United Arab Emirates Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

United Arab Emirates Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The United Arab Emirates telecom market is expected to register a CAGR of 3.15% during the forecast period. The increasing penetration of 5G and the advent of 6G are expected to drive the market's growth. For instance, the median download speed on 5G networks is among the fastest in the world, and the fixed broadband speed is among the highest. This is the outcome of recent expenditures in infrastructure that prioritized fiber over updated copper networks and 5G.

• Extending the reach of social media, growing the usage of smart devices, localizing data, rising usage of mobile, fixed, and broadband services, and the country's journey toward digital transformation are expected to drive the growth of the market studied throughout the forecast period.
• The growing deployment of 5G, along with a high rate of device turnover and customer desire for speed, indicates that ARPU will keep rising. Launching new products, particularly in collaboration with international businesses, may stimulate growth and innovation. Thereby driving the growth of the UAE telecom market.
• With the expansion of end-user industrial uses and markets such as IoT, cloud, data centers, and 5G, the UAE telecom sector is increasing. Furthermore, as a result of industrial development, such as video on demand, the country is experiencing a surge in internet usage (VOD). Many firms are launching various internet plans to meet the increased demand for internet services and capture a major market share.
• United Arab Emirates (UAE) citizens' access to the internet is still severely constrained. Online censorship is widespread, and the online media landscape is uniform. Furthermore, the United Arab Emirates was ranked 209th out of 220 countries for broadband affordability in the UK telecom company Cable's 2022 annual assessment. According to the report, the average monthly cost of internet access in the country is USD 156.66, which is more than double the regional average of USD 60.61. Many popular VoIP services are not available over mobile connections. Etisalat and du are the only firms authorized to provide charged VoIP services, but WhatsApp, Skype, and other free or low-cost OTT voice-call services are only available over fixed-line or Wi-Fi networks. These factors are expected to hinder the market's growth.
• Even though the COVID-19 crisis caused challenges for telecom service providers, it also offered new opportunities in fields such as healthcare, education, and others. The ongoing adaptation or changes in the communication behaviors of consumers are predicted to influence the future dynamics of the UAE telecom industry. Customers choosing digital services such as online ordering, mobile payments, strong collaboration tools, and so on will be the new standard for telecom service providers post-crisis. Telcos should continue to invest in their network infrastructure in order to meet these future needs.

• With the deployment of 5G, plans to launch 6G, and the release of new technologies, the UAE telecom sector is at an advanced level. The sectoral regulator, the Telecommunications and Digital Government Regulatory Authority (TDRA), is in charge of developing regulations and administering infrastructure.
• The country has some of the fastest 5G and fixed broadband data speeds worldwide. The country's 5G penetration is rising. Furthermore, the fast speed is due to increased investment in fiber networks rather than legacy copper networks. The growing number of individuals working from home, as well as more time spent on the internet for entertainment and other uses, raised the need for faster internet connections, which in turn is driving the telecom industry in UAE.
• When it comes to 5G deployment, the Middle East is beating established Western economies, which are being held back by the need to update aging infrastructure. According to an Ericsson Mobility 2020 estimate, there will be 80 million customers to the 5G initiative in MENA by 2025. This widespread use benefits companies and other technological advancements in the region and lays the groundwork for smart cities and worldwide communication. Furthermore, the United Arab Emirates telecoms authority set an ambitious objective of 100% 5G penetration in the country by 2025 in order to become the Middle East's technical leader in the networking system.
• In terms of 5G connection speed, the UAE offers users experiencing data rates of 316.8 Mbps, above that of Qatar and Kuwait. The three nations also dominate the area in 5G peak download speed, with 743 Mbps in the UAE, 713.4 Mbps in Qatar, and 663.7 Mbps in Kuwait. Furthermore, the country's rising smartphone user base is also projected to boost 5G network expansion.
• Internet and mobile-based subscriptions account for a growing share of UAE telecom operators' revenues. Demand for cell phones and television services increased as more individuals stayed at home during the lockdowns. Consumers are switching from conventional phones to smartphones with 5G capabilities, which is expected to increase 5G penetration and increase average revenue per user (ARPU).

• The increasing initiatives taken by the UAE government and regional vendors for the faster deployment of 5G services and the implementation of smart home solutions and connected devices are creating a demand for broadband services in the country. For instance, in April 2021, Etisalat partnered with Nokia for the deployment of ultra-fast 5G broadband services in the country.
• Moreover, according to the Cisco Broadband Index 2022, almost 75% of respondents in the United Arab Emirates state the reliability and quality of their broadband connection are important to them. The survey revealed that remote and hybrid working is more prevalent than ever, with 52% of the UAE workforce now relying on their domestic Internet service to either work from home or run their own business. As per the survey, around 66% of people actively use their home broadband for seven hours or more each day. Such trends are increasing the country's demand for broadband.
• Additionally, the increasing usage of 5G smartphones is creating a positive impact on broadband services. As per Cisco, the United Arab Emirates was the first country in the region and the fourth globally to launch 5G, and by the end of 2023, an estimated 16 million 5G-enabled smartphones would be operational in the region. Also, the major service providers are preparing pilots of 6G, which is expected to be 100 times faster than 5G.
• Moreover, as per the Telecommunication and Digital Government Regulatory Authority (TDRA), the United Arab Emirates ranks first in time spent on social media and mobile internet speed. The high ranking was due to the significant advancement of its information and communication technology sector. The report stated that the country ranks first in the use of social media based on the average time spent on social media per capita at 106%, compared to the global average of 58.4%.
• As per TDRA (UAE), there were around 3.67 million broadband internet subscriptions in the country as of March 2022, which were around 3.26 million in March 2021. Such a significant increase in the deployment of internet broadband, along with the government's initiatives for faster internet speed, is creating a positive outlook for the growth of broadband services in the country.
• The continuous development of fiber connectivity and network infrastructure, the partnerships between market vendors, increasing data consumption from individuals as well as business organizations, and the integration of advanced technology in broadband services are expected to drive the demand for the broadband segment during the forecast period.

The UAE telecom market is consolidated, with key players, such as Etisalat (Emirates Telecommunication Group Company PJSC), Emirates Integrated Telecommunications Company (du), and Al Yah Satellite Communications (Yahsat), occupying most of the market share. Also, individual players are deploying the 5G network by partnering with various 5G infrastructure providers globally.

In December 2022, Etisalat announced its collaboration with Huawei to complete the trial of 1.2 Tbps/channel in the United Arab Emirates. This achievement is a major industry milestone in driving down the cost per bit of telecommunications networks. The trial showcased the ability of fiber networks to reach the overall capacity of single fiber transmission up to 96 Tbps.

Furthermore, in September 2022, Etisalat announced the launch of internet services called ‘Digital Internet’ and ‘Digital Premium Internet’ aimed to address the dynamic requirements of the business community by offering upgraded and dedicated internet connectivity over a reliable and secure network through a digital platform.

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