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Middle East SIM card shipments gain momentum

The SIM card shipments in the Middle East rose seven per cent year on year in 2016 due to growing mobile penetration, growth of population and demand.

But Jonathan O’Flaherty, research analyst at ABI Research, told Gulf News that the future will be very different though as the region is expected to implement SIM card ID registration in various countries such as Saudi Arabia. This, as was seen in India and Pakistan in 2003 onwards, will create a drastic drop in shipments for a few years as the process of attaining SIM cards becomes regulated and monitored to prevent illegal and dangerous activity.

“Political instability and security risks in many regions have already accelerated the implementation of SIM ID registration for prepaid SIM cards, which is viewed as a highly effective method to counter national security risks and illegal activity. With more countries expected to implement ID registration in the near future, this could have a negative impact on the market,” he said.

The UAE Telecommunications Regulatory Authority started “My Number My Identity” campaign on July 17, 2012, in collaboration with the two telecom operators (etisalat and du) to increase mobile subscriber awareness and help protect subscribers’ rights and prevent risks of misuse which could result in civil and criminal cases.

According to TRA stats, the emirate had 19.76 million active mobile subscribers as in May this year compared to 19.25 million a year ago.

“While I mentioned India and Pakistan as examples, I do not believe that the region will be as severely hit as them as SIM registration won’t begin till 2017-2018 and will counterbalanced with 4G and LTE growth,” he said.

Sukhdev Singh, vice-president at market research and analysis services provider AMRB, echoed in the same voice that with more devices getting connected, SIM card registrations will increase for the next three years despite putting negative pressure on mobile phones SIM registrations.

“Machine to machine and internet of things will push the demand up, apart from the use of embedded SIMs in medical devices. Ultimately, it will start to sink after a certain point as the use of embedded SIMs will grow,” he said.

The global SIM card shipments rose by 3.9 per cent year on year in 2016 to reach over 5.4 billion units, with this number expected to hit over 5.8 million in 2020.

However, he said that Asia could be considered a market highlight, with its success somewhat offsetting disappointing and stagnant results in the Americas and Western Europe, driven by the closure of Softcard, directly impacting the issuance of single wire protocol (SWP) SIMs, and high saturation levels respectively.

“The presented growth opportunity of rising SIM use cases in M2M applications and the emerging IoT may be enough to counterbalance any negative impact on the traditional SIM card market,” he said.

Overall, he said the mixture of the saturated and established nature of the traditional handset SIM card market, paired with growing M2M (machine-to-machine) and IoT use cases, will create a market capable of future low level annual growth rates between two to four per cent.

With the rise of IoT and M2M use cases, business models will need to pivot, with an emphasis placed on supporting over-the-air (OTA) platforms and services including key management, life cycle management, firmware updates, and subscription management.

“Future revenue growth will be primarily driven by platforms and services as opposed to the hardware centric revenue base which has brought the market to where it is today. This is where the future value resides within the SIM card market,” he said.



Source: http://gulfnews.com/business/sectors/telecoms/middle-east-sim-card-shipments-rise-7-last-year-1.2068126

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