FTTH MENA Panorama 2018Annual Study by FTTH Council MENA & Idate

MENA Broadband Status

Market at September 2018

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Agenda

• Study Background

- Objectives

- Available results

• Status of Broadband in the region

- Leading access technologies

- National programs

• FTTH/B in MENA

- Overview

- Overall figures

- FTTH/B subscribers trends

- FTTH/B Homes Passed distribution

- FTTH/B technologies

- FTTH/B Take Rates in MENA

- Services : maximum speed rates and average tariffs

• Conclusion – Main outputs

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Study Background

Objectives, available results

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ObjectivesMission on behalf of the FTTH Council MENA

Objective: to provide a complete summary of the status of FTTH/B in MENA at Sept. 2018

• 17 countries analyzed (1)

• Distinction between architecture: FTTH/B vs FTTN (FTTN/C+VDSL, FTTx+Docsis 3.0)

• Information on the national Broadband market (national program, regulation, overall figures)

• FTTH/B Definition by FTTH Councils Worldwide (2)

Characterization of each project includes:

• Organization initiating the project

• Key parameters & Figures

• Technical parameters

• Financing & Business model

Methodology

• Desk research

• Bottom up approach

• Direct contacts with FTTH players (questionnaires, phone interviews) & IDATE’s partners in MENA

• Information exchange with FTTH Council MENA members

(1): Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Tunisia and UAE

(2): FTTH/B definition available at : www.ftthcouncil.eu/documents/Publications/FCGA%20-%20Definition%20of%20Terms%20-%20Revisions2016.pdf

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Available results

• About 52 projects listed in 17 MENA countries at September 2018

Two main components identified:

Quantitative data Qualitative data

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Status of Broadband in MENA

Leading access technologies – National programs

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Leading access technologies

ADSL access technology is still leading the Fixed

Broadband market.

More than 31.8 million fixed BB subscribers and 299 million Mobile BB subscribers in MENA

at September 2018

Bahrain 43,35%

Kuwait 32,92%

Lebanon 0,19%

Oman 17,95%

Qatar 98,87%

Tunisia 1,02%

UAE 99,09%

Ratio: FTTH Subscribers / Total Fixed BB Subs

However FTTH/B market share is growing in some

countries like Bahrain, Kuwait, Lebanon, Tunisia

and Oman or is already leading in others like UAE

and Qatar.

FTTH/B subscribers represent around 19% of total fixed BB subscribers in MENA by September 2018

Mobile BB is the leading choice for many end users in 12 over 17 analyzed markets.

In terms of 4G and 5G development, the region has extended the deployment of 4G networks. 5G deployment

agreements & trials have been observed in countries such as Kuwait, Qatar, Saudi Arabia and UAE.

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National Programs

Many nations have started its FTTH/B deployment based on the promotion of a

National Broadband Plan. Each country has defined a set of goals based on

coverage rate.

In Qatar, thanks to the QNBN stimulation, FTTH/B is clearly leading the access

market (representing 98% of fixed BB subscriptions by September 2018)

In Lebanon, where the program aims to cover the whole country with fiber based

infrastructure by end 2022. The Minister announced that the goal is to reach at least 85%

of homes in the short term.

In Oman, OBC is deploying a large neutral network, opened to all telcos

In Kuwait the MoC extended Fiber coverage to more than 67K homes by 2018 (phase 2 of

the Program) and more than 100K homes in Phase 3.

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FTTH/B in MENA

Overview – Overall figures – Countries figures

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FTTH/B in MENA – Overview

• About 52 projects listed in 17 MENA countries at September 2018

Incumbents and Alternative operators are the main

actors involved in FTTH/B rollout

National programs should boost FTTH/B market in

MENA in the middle to long term

Countries Incumbents Alternative ISPsNational Companies

& Public initiatives

Housing companies

& Others

Total # of

homes passed 5 410 644 1 710 500 371 620 160 200

% 71% 22% 5% 2%

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FTTH/B in MENA – Overall Figures

In September 2018

FTTH/B Subscribers:

3 083 174 → + 4% YoY growth

FTTH/B Homes Passed:

6 788 724 → + 11% YoY growth

Average Penetration Rate (FTTH/B

subs / Homes Passed):

45,2 % (45% in September 2017)

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FTTH/B in MENA – Countries positioning

In September 2018

Mature & Dynamic markets

Qatar

UAE

Oman

Bahrain

Saudi Arabia

Kuwait

High Potential markets

Iran

Libya

Markets with significant

announcements and/or

progresses

Lebanon

Iraq

Morocco

Algeria

Tunisia

Steady markets with few

evolution

Jordan

Egypt

Palestine

Sudan

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Main trends in MENA’s FTTH/B market: subscribers

In September 2018

UAE is the main FTTH/B market (1.625 million FTTH/B subs)2 players are involved in FTTH/B market

Etisalat is dominating the FTTH/B market with a stable market share of 88% and a national

Tremendous take up rate (subs/HP): 95%, which confirms the great commercial success of FTTH

… followed by Saudi Arabia (more than 773K FTTH/B subs)Market dynamism confirmed from one year to another (+6% subscribers growth between Sept 17 and Sept 18)

2 main players involved in national rollouts

STC is the leader among FTTH/B players: with a stable market share of 68%

FTTH/B market is growing in Qatar (392K FTTH/B subs)Ambitious objective from incumbent Ooredoo

National FTTH coverage: reached in 2014!

