Qatar’s telecomms market is characterised by a mature mobile sector, with penetration above 100%, wide uptake of mobile data services and high revenues per user. The country is ahead of the global curve in deployment of 4G networks and the two operators have already begun deploying 4G+ technology in their networks.
“We have achieved 4G+ 3-Carrier Aggregation, delivering top speed of 375 Mbps,” Mohammed Al Sadah, chief operating officer, Vodafone, tells CommsMEA. “We provide 4G+ not only in the cities of Qatar, but also in the desert. As internet usage increases due to data hungry apps, VOIP etc, there will be more demand for capacity, hence even higher speeds.”
Ooredoo is also trying to push the envelope in mobile services. In December, it reported that it had deployed 4G+ technology, with potential data speeds of up to 375 Mbps, at sites around Qatar. Waleed Al Sayed, CEO of Ooredoo Qatar, said: “We’re aiming to further improve the broadband experience for our customers with faster data speeds and an excellent network performance. Nokia Networks is helping us to meet these goals and we look forward to deploying the latest technical achievements as we continue to enhance our world-class network.”
Both operators have indicated that they intend to continue evolving their mobile networks. In November last year, Vodafone Qatar said it had spent QR650 million on its network over the previous year and will spend more. More than 200 new outdoor and indoor sites have been installed and data capacity has been boosted by 300%, according to the operator.
The operator has even offered all port-in customers and new postpaid customers their money back if they’re not completely satisfied in their first 30 days of using the network.
Ooredoo has also been talking about its plans to test 5G technology. Last November, it unveiled an agreement with Ericsson to, ‘develop use cases, requirements and deployment scenarios for 5G’.
BMI Research has recently revised upwards its forecast for the Qatari mobile market. Continued investment in infrastructure projects means that the market still has room for growth, according to the company.
‘The growth has been propelled by infrastructure and economic development projects, the upcoming 2022 FIFA World Cup and the arrival of migrant families,’ the analyst house writes in the introduction to its ‘Qatar Telecommunications Report’.
‘Qatar benefits from a wealthy population which drives the demand for advanced data services, and a large migrant community which is a factor for growth. Operators have to cater to both segments, with the profitability coming from the former.’
The mobile market added 564,000 new subscribers in the first nine months of 2015, according to BMI. The market is characterised by a high level of SIM ownership, with a high level of revenue per user and widespread use of mobile data services.
Like any mature mobile services market, the challenge for Qatar’s two operators is to find continued growth and maintain the amount of revenue spent by each user.
Vodafone Qatar’s report for the nine months to December 31, 2015 shows its base to be 1,501,000 mobile customers. Although this is an increase of 6% year on year, total revenue for the period of QR 1,603 million represents an 8% decline over the same period the year before.
Significantly, mobile average revenue per user (ARPU) was QR 110, a 12% year-on year reduction. The drop in ARPU was attributed to a cut in mobile termination rates, although a levelling in RPU is often a sign of a mature market.
The slowdown in Vodafone Qatar’s revenue growth in 2015-16 contrasts with its solid growth in previous financial years. Vodafone Qatar’s overall revenue almost doubled over the four years between FY 2011-12 and 2014-15.
In financial year 2011-12, revenue was QR 1.2 billion. That grew to QR 2.3 billion in 2014-15. Revenue for FY 2015-16, which ends in March, looks like it will be in line with or slightly down on the prior year.
Despite the slowdown in its business this year, Vodafone remains optimistic about the prospects for the mobile market. “There is potential for traditional service growth as more customers adopt smartphones and data,” says Al Sadah.
“Beyond that, the new smartphone ecosystem customers are creating presents new partnership opportunities with other consumer services providers to enhance new aspects of the customer experience.”
Ooredoo’s mobile revenue has grown solidly, albeit from a larger base than its competitor. Mobile revenue was QR 3.7 billion in financial year 2011 (Jan-Dec), a number that grew to QR 4.5 billion in 2014. For the first nine months of 2015 (Jan-Sept), Ooredoo’s mobile revenue stood at QR 3.77 billion, putting it on track to reach around QR 5 billion in 2015.
With the mobile market having reached a mature stage, attention is very much on the country’s fixed market. Comments from the Communications and Regulatory Authority suggest that the regulator sees scope for growth and innovation in fixed services (see interview with CRA president Mohammed Al-Mannai on page 32).
In a surprise move, responsibility for the deployment of fibre across the country was handed several years ago to a state body called Qatar National Broadband Network (Qnbn). The organisation was established with the following goals: for every consumer to have a choice of two broadband providers by 2016; for 95% of homes to have access to 100 Mbps download and 50 Mbps upload speeds by 2016; and for all business and government bodies to have access to at least 1 Gbps effective symmetrical speeds by 2016.
Qnbn would be the owner of the broadband network and the service providers, including Ooredoo and Vodafone, would pay to use the network. In 2014, it was announced that Vodafone Qatar would acquire Qnbn, although the sale never went through and would have been at odds with Qnbn’s original status as an operator-independent infrastructure provider. It is currently unclear how far Qnbn has progressed in achieving its founding goals.
Alongside Qnbn, Ooredoo has also been working on its own fibre deployments. According to the CRA, the operator’s network will, ‘cover Qatar by the end of 2016’. While it’s unclear if 100 Mbps is universally available, 10 Mbps download speeds for those connected to fibre are now a minimum.
With Qnbn and Ooredoo both having undertaken work on fibre deployments, the CRA has acted to ensure that there is open and equal access to the networks for all operators. The Civil Passive Infrastructure Access Regulation, which became law on November 29, 2015, has established a set of guidelines governing operator access to passive civil infrastructure.
Vodafone Qatar has welcomed the regulations and the CRA’s intention to regulate infrastructure access. “[The year] 2014 marked a shift in focus by the CRA away from purely retail level regulation to infrastructure access regulation. There, the CRA continues to have a critical role in further building out and enforcing the wholesale regulatory framework, specifically, to deliver effective access regulation,” says Vodafone’s Mohammed Al Sadah.
“This is essential to support genuine and sustainable competition in the fixed line market and realise the full benefits of this for consumers and businesses alike and to deliver the broader economic and policy objectives of the Ministry. Vodafone Qatar looks forward to supporting the CRA in this objective.”
Ooredoo has taken advantage of the country’s expanding fibre network to update its IPTV service. Ooredoo tv, launched last month, replaces Mozaic TV and combines apps, on-demand content and linear channels in one box.
Waleed Al Sayed, chief executive officer, Ooredoo Qatar, says: “Ooredoo tv will deliver more power, more choice and a smoother experience for customers and deploy the full strength of the Ooredoo Supernet. Our Mozaic TV customers will be amazed at how easy it is to upgrade to Ooredoo tv, and will be delighted by the quality of service when they do.”
The service is segmented into four packages and all bundles will come with a minimum 10 Mbps broadband connection and access to a landline with free local calls. Ooredoo says that the new service also supports 4K, although it did not elaborate on when 4K content would be made available.
It remains to be seen how regulation of the fixed market will play out and how much Vodafone Qatar will benefit. In the meantime, both operators will seek to add more mobile customers and maintain, or even increase, average revenue per user.