The United Arab Emirates (UAE) is predicted to see its telecommunications market growing at a CAGR of 3.7% during the period 2016-2021. The major reason for this growth is: expansion of fixed and mobile data segments. According to the latest report on UAE’s telecommunications market, the fixed VoIP segment will grow at the fastest pace. The market will be dominated by operators Etisalat and Du, with both occupying a total of 97.5% of UAE’s telecommunications market. The market is likely to witness more tough competition with players implementing fixed network-sharing agreements. Presently, 3G is more popular in the UAE. However, by 2019, 3G will be replaced by 4G networks.
Below listed are some of the key factors responsible for the growth of telecommunications market in the UAE:
1. Rising demand for 4G networks
The demand for high-speed internet is highly responsible for the growth of telecommunications market in the UAE. Popularity of 4G is increasing in the country since its ability to offer high speed internet, internet calls, video chats, etc has been recognised by the young population of the country.
2. Adoption of fiber-optic technology
Many players in the UAE market have adopted the fibre-optic technology for offering smooth telecommunication services. When compared to copper wire, optical fibers have many advantages such as- interference and attenuation in fiber optics is relatively low. Since it provides better service for high-demand applications and long distnace coverage, it is being adopted by many operators to transmit cable television signals, telephone signals and internet communications.
“Adoption and expansion of new communication technologies like 4G, 5G, & triple-play will expand UAE’s telecom market.”
3. Adoption of triple-play services
Triple-play service refers to a network that provides voice, data and video together via a single access subscription using copper cables, fiber optics or satellite. Growing adoption of this system will further bolster the telecommunicatons market.
4. Expansion of fixed VoIP and fixed broadband segments
The UAE is expected to see continued growth of fixed VoIP and fixed broadboand segments over the forecast period. As a result, the overall telecommunications market will see a hike in its growth rate.
5. Other socio-economic factors
Other factors responsible for the growth of UAE’s telecommunications market are: rising number of expatriats, booming toursim sector, rapid urbanisation, rising number of commercial hubs and offices, and increase in number of smartphone users and decrease in its rates.
Industry experts suggest that operators in the UAE’s telecommunications market should diveyrsify their service portfolios. Telcom companies should consider providing multiplay services to the residential segment. They should also try to offer advanced machine-to-machine (M-2-M) and/or Internet-of-Things (IoT) to businessmen/corporate customers.