The latest update on the Kuwaiti telecoms market contains new data on the size of the country’s mobile telephony market as of mid-2009. Along with data published by Kuwait’s two largest mobile operators, Zain and Wataniya, our assessment of the market includes estimates for the size of newcomer Viva’s mobile customer base at the end of June.

In the first half of 2009, Kuwait’s mobile customer base expanded by almost 12%. Growth in the first half of 2009 was significantly higher than at any time in the previous year. One of the biggest factors behind the upsurge in Kuwaiti mobile customer growth has been the launch of commercial services by Saudi Telecom’s Kuwaiti mobile business Viva. Since the launch of commercial services in December 2008 Viva has proceeded to secure more than 10% of the entire mobile market. Although Viva’s CEO previously stated that Viva’s goal was to attract 300,000 subscribers within its first year of operations, the operator already appears to have exceeded this target. According to the most recent reports, Viva’s goal is to reach a 20% market share by the end of 2010.

The forecast for the Kuwaiti mobile subscriber market anticipates growth of over 22% for 2009 as a whole. By the end of the year, we predict that penetration will reach 122%, up from 110% in mid-2009.

Continued growth over and above 100% reflects the prevalence of multiple SIM owners in the country’s mobile market. Our forecast also accounts for a certain number of inactive prepaid users within the sector.

Our forecast for the number of Kuwaiti internet users and broadband subscribers remain unchanged this quarter. This follows the introduction of new forecasts for both of these markets in our previous update.

In July, it was reported that Kuwait’s Ministry of Communications (MoC) had suspended the licences of a number of ISPs providing wireless internet and WiMAX services. Several reasons have been given for suspending the licences. These include, in some cases, the lack of an appropriate licence for the services offered; they also include a failure to implement services within a designated time period and the failure to pay levies owed to the government as per existing agreements. The MoC is currently preparing to submit a fresh tender for wireless internet and WiMAX services in the country.

Another significant development in the Kuwaiti telecoms sector was the news that shareholders in the country’s Zain Group had reached a preliminary agreement with a consortium to sell a 46% stake in the company. The Abu Dhabi Investment Authority (ADIA) is reportedly part of the consortium negotiating the deal, thought to be worth around US$15bn.

Meanwhile, in our latest set of business environment ratings for the Middle East, Kuwait has seen a further downward slippage for its Telecoms Market rating. The lower rating largely reflects the weaker mobile average revenue per user (ARPU), which has resulted from the onset of increased competition.