Kuwait Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Kuwait telecom market is expected to grow at a CAGR of 6.5% over the next five years. The telecom industry in Kuwait has expanded to a significant level, with a particular emphasis on mobile infrastructure and services. The importance of the telecommunications industry to the nation's economy is expected to increase in the next few years.

Key Highlights

• The Kuwait Vision 2035 program seeks to diversify the economy of the nation. This will continue to open new investment opportunities for telecoms and ICT providers. Telecom companies Would have the chance to provide premium 5G services due to the renovation and extension of the 5G network. Ooredoo/Fastelco customers would have more opportunities to enjoy stable, high-speed connections due to the telecom provider's efforts to extend its fiber optic network to untapped regions of the nation.
• Although the country is moving towards the phase of digital transformation, this could be a bit challenging owing to the need for a specialized skilled workforce. However, the companies are actively addressing the gap through measures to match contemporary education with the market's demands, better technology access, and initiatives to reskill the present workforce.
• Telecom users are evolving quickly, and the amount of 5G traffic has also been steadily growing. The operator has been witnessing a positive increase in revenue and profit. Of late, the 5G networks have received the MNOs' investment attention attributing to revenue growth in recent quarters. According to a report released by Opensignal, Kuwait stands second among the Gulf Cooperation Council (GCC) nations regarding the availability of the 5G telecommunications network, with a rate of 33.6%.
• As a result of the government's National Development Plan - Kuwait Vision 2035 program, which intends to promote advancements and investments in fixed broadband connection, the population's penetration of fixed broadband is expected to rise in the future years. Substantial increases in FTTH/B and set wireless subscribers would also raise the country's fixed broadband penetration rate. The primary source of the rise in fixed voice is VoIP services offered by telecoms through fixed broadband networks. For the forecast period, both phone and broadband lines would rise. This uptick is attributable to the nation's expanded fiber network.
• Compared to most Middle Eastern nations, Kuwait has made significant progress toward integrating telecom into a society based on the facts that are currently available. The country's high mobile phone connections (1.6 to 1.8 phones per person on average), comprehensive 5G mobile coverage, and practically universal rates of internet access (99%) and social media activity (99%) are a few of its standout characteristics. According to the Kepios report, in Kuwait, 4.31 million people used the internet in January this year, depicting that 99.0% of people had access to the internet. Kuwait had a 54 thousand (+1.3%) growth in internet users year over year.
• The COVID-19 problem has significantly impacted several businesses in the nation, although the Kuwaiti telecom industry remained mainly unaffected or even expanding the internet. The crisis has dramatically accelerated Kuwait's economy's digital transition. Due to an increase in data traffic, telecom providers' operations have grown. The e-payment sector, like teleconferencing and e-health, has seen a significant uptick in activity since the outbreak, escalating the demand for smartphones and digital services across the country. Furthermore, the Kuwaiti government tried to manage this exceptional circumstance and steer the nation's economic recovery, prioritizing involvement with and growing the private sector, much like other nations.

