www.citc.gov.sa

Annual Report 1437-1438 2016

Custodian of the Two Holly Mosques King Salman bin Abdulaziz Al Saud His Royal Highness His Royal Highness Prince Muhammad bin Naif bin Abdulaziz Al Saud Prince Muhammad bin Salman bin Abdulaziz Al Saud

Crown Prince Deputy Crown Prince Minister of Interior Minister of Defense Deputy Prime Minister Second Deputy Prime Minister Annual Report 2016

Chairman's Statement 10 7. Achievements and International Participation 74 Governor's Statement 12

8. Media Activities 1. Executive Summary 16 80

2. Organizational Framework 22 9. Studies 84 3. Transformation of the ICT sector Kingdom Vision 2030 And National 26 Transformation Program 2020 10. Indicators of the ICT Sector in the Kingdom 90

4. The Commission's Strategy (2016-2020) 30

5. Current Situation of the Commission 36 11. Di culties and Challenges 100

6. Main Activities and Achievements 42 12. Appendixes 108 6.1 Licenses for providing CIT services 46 6.2 User Protection 50 Appendix A: Resolutions of the Board of Directors 108 6.3 Organizing the CIT sector 60 Appendix B: Activities and other achievements 110 6.4 Limited Resources and information Technology 64 Appendix C: Issued Licenses 113 6.5 Universal Service Fund and spreading telecom- 66 Appendix D: Final accounts 114 munication services

8 9 The Unified License encourages service providers to raise the competition level for serving users Chairman's Statement

On this occasion of publishing the 2020 Strategy,” an integrated the competition level for serving I thank the Governor of the annual report of CITC for the fiscal national approach intended to users by increasing available Commission, my colleagues, year 1437 - 1438 H, and on behalf motivate and enhance the ICT options for services that best members of the Board of Directors, We seek to implement the Board of Directors and all CITC sector. The ambitious objectives suit them and motivating service CITC staff, all partners and those integrated national ICT staff, I happily express heartfelt of this strategy were intended to providers to enhance network interested in this sector who have services that align with thanks to the Custodian of the Two create new job opportunities in efficiency and minimize costs. The effectively used their knowledge Kingdom Vision 2030 Holy Mosques King Salman bin the field of ICT while providing and desired result would be increased and expertise to contribute to its Abdulaziz and his crown prince and expanding the use of broadband utilization and optimal use of development and enrichment. by fostering development, his deputy crown for their special services, which would ultimately services in all parts of the Kingdom. promoting sustainment, attention and precise guidance improve the international ranking In addition, the Commission has and encouraging the the ICT sector in order to achieve of the Kingdom all international issued the Carrier Service Provider efficient performance development and prosperity for indicators. (CSP) fiber infrastructure in the this blessed country and raise its One of the most prominent Kingdom. Chairman of the Board of both government and status among nations. achievements of the Commission Minister of CIT private sectors. At the beginning of this year, the this year has been the of the unified Dr. Mohammad I. Al-Suwayel Commission approved the “CITC license, service providers to raise

