Saudi Arabia Telecom Market Size (2024 - 2029)

The market size of the telecom sector in Saudi Arabia is expected to grow significantly, driven by factors such as a rising urban population, widespread use of cell phones, and advancements in technologies like 3G, 4G, and 5G services. The Internet of Things (IoT) is also anticipated to contribute to the sector's expansion. The country's investment in telecommunication and digital infrastructure, including initiatives to cover rural and remote areas using advanced satellite technologies, is also expected to boost the market. While the country's ambitious investments in 5G technology are beginning to show returns, the high internet penetration rate is also driving demand for telecom services. However, the decline in disposable incomes and the resulting shift in consumer behavior towards more cost-effective telecommunication packages may impact the average revenue per user (ARPU) for telecom operators, posing challenges for sustainable revenue growth and profitability in the market.

Market Size of Saudi Arabia Telecom Industry

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Saudi Arabia Telecom Market Summary
Study Period 2019 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 18.32 Billion
Market Size (2029) USD 22.22 Billion
CAGR (2024 - 2029) 3.92 %
Market Concentration Medium

Major Players

Saudi Arabia Telecom Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Saudi Arabia Telecom Market Analysis

The Saudi Arabia Telecom Market size is estimated at USD 18.32 billion in 2024, and is expected to reach USD 22.22 billion by 2029, growing at a CAGR of 3.92% during the forecast period (2024-2029).

  • The telecom sector in Saudi Arabia is anticipated to expand primarily due to the country's growing urban population and the widespread use of cell phones that enable 3G, 4G, and 5G services. According to the IMF, in 2023, Saudi Arabia's total population accounted for 32.82 million inhabitants, and it is anticipated to reach 36.24 million inhabitants in 2028. Further, the Internet of Things (IoT), which connects with wired and wireless internet, is predicted to be used more in the telecom industry, supporting the sector's expected growth during the forecast period.
  • Saudi Arabia continues to invest in its telecommunication and digital infrastructure, functioning toward attaining the Saudi Vision 2030 initiative. For instance, in January 2024, e& Group pledged to invest USD 6 billion over the next two years to advance technology and infrastructure and boost digital solutions. e &'s pledge is to deliver meaningful connectivity in several emerging markets, including Saudi Arabia. The investment aims to enhance network accessibility and affordability in developing economies by expanding network coverage, improving connectivity, and ensuring access to cheaper telecommunications services.
  • Further, Saudi Arabia's ambitious investments in 5G are beginning to pay off. CITC (Communications, Space and Technology Commission) expects 5G and Wi-Fi 6E to increase their contribution to the country's GDP from USD 4.7 billion recently to more than USD 18 billion by 2030. The Gulf region has been leading the way in adopting 5G technology worldwide. As of 2023, most countries in the region achieved nationwide 5G coverage. Additionally, the number of mobile users utilizing 5G services has dramatically increased since the beginning of 2023.
  • As per the Digital 2023 report by Dataportal, at the beginning of 2023, there were 36.31 million internet users in Saudi Arabia, with an internet penetration rate of 99%. Additionally, in January 2023, 29.10 million people in Saudi Arabia were social media users, which accounted for 79.3% of the total population. Furthermore, there were 42.50 million active cellular mobile connections in Saudi Arabia in early 2023, which was 115.9% of the total population. Therefore, the increase in internet penetration in the region is expected to raise the demand for telecom services in Saudi Arabia.
  • Furthermore, suppliers are upgrading their networks and investing in new technologies, expanding their market presence, and acquiring customers in the Saudi Arabia telecom market. In March 2024, Saudi Arabia telco Zain aimed to accelerate the deployment of 5G-Advanced (5G-A) services. The telco's 5G-A plans for 2027-2030 include the second phase of its 5G-A program, in which the country's main 18 cities will be covered with 5G-A technology.
  • The decrease in employment opportunities, particularly in industries heavily dependent on oil and related sectors, has resulted in a reduction in the country's stock and disposable incomes for a significant portion of the Saudi Arabian population. Consequently, many consumers have had to re-evaluate their spending priorities, which led to a decrease in overall spending on telecom services, such as mobile data plans, subscriptions, and value-added services. The drop in disposable incomes has also caused many consumers to opt for more basic and cost-effective telecommunication packages, shifting away from higher-value and premium service offerings. This shift in consumer behavior may impact the average revenue per user (ARPU) for telecom operators, making it challenging for them to maintain sustainable revenue growth and profitability in the market.
  • Increasing inflation can introduce challenges and uncertainties for the Saudi Arabian telecom market, influencing its operations, pricing, and investment decisions. It may lead to higher operating expenses for telecom providers, prompting them to raise service prices to maintain margins. This could potentially affect consumer affordability and demand. Inflationary pressures may influence investment decisions by telecom companies, impacting their plans for expanding infrastructure or launching new services.

