar Saudi Arabia Sudan Syria Tunisia UAE Yemen*

Mauritania* Morocco Oman Palestine* Qatar

Saudi Arabia Sudan Syria Tunisia UAE Yemen*

*Estimated

Source: Arab Advisors Group

306 20.5% 56.3% 19.7% 22.2% 46.367 1.0% 62.Arab Internet users by June 2012 80% 60% Internet users penetration % 40% 20% 0% Internet users (000s) 0 Algeria Bahrain Egypt Jordan Kuwait Lebanon Mauritania Morocco Oman Palestine Qatar Saudi Arabia Syria Tunisia UAE Yemen 876 741 573 79 608 5.5% 33.3% 50.9% 32.6% 14.454 Jordan Kuwait Lebanon Mauritania Morocco 6.6% 17.8% 31.3% 2.000 11.324 3.000 15.218 5.0% 18.796 2.566 Syria Tunisia UAE Yemen Note: The Arab Advisors Group estimates Internet users based on an Account Usage Multiplier multiplied by the Internet accounts Source: Arab Advisors Group .6% 26.000 10.102 2.434 Oman Palestine Qatar Saudi Arabia 14.000 30.846 3.7% 23.364 1.7% Algeria Bahrain Egypt 15.

60% 2.61% 14 15 *Estimated Source: Arab Advisors Group .1% 7 8 9 9.50% 7.8% 11.014 2.The Arab fixed broadband market continued its growth during the third quarter of 2012 Fixed broadband penetration % 20% 15% 10% 5.000 1.97% 1.085 500 1.0% 10 11 Saudi Arabia* Syria* Tunisia* UAE* Yemen* 12 13 0.83% 4.0% 3.250 215 516 968.500 2 3 4 5 6 Accounts as % of population 2.500 2.34% 12.39% 8.85% 5% 0% 1 Fixed broadband accounts (000s) Algeria* Bahrain* Egypt* Jordan Kuwait* Lebanon* Morocco Oman* Palestine* Qatar 107 173 175 2.9625 148 305 428 399 649 169 2.5% 4.26% 0.000 2.0% 16.

15 Countries in the Arab world commercially launched FTTH services by mid-November 2012 Commercially launched 79% Algeria Bahrain Egypt Iraq Jordan Kuwait Libya Mauritania Lebanon Morocco Sudan Oman Palestine Syria Qatar Saudi Arabia Tunisia UAE Yemen Not Available/ Planned 21% Source: Arab Advisors Group .

Five countries have not yet commercially launched WiMAX services (November 2012) 6 5 5 4 3 3 2 2 1 1 0 0 0 0 0 0 1 1 1 1 1 1 2 2 3 3 Iraq Syria Morocco Mauritania Palestine Kuwait Lebanon Tunisia Jordan Bahrain Source: Arab Advisors Group Saudi Arabia Algeria Yemen Oman Sudan Qatar Libya Egypt UAE .

4 Countries in the Arab world commercially launched LTE services by October 2012 Algeria Bahrain Egypt Iraq Kuwait Jordan Oman Lebanon Libya Mauritania Not Morocco Commercially Palestine launched yet Qatar Saudi Arabia UAE Commercially launched 21% 79% Sudan Syria Tunisia Yemen Source: Arab Advisors Group .

39 operators offered 3G/3.5G Number of operators that do not offer 3G/3.5G services in the Arab World by mid-November 2012 Mid – November 2012 November 2011 Number of operators offering 3G/3.5G Number of operators that do not offer 3G/3.5G Number of operators offering 3G/3.5G 39 37 14 16 Source: Arab Advisors Group .

11 had mobile TV services by September 2012 Number of operators offering Mobile TV services 3 3 2 2 2 2 2 2 1 1 1 1 1 1 0 Morocco Jordan Saudi Arabia Tunisia Kuwait Egypt Libya UAE Source: Arab Advisors Group Bahrain Oman Qatar .Of the countries that have LTE/3G/3.5G services.

Operators “pain”: Bandwidth hungry devices are stressing networks. 11 .The Future is here! At least for mobile operators! Internet penetration has increased multifold & Internet access through Mobile devices is likely to take precedence. Commoditized data access. Data revenues not growing at the same pace of costs.

