Telecom and IT Opportunities in Saudi Arabia

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Telecom and IT Opportunities in Saudi Arabia
Communications and Information Technology
Commission May 2005
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Table of Content

• Sector Reform
• Regulation Framework
• Communications and Information Technology
  Commission (CITC)
• Liberalization of The Saudi ICT Market
• ICT Market In Saudi Arabia
• National ICT plan
• ICT Business Opportunities
• Drivers for ICT Sector Investment in Saudi Arabia

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Saudi Arabia is highly urbanized with 86 of its
population living in urban areas
Currently approximately 25 of the population is
represented by expatriates
About 50 of the population is under 19 years of
age
The regions Of Riyadh And Makkah account for 48
of the countrys population and 56 of its
telephone lines
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Sector Reform

• Establishment of STC in 1998 and CITC in 2001.
• STC has developed the ICT infrastructure.
• The legal framework has been established.
• Private sector and foreign investment
  participation
• are both supported.

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Regulation Framework
Telecommunications Act Was Approved
Telecommunications Ordinance Was Approved
Telecommunications Bylaw Was Approved
The adoption of this legislation has opened the
telecommunications market for competition, and
has laid the legal framework for the
development of a competitive
telecommunications sector.
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Communications and Information Technology
Commission (CITC)
June 2001
Establishment of the Communications and
Information Technology Commission
An autonomous entity that enjoys financial and
administrative independence.
Responsibilities Include

• Creating a favorable environment for fair
  competition.
• Protecting public interest.
• Securing the right to access public network at
  affordable prices.
• Fulfilling its mission with transparency and
  fairness.
• Encouraging investment in information technology
  services .
• Developing a national information technology plan
  .
• Implementing both e-Government and e-Commerce
  initiatives and encouraging technology usage.

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Liberalization of The Saudi ICT Market

• CITC has opened the doors for increased business
  opportunities for local and foreign investment
  in
• Mobile services
• Fixed line services
• Data Services
• Internet services
• Other services and advanced technologies

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ICT Market In Saudi Arabia
Mobile market growth has been tremendous

• Sizeable and fast growing subscriber market
• Potential for high penetration levels
• Attractive demographics
• Stable macroeconomic environment

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ICT Market In Saudi Arabia(Continued)
Fixed line market growth is slowing down
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ICT Market In Saudi Arabia(Continued)

• Development of the data market has been slow.
• Huge pent up demand are still unmet by current
  infrastructure
• The number of leased lines is expected to further
  increase to 40,000, by 2006, at an annual growth
  rate of 18.3.
• Leased Lines tariff is not a major constraint on
  uptake

Monthly rental for a 64K AND 2MB leased line
US respectively
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ICT Market In Saudi Arabia(Continued)

• Internet services commenced in Saudi Arabia in
  1998.
• Today, the number of internet users exceeds 2.2
  million and the number of subscribers has reached
  almost 900,000, representing a penetration rate
  of about 10.
• The ISP market is fully competitive, 21 ISPs are
  currently operating kingdom-wide
• Further growth in penetration of internet
  services is expected due to several initiatives
  that are under way

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National ICT Plan

• 5 year short-term strategic projects
• 20 year long-term ICT vision
• Covers the kingdom
• Comprehensive
• Public-Private Partnership base projects
• Focused on key driving sectors of the economy
• Government supported

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ICT Business Opportunities

• Services
• Opportunities to participate with the licensed
  VSAT providers.
• Opportunities to participate in the mobile
  markets.
• Future fixed line and broadband expansion.
• Manufacturing
• Mobile and Fixed telephone sets as markets expand
• Cable and transmission facilities
• PC assembly
• R D

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ICT Business Opportunities (Continued)

• Value Added Services
• ICT applications for the Telecom sector
• Instrumentation and control systems in the Oil
  and Gas industry as well as in the water
  desalinization
• Network management
• Security
• Data warehousing
• Web Hosting
• Engineering services
• Consultancy Services

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Drivers for ICT Sector Investment in Saudi
Arabia

• Robust Economy
• Abundant natural resources
• Young population highly educated
• Competitive Advantage
• Underserved market
• Solid and well-defined regulatory environment
• A Favorable Financial and Tax Structure
• Low governmental fees
• No personal income tax
• Integration into the Global Market
• WTO accession expected in 2005
• Large number of successful foreign firms are
  already profitably engaged in Saudi Arabia

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American Companies involved in rapid expansion
and opportunities

• Microsoft Corporation
• Cisco Systems
• Lucent Technologies
• IBM
• Hewlett Packard
• Oracle
• Motorola
• And many others.

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Thank you

• Ayedh M. Al Qahtani
• aqahtani_at_citc.gov.sa
• Ghassan R. Khalifa
• gkhalifa_at_citc.gov.sa
• Web www.citc.gov.sa