Business | Telecoms
Fixed broadband services to generate Dh3.7b by 2015
Switch to all fibre network to boost pay TV, VoIP
- Gulf News Report
- Published: 00:00 August 22, 2010
- Image Credit: Oliver Clarke/Gulf News
- The UAE telecom market is expected to further grow in the next five years after a nationwide switch from copper to allfibre fixed line infrastructure by 2011.
Dubai: Fixed broadband services will be a significant source of growth in the UAE over the next five years, generating $1.01 billion (Dh3.7 billion) in 2015, up from $695 million in 2010, due to both increasing broadband penetration and to the switch to a nationwide all-fibre network by 2011, according to a new report from Pyramid Research.
Fibre deployment will boost uptake of Pay TV and VoIP (Voice over Internet Protocol) offers a precise profile of the country's telecommunications, media, and technology sectors, the researchers said. The survey provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies.
Service penetration
Since the UAE telecom market has caught up with those of the developed world in terms of service penetration, it can look forward to healthy but not dramatic growth between 2010 and 2015.
A key change over the next five years is the switch from copper to fibre fixed-line infrastructure that is currently under way and due to be completed by 2011, the report said.
Du, the smaller and newer of the UAE's two operators, initially took the lead with fibre deployment, notes Hussam Barhoush, Senior Analyst at Pyramid Research.
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"However, etisalat has already caught up and surpassed its new rival in terms of fibre roll out: Abu Dhabi, was the first capital in the world to be all fibre, as etisalat connected the city to the eLife FTTH [fibre to the home] network," says Barhoush.
Etisalat plans to have upgraded its whole fixed network to fibre by 2011.
"As well as providing a boost to broadband revenue, the change will lead to growth in Pay TV adoption, as operators use advanced technology to make IPTV services significantly more attractive than those of satellite operators," says Barhoush.
As broadband penetration rate increases, it becomes critical that operators provide modern technology in order to raise their current monthly revenue. The next major opportunity for vendors will be LTE, which we expect both etisalat and du to deploy within the next three years.
"The UAE's telecom market generated $6.1 billion in service revenue in 2009. Since the market has now caught up with those of the developed world in terms of service penetration, it can look forward to healthy but not dramatic growth between 2010 and 2015, during which we expect total revenue to increase at a compound annual growth rate (CAGR) of 2.5 per cent," the report says.
The fastest significant growth segments will be broadband internet and mobile data, although mobile voice will remain the single largest contributor to total revenue. A key change over the next five years is the switch from copper to fibre fixed line infrastructure that is currently under way and due to be completed by 2011. As well as providing a boost to broadband revenue, the change will enable significant growth in the Pay TV and fixed VoIP sectors for the first time.
The UAE has long been one of the world's leaders in mobile penetration, reaching 196 per cent by end of 2009. This high adoption is mainly due to the transient nature of the UAE's population — 80 per cent are expatriates on short-term contracts — and to its role as a regional business and recreational hub, which results in very large numbers of travellers.
"In 2010, voice revenue will remain the larger contributor to revenue, as we project its share of total fixed and mobile revenue to reach 72 per cent," it said.
The report projects mobile and fixed voice revenue to contract at a 2010 to 2015 CAGR of -4.4 per cent, to reach $3.7 billion in 2015.
Have you already received the upgrade to fibre-optics? How would you rate the experience? Would you pay more for quicker data transfer? Would you use the Voice over Internet Protocol (VoIP) services?
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