Egypt Smartphone Survey 2012 . 60% 50% 43.1% 54.Smartphones boom in the Arab World: % of total handsets.4% 41. Jordan Smartphone Survey 2011. Lebanon Smartphone Survey 2012.3% Note: Percentages are calculated from the total handsets Source: Arab Advisors Group’s Saudi Smartphone Survey 2011. UAE Smartphone Survey 2011.6% 37. Kuwait Smartphone Survey 2012.6% 51.7% 40% 30% 20% 10% 0% Saudi Arabia Kuwait UAE Jordan Lebanon Egypt 8.

000 40.000 25.000 15.000 30.Smartphone applications annual revenues in Saudi Arabia reached an estimated US$ 45.000 45.000 35.354 Source: Arab Advisors Group .107 6.942 2.000 20.000 10.000 5.633 2.093 45.4 million in 2012 50.000 0 Saudi Arabia UAE Egypt Kuwait Jordan 10.

UAE Smartphone Survey 2011.On Smartphones: Social networking is most popular download in UAE. Lebanon & Jordan. Kuwait. Kuwait Smartphone Survey 2012. Lebanon Smartphone Survey 2012 . Jordan Smartphone Survey 2011. Games are most popular in Saudi Arabia Saudi Arabia UAE Kuwait Lebanon Jordan 120% 100% 80% 67% 96% 82% 81% 70% 60% 61% 55%57% 45% 62% 43% 43% 34% 32% 60% 45% 33% 19% 60% 40% 20% 0% Social networking 36% Games Music and audio Business Note: Percentages are calculated from the respondents who download applications to their smartphones Source: Arab Advisors Group’s Saudi Smartphone Survey 2011.

8% Source: Arab Advisors Group’s Jordan Smartphone Survey 2011. Saudi Smartphone Survey 2011 15 .Smartphone Application users in KSA have a higher preference for Arabic language than in UAE and Jordan Jordan 100% 91.5% 3.3% 1.7% 8.0% 50% 40% 30% 20% 10% 0% English Arabic French Note: Percentages are calculated from the total respondents who use applications on their smartphones KSA UAE 90.0% 46. UAE Smartphone Survey 2011.2% 8.2% 0.4% 90% 80% 70% 60% 50.

897 6.000 5.000 6.000 1.000 0 Saudi Egypt Jordan 1.000 3.858 370 Source: Arab Advisors Group’s Saudi Internet users and e-commerce survey 2011.9 billion 2010 e-commerce expenditure (US$ million) 8.000 7.000 2.Saudi Arabia’s annual e-commerce expenditure reached US$ 6.000 4. Egypt Internet users and Jordan Internet users and e-commerce survey 2012 .

Egypt Internet users and e-commerce survey 2012.60% of adult Internet users in Saudi Arabia use e-commerce 70% 60.4% 20% 10% 0% Saudi Arabia Egypt Jordan 24. Jordan Internet users and e-commerce survey 2012 .4% Note: Percentages are calculated from total sample size Source: Arab Advisors Group’s Saudi Arabia Internet users and e-commerce survey 2011.0% 60% 50% 40% 30% 22.

433 1.600 1.400 1.Annual e-commerce expenditure per ecommerce user in Saudi Arabia.000 800 600 400 200 0 Saudi Source: Arab Advisors Group 719 679 Jordan Egypt .200 1. Jordan and Egypt Annual e-commerce expenditure per e-commerce user (US$) 1.

Saudi Arabia 60% 50. A third to buy services.1% Egypt Jordan 40% 31. Egypt Internet users and e-commerce survey 2012.4% 12. Jordan Internet users and ecommerce survey 2012 .8% 11.0% 20% 14.8% 16.Saudi e-commerce users: Half use it to pay bills online.7% 0% Buy products online Pay bills online Pay for services online Note: Percentages are calculated from the total sample size Source: Arab Advisors Group’s Saudi Arabia Internet users and e-commerce survey 2011.8% 9.6% 8.0% 24.

E-commerce expenditure is growing strongly in Jordan E-commerce expenditure in Jordan (US$ million) 400 350 300 250 200 150 100 50 0 2008 2010 2011 181 192 370 Source: Arab Advisors Group’s Jordan Internet users and e-commerce survey 2008. Jordan Internet users and e-commerce survey 2012 . Jordan Internet users and e-commerce survey 2010.

Supply creates demand? % of banks offering remote banking services in Saudi Arabia & Qatar Saudi Arabia 100% 83% 80% 82% Qatar 60% 40% 28% 20% 35% 0% Internet banking Mobile banking Source: Arab Advisors Group’s Remote Banking Services in Saudi Arabia. Remote Banking Services in the State of Qatar .