10 11 Annual Report 2016

151% Use of mobile telecom services/capita

75% ' Use of broadband Governor s services via mobile telecom networks/capita preparation for its administrative This report focuses on the many Statement system through restructuring its projects and programs that have sectors. Such restructuring should helped to develop the ICT sector help to harmonize its tasks and and utilize it in all fields. On behalf ICT is no longer merely a medium government performance has develop its outputs so as to keep of all CITC members, I would like to used by nations. It has become an been directed toward excellence pace with development in this take this opportunity to thank the objective in itself, an integral part and leadership. The crown prince sector and achieve the objectives Chairman of the Board of Directors, of the human hierarchy of needs. and deputy crown prince -may all government bodies pursue. By Minister of Communication and Because of its part in maintaining Allah save them- helped achieve 74.9% the end of 2016, about 151% of Information Technology, and the security and welfare of this through the lens of Vision the population were using mobile members of the Board for the many Internet coverage / capita We are responsible for six nations, it has evolved into an 2030 and a package of supporting telecom services, about 75% were projects and programs that have initiatives in the framework essential for defending countries, initiatives included in the National accessing broadband services helped to develop and utilize the ICT of the Transformation protecting human rights, and Transformation Program 2020. via mobile telecom networks, sector. I would also like to thank all Program 2020 and are enriching knowledge. Early on, The CIT sector was among the top and about 74.9% were using the CITC staff for their efforts as well the government of this country priorities, especially broadband internet. At the same time, about as all who have offered feedback working on developing ICT recognized the value of ICT and services, with the goal of 90% 32.3% of households were using and constructive criticism that infrastructure, with the goal invested human and financial coverage in densely populated fixed telecom networks, and about contributed to the development of of providing broadband resources into raising the bar for areas and a 66% coverage in low- 46.8% were accessing broadband the projects of the Commission. services to all provinces of ICT delivery density areas. 6٪ via mobile telecom networks. In Allah is the All-Knower of intentions addition, the ICT sector reached and He leads to the straight path the Kingdom. As a result of the firm intentions In order to cope with this extensive Contribution of CIT sector and consistent efforts of the change, CITC has begun to align of GDP about 6% of the GDP. Custodian of the Two Holy Mosques its strategic plan with the National Governor of CITC King Salman bin Abdulaziz -may Transformation Program and has Dr. Abdulaziz S. Al-Ruwais, Allah save him- the compass of also begun to implement an internal

12 13 01Executive Summary

14 15 Annual Report 2016

First: Licenses

By the end of 2016, CITC had issued 349 new licenses for 349 various services including a new Total number of licenses license for providing satellite broadband services. Provision 01 was made for Unified Licensing of Executive telecom companies that have an infrastructure and are listed on the Saudi Stock Market. CITC has also Summary extended pre-existing licenses for CIT companies that are authorized Unified Licensing issued for to operate in the Kingdom, have companies an infrastructure and are listed on the Saudi Stock Market. A CITC application form is now available This report was prepared in to apply for a license to provide accordance with Royal Decree digital authorization services. The first license was issued to Carrier 19/12/1433 number 53703 dated ( H), Service Provider (CSP). which emphasized the obligation of all ministries and government bodies First Carrier Service Provider license issued to conform to article 29 of the Council Second: User Protection of Ministers Rules issued under Royal Decree A/13, dated ( 3 / 3 / 1414 H), and During 2016, CITC received 77,248 also the requirements of article 16 of complaints from CIT users, and the organization of CITC. This report the Telecom Violations Committee covers the achievements of CITC along issued 919 decision. In addition, more than one million lines were with suggestions for overcoming ported between licensed service challenges during the fiscal year 2016 One Million providers, and 938,365 add filtering ( 1437 - 1438 H). lines have switched carriers service requests were received These achievements and challenges and handled. can be summed up as follows:

16 17 Annual Report 2016

Fifth: Universal Service Third: Organization of the Fourth: Scarce Resources Fund

Telecommunication and Prior to 2016, CITC completed, In the field of scarce resources localities distributed throughout through USF, eight projects involving Information Technology management, CITC manages the Kingdom. deployment of telecommunication Sector frequencies and monitors the impl- 3 As a part of “expanding the scope services to remote areas that are ementation of the National Frequency Projects of work for the Universal Service not commercially viable for telecom This year, CITC has approved a limit Spectrum Plan. CITC has started Fund to support investment in companies licensed to provide of 10 halalas symmetrically for implementing the “vacating of broadband for remote areas“ public telecom services. Projects wholesale local voice-call termination frequencies providing telecom- Projects 9, 10, and 11, initiative, the first project for 9, 10, and 11, aimed at providing on mobile telecommunication munication services“ initiative, which for providing voice wireless broadband has been voice and internet services to a networks and a limit of 4.50 halalas is part of the National Transformation and internet services introduced. The objective of this large number of remote localities symmetrically for wholesale local 2020 program. to a large number of initiative is to increase the coverage in a number of provinces of the voice-call termination on fixed telecom The percentage of progress with the remote localities, were of wireless broadband networks to Kingdom, were completed this year. networks. In the interest of developing initiative is 34%. As for numbering completed this year. more than 10 megabyte per second Eleven of the fourteen projects and stimulating the sector, a project resources, CITC has handled, reviewed in remote areas so as to cover 70% have been completed, and service to establish an appropriate way to and allocated the applications of available of households. is now available to about 17,736 license cloud computing services was numbering resources. initiated. During this year, CITC drafted an organizational framework for this Number of localities that have service that will be issued during the been offered services scattered Introducing the first project involving first quarter of 2017. across all areas and provinces wireless broadband A project launched to of the Kingdom 17,736 for remote areas CITC’s Interconnection Guidelines identify the appropriate way and Guidelines for Access to Physical for licensing and organizing Facilities was prepared and approved cloud computing services in the Kingdom this year.

