Giving an extra push to Qatar’s ongoing economic diversification programme, the country’s telecommunication sector has contributed 1.7 percent to Qatar’s GDP in 2016, up from 1.3 percent in 2014.
An assessment conducted by Communications Regulatory Authority (CRA) shows the telecommunications market saw investments of around QR1.25bn (12 percent of service providers’ annual revenues) towards development of infrastructure and services, and in preparation for future technologies, during the year 2016.
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 QR10bn), a sign that the mobile telecommunication market in Qatar have 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 EBITDA margins. Telecom giant Ooredoo’s EBITDA margin increased in 2016 from 47 percent to 49 percent while Vodafone’s increased from 25 percent to 31.
The service providers are also diversifying their revenue streams into associated activities, such as handset and equipment sale, data centre 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.
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, said Mohammed Ali Al Mannai, President of CRA.
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 ARPU (‘average revenue per user’) 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% of the subscriptions.
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.