Middle East and Africa Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Middle East and Africa Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Middle East and Africa telecom market is anticipated to expand at a CAGR of 5.28% during the forecast period. The use of telecom services like Saudi Telecom Company, Etisalat Group, Ooredoo Group, Zain Group, Oman Telecommunications Company, etc., by businesses and services nationwide is progressing quickly.

Key Highlights

• The previous 25 years have seen a revolution in telecommunications, from the Middle East has benefitted from active participation. With the exception of Lebanon, Syria, and a few other nations whose reforms were only cosmetic, the majority of the countries in the region have liberalized their telecom businesses since 2000 and put them on a path of steady, dynamic growth. Even though some states hold substantial telecom shares, they have increased competition, set up efficient regulatory bodies, and moved investment to the private sector.
• The Middle East is not an exception to the fact that mobile communications are the technology that has spread the quickest in historical records. According to GSMA reports, It has 400 million unique mobile users after 25 years, of whom 280 million started using mobile internet. The mobile ecosystem generated almost 640,000 indirect employment within the same period and 360,000 direct ones in the area.
• The main factors driving market growth in the region are the establishment of Mobile Virtual Network Operators (MVNO), the expansion of fiber-based networks and fixed broadband services, and the achievement of telecom sector liberalization.
• The market challenges are expected to have an impact on telecom service expenditure due to widespread job losses and the resulting reduction in disposable incomes. For instance, on May 2022, as per World Bank Report, the average rate of employment growth in the private sector in MENA nations was one percent per year, which is much less than the five percent average among middle-income peers. In addition to the high young unemployment rate, which is projected to be 26 percent, female labor force participation, at 20 percent, is the lowest in the world.
• The Middle East's telecom sector has changed significantly over the past few years due to several phenomena. One of them is COVID epidemic of the past two years did not considerably affect telecom revenues (a decrease of less than 1 percent). Still, it highlighted the telecom networks' robustness and adaptability as they managed to withstand the unexpected spike in usage.

Key Market Trends5G technology is Expected to have Significant Share

• Governments and authorities in GCC nations, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, have granted spectrum, and mobile carriers have deployed some of the first 5G networks in the world, making them 5G pioneers in the MENA area.
• However, a significant number of nations (Algeria, Egypt, Jordan, Lebanon, Morocco, Tunisia, and Turkey) have begun to identify the appropriate 5G spectrum and the best strategies for clearing the spectrum, which will feed into any technical limits and related technical license requirements. It is projected that 5G networks and services will be accessible in these nations starting in 2023.
• It is reported that operators have been testing and evaluating 5G in Algeria, Egypt, Morocco, and Turkey, and at least one operator has been developing a 5G network in Lebanon. In November 2021, Total Telecom reported that using Fixed Wireless Access (FWA), the Middle East region has taken the lead in bringing high-speed 5G connection to more people. There are over a million 5G FWA customers in the Middle East and Africa (MEA) area.
• The COVID-19 outbreak has delayed some of these countries' plans to roll out 5G. According to the GSMA's most recent projections, these nations should deploy commercial 5G services (BWA and mobile) between 2022 and 2024.
• According to GSMA Mobile Economy 2022 report, 5G technology is estimated to account for 17% of the total technology mix by 2025 in the Middle East and North Africa (MENA) region. In Sub-Saharan Africa, 5G to reach 4% by 2025.

Challenges in the Region Restrain the growth

• Data privacy and cybersecurity are two new regulatory problems that have emerged. These challenges have become serious as more and more users' private data is made available to telecom providers, social media platforms, and many other organizations. The region's nations were inspired to recognize the value of data protection by implementing the EU's General Data Protection Regulation (GDPR).
• Legislation has been proposed in an effort to advance data privacy while supporting the expansion of the digital economy. Others have dealt with it using a top-down strategy primarily concerned with strengthening state control, which might dash the nation's hopes for a quick digital transformation of its government and industry institutions.
• However, the Levant, North Africa, and Iran are subject to a sizable population of disconnected individuals, with 140 million not using mobile services and 350 million not using mobile internet. To close this gap, tens of millions of people will have to overcome the cost barrier or fight illiteracy.
• The direction of regional telecommunications trends is correct. However, not enough is being done to make mobile broadband and services available to more people. Most nations' universal service funds have been generating wealth from operators that might have been used to expand coverage in places where it is not economically feasible.
• Most governments have not provided adequate funding for digital government services or have not coordinated their policy in this regard. The majority of other countries haven't done much on this front. Still, the UAE and Saudi Arabia have prioritized having an environment that draws digital enterprises and allows them to develop quickly.

Competitive Landscape

The Middle East and Africa telecom market is moderately consolidated and consists of several major players. The major players with a prominent share in the market, such as Saudi Telecom Company, Etisalat Group, Ooredoo Group, Zain Group, Oman Telecommunications Company, etc., are focusing on expanding their customer base across foreign countries through the adoption of various technologies.

• November 2021 - According to a company official, Saudi Telecom Co., the prominent telecoms firm in the Middle East, would invest SAR1.5 billion (USD 400 million) to establish the largest cloud-enabled data center in the area as the oil-rich nation strives to become a hub for digitalization.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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