11 projects finalised out of 14 projects 01Executive The ceiling on the price of wholesale local voice- The Target More than 10 megabytes Summary call termination on fixed telecommunication 4.5 networks is 4.50 halalas symmetrically. per second in remote areas Halalas so as to cover 70% of houses

18 19 Organizational02 Framework

20 21 Annual Report 2016

This Act involves a number of objectives such as:

Providing advanced and adequate telecommunication services, with affordable prices. Providing sufficient advanced ICT services, Creating an appropriate 02 atmosphere to encourage fair with reasonable prices, competition. Organizational and creating the right atmosphere to encourage Using frequencies effectively. Framework fair competition

Localization of telecommunication technology and managing recent advancements.

Clarity and transparency in CITC is responsible for regulating the procedures. ICT sector in the Kingdom of Saudi Arabia. The Telecommunications Act, issued by Royal Decree No. M/12, dated Equality and neutrality. 31 / 12 / 1422 H and its Bylaws, issued in 1423 H, provide the legal framework Protection of the public interest for organizing this sector. as well as the interest of users and investors.

CITC organizational framework, issued by the ordinance of the Council of Ministers No. 74, dated 5 / 3 / 1422 H, and amended by Ordinance of the Council of Ministers No. 133, dated 5 / 5 / 1422 H, specifies the tasks of CITC and its areas of specialization. According to these decrees, CITC is the regulator of this.sector, and has a legal personality and is financially and administratively independent

22 23 Transformation03 of the ICT sector Kingdom Vision 2030 and the National Transformation Program 2020

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3. Transformation of the Telecommunication sector: Kingdom Vision 2030 and the National Transformation Program 2020

Ambitious CITC started to execute the assigned initiatives as the followings : Transformation03 of the ICT sector 6 Nation The main challenges Creating an organizational Kingdom Vision 2030 and the National Creating organizational framework for facilitating of the ICT sector frameworks to encourage deployment of service and public telecommunication rising to the operational Transformation Program 2020 have been identified, service providers to invest challenges between and over the next in broadband infrastructure operators and municipalities Themes (percentage of achievement (percentage of achievement five years, gaps in 16%) 17%) of Vision this sector will be Thriving 2003 Vibrant filled to meet the Kingdom Vision 2030 includes three Economy Society requirements of Vacating frequencies for main themes that form a blueprint for Kingdom Vision 2030. Expanding the scope of the providing telecommunica- creating an “An Ambitious Nation, A work done by the Universal tion services through the Service Fund to support completion of the National Vibrant Society and A Thriving Economy“. investment in broadband for Frequency Spectrum Plan The Transformation Program 2020 remote areas (percentage (percentage of achievement of achievement 16%) 34%) presents the first phase of converting the objectives of the Vision into reality. In this regard, the Program offers initiatives, linked to executive plans, that should be Developing standards for Developing indicators for implemented by the various government civil works for networks and measuring broadband buildings, and integrating service quality and bodies. them into building and deploying the public to To that end, CITC is responsible for development regulations motivate service providers while making use of existing to improve the quality of working on six initiatives intended to infrastructure (percentage their services (percentage motivate society to reach for and attain of achievement 49%) of achievement 15%) the aspirations of the Vision.

