Boston, MA -- (SBWIRE) -- 01/15/2013 -- BMI View: Kuwait is one of the highest value markets in the world in terms of ARPU, derived from high per capita incomes. It has a highly developed mobile market, with strong competition between Zain, Wataniya and VIVA. This competition has benefited consumers and helped drive up penetration rates in excess of 175%. However, competition between operators has begun to erode ARPU levels, and the lack of postpaid uptake leaves prices, and operators, vulnerable to further downside as customers are more mobile between networks.

Key Data:

- The mobile market continued to experience strong growth in H112, with net additions of 255,000 taking penetration to 175.9%.
- Monthly blended ARPU has been on a downward trajectory, with the market share weighted average falling to KWD37.6 in Q212, down from KWD43 in Q211. Key to the decline in prices has been the competitive threat of VIVA.

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Key Trends And Developments

The roll-out of LTE by VIVA has been followed by significant upgrades to the mobile data networks of Zain and Wataniya, including projects to prepare them for LTE upgrades. This development bodes for the operators' ARPU, which has come under increasing downward pressure from competition, especially in the voice segment. We also expect it to drive growth in the broadband segment, which has long been held back by a lack of competition and limited investment in fixed network infrastructure.

Some of the major developments in the market include plans by the Ministry of Communications (MoC) to issue new operating licences to internet service providers (ISPs), the launch of IPTV services by ISP FASTtelco, and the deployment of new value-added services by the mobile operators. VIVA has launched an HSPA+ mobile data network capable of providing speeds of up to 42.2Mbps. The operator, which has made data a key part of strategy, reported a 47% y-o-y increase in revenue in 2011 to KWD94mn.

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