It seems that Saudi ISP’s can expect some challenging times ahead. A 70 percent rate cut on backbone connections over two Mbps, introduced last week by the national regulator, is set to reshuffle the Saudi Internet Service Providing market. According to a new Pyramid Research release, this cut will pressure major market players to pay for faster connectivity, while those ISPs unable to afford such an upgrade are likely to loose their market share.
Out of the 29 ISPs currently operating in Saudi Arabia, Pyramid Research predicts that 11 companies will fold and three will merge with stronger competitors by mid-2002. Surviving competition means that the Kingdom’s ISPs must keep on the edge of their seat when it comes to expanding their client base and creating additional revenue streams through managed hosting and value added services.
Pyramid Research figures suggest that ISP spin-offs should target the few large corporate companies and government agencies, where the big money lies, rather than servicing the many SMEs around. A few ministries, the state gas company and the state electric company have already announced tenders for lucrative projects open to ISPs. In the private sector, big projects for ISPs begin with the two largest corporations ¯ Aramco, the leading oil company, and Sabek, the leading gas company.
However, such high-profile projects are likely to give the competitive edge to those with ample cash surplus, able to bear with the government’s late payments for example. This shifts the spotlight to the Saudi ISP frontrunners, namely Awalnet, Ogernet, Atheer (Batelco Jeraisy), Naseej, Alamiah, Nesma, Dallah, Saudi Online (SOL) and PrimeNet.
According to Pyramid Research, two leading ISPs that will be competing for lucrative government contracts are Batelco Jeraisy and Alamiah. Across the spectrum, Saudi.net, is among the youngest and smallest ISPs but unlikely to fold because it is owned by the Saudi Telecommunications Company. ¯ (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)