26 27 04The Commission's Strategy

28 29 Annual Report 2016

CITC strategy consists of four main completion of the project. In themes: ICT infrastructure and addition, main performance scarce resources; ICT services indicators have been identified to system; improving ICT skills; and ensure appropriate monitoring launching 7 initiatives, translated of implementation efforts and into 37 strategic projects, to facilitate observation of workflow ensure the efficient and effective in implementing these initiatives.

Strategic projects for initiating Main themes Strategic initiatives the ICT infrastructure and 04The scarce resources ' Commission s ICT infrastructure and Broadband strategy scarce resources ICT infrastructure and scarce resources Strategy Review of legal and Expansion of wireless regulatory frameworks network coverage

Entrepreneurship, innovation Creating the National localization and foreign investment (Internet Exchange (NIXP Considering developmental plans in the Providing frequency Kingdom and the ICT's current situation, ICT services Software, applications system and digital content spectrum frameworks and existing organizational

plans compared to international best Protection and security Improvement of service quality practices, developments in ICT regional of the Internet and price quality and international markets and recent

advancements and variables in services ICT skills ICT human capital and technologies, ICT has created “CITC Strategy 2020.” This strategic plan, Internal improvement Internal improvement created in 2015, is intended to fill gaps factors factors Total number of strategic projects and achieve desired objectives between 2016 and 2020. 4 Main themes 7 Initiatives 37 Projects

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Objectives and ICT strategic indicators

Providing broadband services for all parts of the Kingdom through Increasing ICT local ICT local added value stimulating investment in infrastruc- added value ture and developing tool organiza- tional and technical framework Billion 77 Billion 100 2015 baseline 2020 targets Percentage of ber optic 2015 baseline 2020 targets coverage for houses in high-density urban areas 44% 80%

Percentage of ber optic coverage for houses in urban areas 12% 55%

Percentage of wireless broadband network coverage more than 10 megabytes) per second) 12% 70% in remote areas

Providing critical resources Enhancing and encouraging Her ndahl-Hirschman an eective and fair competition especially spectrum frequency, index for rms‘ shares (HHI) environment in ICT elds for ICT services* 5,000 3,800 2015 baseline 2020 targets 04The Percentage of the available 42% 80% Commission's frequency spectrum for Targets have been updated to be aligned telecommunication services 2015 baseline 2020 targets Strategy of the total allocated telecom- with the targets and initiatives of the muniction services National Transformation Program 2020

32 33 05Current Situation of the Commission

34 35 Annual Report 2016

5.1 Organizational Structure

CITC has reconstructed its organizational structure as a first executive step aligned with government and sector attitudes and in accordance with the National Transformation Program and the strategic objectives of the commission. The executive committee of the Board of Directors has adopted the basic organizational structure below, and the detailed organizational structure will be issued at the beginning of 2017. Board of Directors 05Current Review Committee Executive Committee Internal Auditing Governor Oce

Situation of the National Committee for Governor Legal Advisor Information Society

Electronic Transactions Governor Consultants Commission Committee

Violation Resolution Board Secretary Committee

Legal Support Institutional Communication

IT A airs Sector Telecommunication A airs Sector

Support Sector for Administrative and Financial A airs Support Sector Support Sector for Frequency for Organiza- Spectrum and tion and Compe- Standards and tition Technical Support

National Digital CITC I T Information Environ- Internet Depart- Security Regional and Planning -ment Services Subscribers Infrastructure -ment Guidance International and System Protection Development Center A airs Projects

36 37 Annual Report 2016

5.2 Board of Directors 5.3 Institutional Structure The Board of Directors is the highest governing authority of 5.3.1 Manpower CITC. It oversees its administration, conducts its affairs, and develops CITC seeks to recruit competent and implements its general and experienced staff to perform policies. The Board consists of: H.E. Dr. its tasks and achieve its objectives Mohammad Ibrahim Al-Suwaiyel and to maintain a positive, ICT Minister stimulating and highly-productive Chairman of the Board work environment.

