Networks Primed For Hajj Operations

Saudi Arabian mobile operators have prepared their networks for the 2013 Hajj in mid-October . T he annual Muslim pilgrimage, which draws millions of visitors from around the world, provides a seasonal boost to the Saudi telecoms market, with operators recording significant subscriptions and revenue growth during the event. It is therefore not surprising that operators are keen to improve key operational and financial indicators , albeit it temporarily, by ensuring that their networks are able to cope with the surge in subscriptions and usage.

Hajj Offers Growth Amid Saturation
2010 - 2017

Mobile market leader and incumbent operator STC disclosed that it has expanded its network capacity by 30% to accommodate the voice and data needs of 31mn users. The operator also expanded its Wi-Fi network to more than 400 locations covering key areas in holy places. Zain and Mobily have taken similar steps. In September, Mobily awarded a contract to Ericsson to expand and enhance it network capacity to enable it cope with additional traffic during the Hajj. In addition to improving its network, Zain launched new service packages specifically for pilgrims participating in this year's Hajj.

BMI believes the experiences of previous pilgrimages, especially with the increasing use of data-centric services and applications in the last few years, is driving operators' strategies aimed at taking advantage of the opportunities presented by the annual event. Mobily reported data traffic growth of 502% in some locations during the 2012 while STC processed over 2,750TB of internet traffic, 100% more than the previous year, and 40% increase in voice traffic compared to the previous year.

While we expect voice and traffic to rise in 2013 compared to the previous year, it is hard to predict the rate of increase in view of some recent developments that pose downside risks to growth. Firstly, we expect the new SIM ownership rules to discourage some visitors from acquiring local SIMs for the period of their stay. Secondly, the Saudi authorities have imposed a 50% reduction in the Hajj 2013 quota on local applicants and 30% on all foreign Hajj pilgrims owing to the construction work beings done around the Haram Sharif. This could mean as much as 800,000 - 1mn fewer pilgrims compared to 2012. We expect these factors to reduce the number of new subscriptions. However, this would be counterbalanced growth in data traffic owing to a higher smartphone penetration and a wider choice of file-sharing services, apps and other data-centric services.

This article is tagged to:
Sector: Telecommunications
Geography: Saudi Arabia

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