Saudi Arabia Telecom Industry Segmentation

Telecommunication is an infrastructure that allows the transfer of all types of data, such as voice, text, audio, and video, across the world through a wired or wireless medium. The telecommunication sector is penetrating its services and coverage in remote areas and becoming vital to human lives. The telecom sector includes telephone, telecommunication, and internet service providers. The industry expanded in the past decades from telephonic voice calls to mobile data calls, internet calls, text, internet, and TV broadcasting services.

The Saudi Arabian telecom market is segmented into telecom services (voice services [wired and wireless], data and messaging services, and OTT and pay-TV services) and telecom connectivity (fixed network and mobile network). Further, factors affecting the market's evolution in the near future, such as drivers and constraints, have been covered in the study. The market sizes and predictions are provided in terms of value (USD) for all the above segments.

By Telecom Services
Voice Services
Wired
Wireless
By Data and Messaging Services
OTT and Pay-TV Services
By Telecom Connectivity
Fixed Network
Mobile Network

Saudi Arabia Telecom Market Size Summary

The Saudi Arabia Telecom Market is predicted to grow significantly in the coming years, driven by the increasing urban population and widespread use of cell phones that enable 3G, 4G, and 5G services. The Internet of Things (IoT), which connects with wired and wireless Internet, is also expected to play a crucial role in the telecom industry, supporting the sector's projected growth. Furthermore, Saudi Arabia's ambitious investments in 5G are beginning to yield results, with the Communications, Space and Technology Commission (CST) expecting 5G and Wi-Fi 6E to significantly increase their contribution to the country's GDP. The increasing internet penetration in the region is also expected to drive the demand for telecom services. The telecom market in Saudi Arabia is characterized by data and messaging services holding a significant market share, driven by the adoption of 5G services and fiber-based fixed Internet connection. Telecom providers are forming partnerships, getting licensing agreements, expanding fiber and copper-based network infrastructure, and deploying 5G services in the country to support the increasing demand for data and messaging services. The mobile network segment in the Saudi Arabia telecom market is also expected to witness significant growth, driven by the increasing smartphone penetration, IoT devices proliferation, and growing demand among industries owing to enhanced digitization. The market is serviced by major mobile network operators (MNOs) like Saudi Telecom Company (STC), Mobily, and Zain KSA, who have invested in upgrading LTE infrastructure and developing 5G services nationwide.

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Saudi Arabia Telecom Market Size - Table of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Market Overview

    2. 1.2 Emergence of IoT And M2M Services in Saudi Arabia

    3. 1.3 Impact of Recent Geopolitical Developments on Saudi Arabia

    4. 1.4 PESTEL Analysis - Telecom Sector in Saudi Arabia

  2. 2. MARKET SEGMENTATION

    1. 2.1 Overall Telecom Revenue (Market Estimates, Forecasts, Trends and Other Market Dynamics)

    2. 2.2 By Telecom Services

      1. 2.2.1 Voice Services

        1. 2.2.1.1 Wired

        2. 2.2.1.2 Wireless

      2. 2.2.2 By Data and Messaging Services

      3. 2.2.3 OTT and Pay-TV Services

    3. 2.3 By Telecom Connectivity

      1. 2.3.1 Fixed Network

      2. 2.3.2 Mobile Network

Saudi Arabia Telecom Market Size FAQs

The Saudi Arabia Telecom Market size is expected to reach USD 18.32 billion in 2024 and grow at a CAGR of 3.92% to reach USD 22.22 billion by 2029.

In 2024, the Saudi Arabia Telecom Market size is expected to reach USD 18.32 billion.

Saudi Arabia Telecom Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)