H.E Dr. Mr. Mr. Mr. Abdulaziz Salem Al-Rwais Abdul Aziz M. Al Suwaliem Fahad Abdullah Al-Dakkan Sultan Mohammad Al-Malik Governor of CITC, Deputy KACST Ministry of Finance ICT Ministry 99.27% Chairman of the Board Saudis

Number412 of 0.73% CITC sta non-Saudis Mr. Dr. Dr. Dr. Majed Abdullah Al-Bawardi Abdulaziz Abdulrahman Al-Gwaiz Khalid Sulaiman Al-Rajhi Saeed Terad Bin Jarman Ministry of Commerce Private Sector Private Sector Private Sector and Investment

Appendix (A) shows the main decisions made this year 1437 H -1438 H .

38 39 06Main Activities and Achievements

40 41 Annual Report 2016

Providing internet 6. Main Activities and service on airplanes in Saudi airspace Achievements Providing audio Providing telecom Fixed 1 text (700) 6.1 ICT service licenses 2 infrastructure services 3 6.1.1 Licenses (Individual and Class)

The total active licenses amounted 5 Global mobile personal Providing hosting to 349 by the end of 2016 communication service Providing Short services for ICT and they are: 1 94 GMPCS Message Service SMS software and hardware

Providing telecom mobile infrastructure services 3 Providing Internet 349 46 Services (ISP) Licenses by the 1 end of 2016 Providing Carrier Service Provider 19 (CSP) 3 Providing telecom services Providing using very-small-aperture Data Services terminals for satellite (VSAT) Automatic Vehicle Providing Call 118 Location Services (AVL) 43 Center Services 3 Operating systems and 2 Providing, Managing networks Global Mobile Providing Services for and Monitoring ICT Personal Communication Mobile (Virtual Network Networks Services Services GMPCS Operators) MVNOs 5

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Fixed Telecom Automatic Vehicle 2 Services 118 Location Services (AVL)

Mobile Telecom Short Message 3 Services 94 Service

Providing Mobile Audio Text Virtual Network Services 700 2 Operators 3

3 Data Services 43 Call Center Services

Providing, managing and monitoring ICT 46 Providing internet service 5 Total Number of licenses issued by the end of each year Network Services ٢

Providing Telecom Services Providing hosting 349 services for ICT software using very-small-aperture 325 315 19 5 and hardware 309 terminals for satellite (VSAT) 292 ٢

230 Operating personal Providing internet telecom mobile satellite service on airplanes in 3 systems and networks 1 Saudi airspace

Providing licensing services Providing licensing service for Global Mobile Personal for Carrier Service 1 Communication Services 1 Providers (CSP) (GMPCS)

2011 2012 2013 2014 2015 2016

44 45 Annual Report 2016

6.1.2 Licenses for providing for infrastructure telecom to obtain a license for digital issued to Infrastructure ICT services of the Carrier Service satellite broadband services companies that are listed on authorization services in the companies Provider (CSP) the Saudi Stock Market Kingdom of Saudi Arabia

CITC has issued the Unified CITC has published an application Pursuant to the Royal Decree dated The first Carrier Service Provider CITC has introduced a new license License for infrastructure telecom for licensing digital authorization H, which allows for the (CSP) license has been issued to for providing satellite broadband companies that are listed on the services in the Kingdom. This 30renewal/12/1437 of licenses issued to ICT Dhawiyat Telecom Company, a services in the Kingdom. The scope Saudi Stock Market. Such license document is an electronic data companies that have infrastructure, service that allows public entities, of services that can be provided has allows infrastructure service system designed to work either are licensed to work in the Kingdom such as electricity, water and been limited to the following: Data providers to provide a wide range of independently or in association with and are listed on the Saudi Stock railways that own telecom facilities services, voice calls and satellite fixed, mobile, data services and other another electronic data system, to Market, for an additional 15 years (fiber optic cables and towers) in all broadband added values. licensed services and networks create a digital signature, digitally from their current expiration parts of the Kingdom, to lease the 6.1.3 Issuing the unified license under one license umbrella. verify the identity of users and date. Such renewal will be issued surplus of such facilities to other 6.1.4 Publishing an application approved electronic transactions after these companies meet CITC infrastructure telecom companies and detect any modifications to requirements and promise to pay licensed by CITC to provide fixed digital transactions. Bids have been 5% of their annual net profits during and mobile telecom services in the received, assessed, and sent to the renewal period, in addition Kingdom. companies qualified for having this to the other financial allocations license. based on previous licenses. CITC 6.1.5 Renewal of the licenses has renewed licenses for Etihad Etisalat Co. (Mobily) and MTC Saudi Arabia (Zain). 6.1.6 Providing licensing for 46 47 Annual Report 2016

