Increasing Broadband Internet Penetration
In the OIC Member Countries
129
Etihad Atheeb Telecom Company (also called GO Telecom) is a fixed wireless service provider
relying on WiMAX technology. The company is a joint venture of Batelco of Bahrain and the
Saudi Arabia-based Atheeb Trading Company. The remaining player is the Integrated Telcom
Co (ITC) targeting primarily the business and wholesale markets through WiMAX technology
and fiber infrastructure and offering dedicated data communications services. ITC joined
forces with Bayanat al Oula to be part of the Saudi National Fibre Network. Most fixed
broadband competition has been centered so far around FTTH, WiMAX and fixed TD-LTE
technology given that no local loops have been so far unbundled.
The only mobile broadband pure play, Zain Saudi Arabia backed by Kuwait’s Zain Group, has
been focusing on a mobile broadband strategy, emphasizing a technology strategy around LTE-
A, offering service with maximum download speed of 187.5 Mbps78.
The Saudi broadband industry is facing two key challenges. In the first place, operators are
facing increasing pressure on revenues derived from traditional services. Core revenues and
margins are declining as result of cannibalization of long distance service by VoIP operators,
such as Skype. While fixed and mobile broadband is still growing in most markets segments
(consumer, enterprise, and government), it does so at a disproportionately lower rate than the
surge in data traffic. This puts additional pressure on capital spending. In this context, only the
operators that are monetizing their broadband offerings are capturing the growth opportunity.
On the other hand, all mobile broadband players are considering the spin-offs of their tower
assets into a separate joint venture in order to save on infrastructure costs79.
As an additional risk, the increased adoption of Internet and smart devices is shifting market
power to Over The Top app providers who capture the relationship with customers and
appropriate a large share of revenue growth.
Technologies and trends in the broadband market
The technological infrastructure utilized for delivering broadband services has to date
consisted of a mix of ADSL, WiMAX and FTTH for fixed networks, as well as 3G and 4G for
mobile broadband (see table 66).
Table 66: Saudi Arabia: Current broadband technologies utilized
Company ADSL WiMAX FTTH 3G LTE
STC • Yes • Yes • FTTH network reaching
most urban centers • Over 2100
MHz band
• 98% coverage
• HSPA+
• TD-LTE over 2300
MHz
• FD-LTE over 1800
MHz
• 90% coverage
Mobily /
Bayanat al • Yes • FTTH in Dammam, Jeddah,
Khoubar and Ryadh • Over 2100
MHz band • TD-LTE over 2600
MHz
78 “Zain Saudi launches tri-band LTE-A in Jeddah”. Telegeography, May 12, 2016.
79 “Saudi cellcos in discussion to create JV tower business”. Telegeography. February 11, 2016