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

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 Market Trends

Data and Messaging Services to Hold Significant Market Share

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.