A positive growth in the number of subscribers (+16% Sept 17 to Sept 18)

Ooredoo is pushing its end users to switch to FTTH

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Main trends in MENA’s FTTH/B market: Homes Passed

In September 2018, Saudi Arabia reached 3.5 million HP and UAE 1.7 million HP by FTTH/B

-

500 000

1000 000

1500 000

2000 000

2500 000

3000 000

3500 000

4000 000

SaudiArabia

UAE Qatar Oman Morocco Bahrain Egypt Iraq Kuwait Tunisia Lebanon Algeria

Most advanced

FTTH/B projects

FTTH/B expansion

due to national

program/company

In the process to expand

their national FTTH/B

network

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Main trends in MENA’s FTTH/B market

High Take up Rates (1) in MENA

(1) Number of subscribers overt total Homes Passed in FTTH/B

UAE: > 95%

Qatar: > 93.5%

Kuwait: > 46%

Average FTTH/B Take up

Rates in MENA: > 46%

FTTH

94%FTTB

6%

PON

95%Ethernet

5%

By September 2018, FTTH is the main architecture deployed over GPON technologies

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FTTH/B services and tariffs in MENA

The region started the Gigabit race

More countries offer a 1Gbps offer over FTTH/B… and also 10Gbps:

Oman

Qatar

UAE

Bahrain

Saudi Arabia

Qatar

UAE

And trials are being performed for 20G connections…

0

50

100

150

200

250

Europe NA APAC LATAM MENA

FTTH tariffs are relatively expensive compared to other regions

Average monthly cost for a 100 Mbps FTTH

connection (USD)

End users can to pay up to 150

USD per month for a 100 Mbps

FTTH connection

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Conclusion – Main outputs

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Main outputs

The region needs the deployment of FTTH/B networks in new countries

• The growth in FTTH/B coverage and subscribers is led by the dynamism of GCC countries,

and notably UAE, KSA and Qatar.

• However these countries are already reaching the highest point of its deployment and

reaching more than 90% of homes. Therefore new countries will need to take the role as

leaders of new deployments.

Average % of Fixed BB subscribers in total Households

64% in GCC

countries(from 19% in Kuwait to more

than 100% in Bahrain)

36% in North African

countries(from 1% in Tunisia to 48% in Algeria)

39% in ME countries(from 19% in Iraq to 60% in

Lebanon, 48% in Iran)

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Main outputs

An increase of the adoption of FTTH/B technology

• Based on the deployment of the different FTTH/B projects in the region and the commercial evolution from

operators and organisms, it can be inferred that for 2019:

• The number of FTTH/B subscribers will increase 18% in order to reach 3.6 M subscribers

• While the FTTH/B homes passed will increase to 7.8 M, representing an increase of 15%.

• We hope that fiber networks will continue to grow in MENA, since new investment and rollouts started in 2018

• Political or economic situation still a concern for FTTH in the Region

• But the involvement of alternative players is growing (Tunisia, Morocco)

• As in other regions, few other players show a strong interest in FTTH/B rollouts (some ROEs in

Egypt, small telcos in Jordan or Palestine)

• TCI in Iran starting FTTH rollouts…a potential of 10.4 M Broadband subscribers

• Fiber take up rate: At 3Q 2018, nearly 46% of Homes passed by Fiber have subscribed to this

technology vs 39% at 3Q2015 and 20% of the Fixed BB subscribers are using fiber in

comparison to 7% at 3Q2015.

FTTH/B evolution in MENA – 1 Year Forecast

Incumbents are leading the markets

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Mobile BB as a competitor for FTTH in the region ?

Mobile broadband is very present in the region… and this is the main challenger for

FTTH/B services

• The need for interconnecting base station with fiber will increase (5G)… and also a bigger demand of higher

bandwidth and low latency that fiber only can manage

• Mobile Broadband subscriptions overpass fixed Broadband subscriptions in several countries

(Egypt, Morocco, Jordan,…), and this trend might not change even with the rollout of new

networks (The deployment of 4G technologies could compete with Fixed BB services)

However the evolution and testing of 5G could encourage FTTH deployments in the region

Bahrain: 12 times more

MBB than FBB subs

Qatar: 10 times more

MBB than FBB subs

Jordan: 14 times more

MBB than FBB subs

Kuwait: 64 times more

MBB than FBB subs

Morocco: 15 times more

MBB than FBB subs

Tunisia: 8 times more

MBB than FBB subs

Oman: 15 times more

MBB than FBB subs

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MENA is progressing in the global ranking !!

UAE and Qatar still among World Leaders

Two countries with good progress

- Bahrain : 35,7%

- Oman : 9%

Country Ranking (FTTH/B subs

over Total HH)

UAE

Stay tuned!Qatar

Bahrain 35.7%

Saudi Arabia 13.3%

Oman 9%

Jordan & Iraq close

to 1% penetration