Free-To-Air (FTA) satellite TV channels’ growth 700 104 channels added 642 600 538 500 474 487 400 370 300 200 205 290 263 200 100 155 100 0 Jan 2004 Jul 2005 Jan 2007 Apr 2010 April 2006 Nov 2005 Aug 2007 Mar 2009 Apr 2011 Oct 2006 Note: The satellite systems included in the analysis are Arabsat. Nilesat and Noorsat Source: Arab Advisors Group’s Satellite TV in the Arab World 2012 Mar 2012 .

Fully launched FTA satellite TV channels’ grew by 13% in 11 months 600 64 channels added 565 501 500 448 428 400 344 300 244 200 100 0 October 2006 August 2007 March 2009 April 2010 April 2011 March 2012 Note: The satellite systems included in the analysis are Arabsat. Nilesat and Noorsat Source: Arab Advisors Group’s Satellite TV in the Arab World 2012 .

9% 0.0% 19.0% 12.7% 8.Private Sector Promotional Interactive Children and Youth Educational Movies and Series Documentary Specialized General. Nilesat and Noorsat Source: Arab Advisors Group’s Satellite TV in the Arab World 2012 .8% 4.A plethora of choice for the Arab TV viewer 25.3% 0.2% 0.Mixed ownership Sports Business/ Financial Religious News and Current Affairs Health.0% 0.7% 9.0% 15.5% 0.8% 3.7% 5.0% GeneralGovernment Sector General. Nutrition and Cooking Music Note: The satellite systems included in the analysis are Arabsat.0% 5.6% 8.7% 9.7% 2.5% 2.8% 20.2% 10.9% 9.

2% OSN. 6.6% Al Majd. 12. Abu Dhabi Sports and Al Majd Source: Arab Advisors Group’s Satellite Pay TV operators in the Arab World 2012 . 11.9% Abu Dhabi Sports.3% Note: The satellite pay TV operators included in the analysis are OSN. 69.Orbit Showtime Network (OSN) offers the widest base of Pay TV channels Al Jazeera Sports+. Al Jazeera Sports+.

7% 4.6% 2.7% 10.9% 4.0% Note: Percentages are calculated from respondents who socialize through social networking websites Source: Arab Advisors Group’s Egypt Internet users and e-commerce survey 2012.1% 5.8% 7.9% 99.8% 99.0% 29. Jordan Internet users and e-commerce survey 2012 .Facebook dominates social media use amongst Internet users in Egypt & Jordan Egypt Jordan 120% 100% 80% 60% 40% 20% 0% Facebook Twitter Hi5 Netlog MySpace Other 52.8% 2.7%7.

000.Facebook accounts in 17 Arab Countries increased by 50.000 9.000.000 2.000.000.000.000 5.000 7.000 6.000 4.000 8. to exceed 36 million Facebook accounts by March 2011 10.000 1.9% between March 2011 and February 2012.000.000 3.000.000. Arab Advisors Group .000 0 Facebook accounts by February 2012 Source: Facebook Estimates.000.000.

The Arabic Massively Multiplayer Online (MMO) games market is growing rapidly Browser-based MMO games 100 90 80 70 60 50 40 30 20 10 0 April 2010 November 2011 40 7 85 10 Client-based MMO games Source: Arab Advisors Group’s Online Games in the Arab World 2012 .

7% of Arabic MMO games were developed in Europe by November 2011 Asia 11.4% Europe 64.2% MENA 22.7% Note: Percentages are calculated from a total of 85 BBMMO games available in Arabic Source: Arab Advisors Group’s Online Games in the Arab World 2012 .8% America 1.64.

2% Crime/Mafia. 8.5% Note: Percentages are calculated from a total of 85 BBMMO games available in Arabic Source: Arab Advisors Group’s Online Games in the Arab World 2012 .2% Historical. 8.1% Sci-Fi/Future. 16.2% Sports. 10.6% Modern Warfare. 27.2% Fantasy. 21. 8.3% of the browser-based MMO games available in Arabic are based on historical or fantasy settings Other.48.

wifi off-load is becoming a priority.Key takeaways • A diverse region (Arabic. Hindi. • E-commerce and m-commerce are poised to grow rapidly especially in middle income and rich countries. . Urdu. English) with solid well established operators • Mobile broadband boom is enabling a smartphone boom.

See you in Amman in June 2013 at 10th Convergence Summit 2013 500+ executives from all over the region .

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