Kuwait Telecom Market Trends

Moving Towards New Digital Kuwait

• Kuwait may have been more slowly adjusting to the non-oil economy than nations like the UAE and KSA, but it has undoubtedly begun its journey in that direction. The Kuwaiti government revealed the Vision 2035 and National Development Plan for Kuwait, dubbed 'New Kuwait,' in January 2017. The telecom operators across the country are in an advantageous position as there is excellent potential for them to obtain the first-mover advantage to introduce more innovative products and services to the market.
• With digital transformation serving as a central tenet of Kuwait Vision 2035, the nation is concentrating on implementing innovative and digital technologies to innovate its services, propel the economy, and enhance the quality of life while boosting the operational effectiveness and performance of important sectors. This objective has spurred huge investments in Kuwait's telecommunications sector.
• Kuwait has a high rate of mobile adoption, and as fibers are not widely available, cellular devices are mainly used for broadband. This increases the likelihood that 5G would play a key role in supplying the connection to support national-scale digital transformation by businesses as part of Kuwait's ambitious Vision 2035 socioeconomic agenda, often known as 'New Kuwait.' The nation is second among the Gulf Cooperation Council (GCC) countries in terms of the availability of the 5G telecommunications network, with a rate of 33.6%, and was among the early adopters of the 5G network.
• The internet has changed the telecom industry in several ways, including the commoditization of connectivity, increased competition for operators from international providers of digital content and services (also known as 'over-the-top' players), and a switch from onsite to cloud-based subscription models for software delivery. The need for intelligent, dependable, and secure technology services is increasing across all industries, providing firms with opportunities for expansion and diversification. Also, the implementation of IoT in the telecom industry and solutions based on artificial intelligence are anticipated to obfuscate the boundaries between the digital and physical worlds.
• Enterprise demand for digital solutions has increased due to digital transformation, a trend that telecom operators are already leveraging. Demand for cloud, IoT, video, and business communications technologies will surge, fuelling the expansion. Kuwaiti telecommunications now provide various technological solutions in fintech, health tech, and drone technology. Over the next year, it intends to grow into insurtech, connected automobiles, education, gaming, security and surveillance, and oil & gas.
• As per the World Banks report, internet penetration across Kuwait has increased significantly over the past decade. Internet penetration in 2010 stood at 61%, which surged to 82% in 2015. Encouragingly, within five years, the country's internet penetration increased to 99%. The pandemic accelerated global digitalization and highlighted the need for internet access.

Rise in Wireless Penetration

• One of the area's highest phone and internet penetration rates phone and internet penetration rates in the area is found in the Kuwaiti market. The people are educated, youthful, and tech-savvy. Most have access to social media and other platforms, which allows them to obtain and use much digital information. Due to the factors above and Kuwait's potential for e-commerce and technology, businesses and organizations have begun to transition to digital marketing to promote their goods and services.
• Regarding the population's interest rate for mobile phone use, Kuwait has an influential position globally. At the beginning of the current year, Kuwait had 6.51 million mobile connections, according to data from GSMA Intelligence. Kuwait's mobile relations in January this year amounted to 149.5% of the country's entire population. However, per the data, Kuwait saw a 522 thousand (-7.4%) decrease in mobile connections between last and current year. Kuwait's mobile phone penetration as a percentage of the population historically peaked in 2014 at 206%.
• Mobile applications have recently made significant strides in providing services in many different fields, indicating a critical role in improving people's lives. Applications for mobile devices are becoming useful tools for enhancing social connections, internet interactions, and transactions by making them richer and more detailed. With the help of the average overall download speed in the country, people can easily access the most important sites required. Using various applications through smartphone technology has made several new services available, such as 2-way data transfer, e-payment, e-health services and etc.
• The number of unique mobile subscribers in MENA reached a significant height during the COVID 19 pandemic, representing around 65% of the population. According to GSMA, the mobile market in the region would reach several milestones over the next five years, with more than half of the population subscribing to mobile internet services by next year and 700 million mobile connections by 2025. These achievements will be underpinned by operators' continued investments in network infrastructure. Encouragingly smartphone penetration continues to grow. Some carriers have released inexpensive smartphones to encourage mobile broadband use, some with financing possibilities. In MENA, there would be approximately 200 million more smartphone connections during the following five years, bringing the total to 565 million by the end of 2025 - an adoption rate of nearly 80%, states the GSMA report.
• In MENA, more than two-thirds of the population would use mobile services by 2025, according to GSMA. Additionally, the area anticipates a rise of almost 60 million additional mobile customers for the forecast period.

Kuwait Telecom Market Competitor Analysis

The Kuwait telecom market is consolidated, with few players capturing a significant market share. Some major players in the market are Mobile Telecommunications Company (Zain Kuwait), Wataniya Telecom (Ooredoo Kuwait), Kuwait Telecommunications Company (STC Kuwait), and other fixed-line service providers.

In August 2022, Ooredoo Kuwait notified of the opening of three brand new stores. The expansion of Ooredoo's presence in Kuwait is a component of the company's goal to give all its customers easily accessible, personalized services that would improve their telecom experience.

In July 2022, Kuwait Telecommunications Company (STC) announced the deployment of a fully converged core 5GC network in the country. With this news, new avenues have been opened, new services will be available to clients, and businesses will have more chances to provide cutting-edge customer care. The company's ability to serve clients considering a path of digital transformation has been expanded thanks to the converged core solution implemented by STC Kuwait.

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