UAE mobile subscriptions set to hit 14 million this year [Gulf News (United Arab Emirates)]

(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) Dubai: If you think 159 per cent penetration rate in mobile subscribers was high enough, think again! The number of mobile subscriptions in the UAE is set to increase by 5.78 per cent to 14.07 million this year compared to 13.3 million last year, fuelled by an increase in mobile data usage. A whole new profile of customers are joining the mobile information revolution, helped by easy-to-use and intuitive apps.

Demand for higher bandwidth applications has also been fuelling growth. Uptake rate for 4G or LTE (Long Term Evolution) is 133 per cent this year, with 54,000 in new LTE subscribers this year projected. Last year, the number of 4G LTE subscribers was 23,200, according to Informa Telecoms and Media, who have shared the data exclusively with the Gulf News.

The actual end of 2012 figures (as reported by the operators) isn't out yet and are due to be reported next week, when etisalat and du are expected to report their fourth-quarter results.

"The above numbers also include the SIM re-registration programme which is underway. The SIM card re-registration is done in phases and will take more than a year to complete," Matthew Reed, Principal Analyst at Informa Telecoms & Media, told Gulf News.

Mobile data will be the fastest-growing revenue segment in the market.

"We believe that the number of LTE subscriptions in the UAE is still fairly small, but that is the case for LTE generally [that is, in most other markets around the world] because it is still fairly early days for LTE; there are still relatively few LTE-ready devices available; and because operators have tended to price LTE as a premium service.," Reed said.

Robust increase Subscribers using 3G services are going to see a robust increase while demand for 2G services is going to fall by more than 48 per cent this year.

"Broadband penetration in UAE trails well behind mobile services, which represent a growth area for operators. To this end, both du and etisalat have been focusing on offering high speed mobile broadband through investments in LTE network roll-out and by offering attractive handset bundles to entice customers," Bhanu Chaddha, senior research analyst (telecommunications) at IDC, told Gulf News.

IDC believes that launch of LTE-enabled handsets such as Samsung Galaxy S3 and iPhone 5 would accelerate adoption of LTE services this year. However, LTE services are "being positioned as premium offering and hence are priced accordingly, which could limit the adoption of these services to upper-stratum of the market," he said.

"The propensity of young Emiratis to use mobile data services will help drive growth in this sector, and an estimated $1.1 billion [Dh4 billion] is expected to be created in this segment in 2012," Kerem Arsal, senior analyst at Pyramid Research, said in its latest report.

He said that du is expected to catch up with etisalat in the mobile business by 2017, eventually splitting the market perfectly at 50 per cent Du had a market share of 47.2 per cent of the UAE's mobile subscribers in the third quarter.

"We also saw early signs of shift in the market power, when etisalat launched its per-second billing plans a proposition which has worked well for du to attract bottom of the pyramid customers. Going forward, it could remain difficult for du to expand its mobile market share as etisalat is expected to be more proactive in safeguarding its revenue base which as per IDC's estimates accounted for nearly 70 per cent of telecoms spending in 2012," Chaddha said.

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