Total number of registered domains in the kingdom (cumulative)

50,000 46,904

45,000 42,098 6.1.8 Licenses and accreditation of ICT devices 2,965 10,286 40,000 37,547 CITC created technical standards Accreditation Device licenses 35,000 33,508 for ICT devices, delineated applications 29,941 accreditation procedures for 30,000 devices and issued electronic 26,725 customs clearance permits. 25,000 During this year, the following was 8,167 85 21,599 achieved: Permit Studies of 17,621 20,000 applications Confiscated ICT 15,075 devices 15,000 12,465 10,228 10,000 7,153 8,586 5,974 3,798 4,899 Licenses and accreditation of ICT devices 5,000 218 1,347 2,817 1 9 33

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 18,500 18,346 18,439 18,453

Saudi Network Information Center (SaudiNIC) 11,194 • Registration of around 4,806 • Publication of an international CITC registers, through the Saudi 8,757 Network Information Center, Saudi Saudi domain names in the document for describing Kingdom, bringing the total letters and characters and and .sa) 5,826 الســعودية.) domain names on the Internet, and manages and number of registered domains their similarities, along with accredits a number of important to around 46,904. This figure regulation of rules regarding 2,600 2,965 represents the total cumulative Arabic domain names under the 2,316 2,055 additions to services provided 973 .(الســعودية.) to users. This is done through number of registered domains upper Arabic Saudi e-services gate, which enables in the Kingdom. This is a continuation of support users to carry out a number of • Activation of the Secure Domain for the Arabic language on the Names Service Protocol Internet and an effort to maintain different tasks and procedures by 2010 2012 2013 2014 2015 2016 themselves in a fast and flexible (DNSSEC) for the system of Saudi Arabia as a leader in this way. During this year, the following Saudi domain names under the field. SaudiNIC is the first center customs permits and licenses Accreditation application to publish a document in the .(الســعودية.) activities are registered: Arabic Saudi domain new format.

48 49 Annual Report 2016

6.2 User Protection Number of complaints Classification of complaints by type 77,248 40,0% 6.2.1 Addressing users complaints 35,0%

CITC seeks to protect ICT service users and their 51,094 32,0% rights and to receive their complaints. It also spares 25,8% no effort in studying and analyzing complaints, 24,0% especially the cause of repeated complaints. Having done this, CITC tries to find dramatic solutions that will 31,656 16,0% prevent repeated complaints in the future. General 10,0% details and statistics about users complaints: 7.1% 7.2% 20,976 8,0% 4,1% 5,9% 3.1% 1.1% 0.3% 0.4% 0,0% Disturbance Inclusion of Non- Transfer or Non- Providing Non- Decline in Non- Objection to Objection to Subscriber’s provision non-transfer compliance adding or provision service level implementation suspension invoices and Name in of invoice of Number of user modifying or non- or disconnec- of user’s or financial 2013 2014 2015 2016 Simah details information services\ activation tion request to cancellation obligations confidentiality numbers of service cancel or of a service without user suspend a request service temporarily

77,248 Assessment of complainant satisfaction Complaints from ICT Prepaid regarding the addressing of complaints services users mobile 17% Clarification of the Complaintsubmission Timeliness of complaint method 86% treatment 41% Internet Landline (fixed) Complaint follow-up 12% 16% methods 53% Complaint application access 88% Results of the treatment of complaints 39% Overall satisfaction 65% Postpaid Internet mobile (mobile) Simplification of the 41% 14% complaint application form 85%

50 51 Annual Report 2016

6.2.2 Resolution of Telecom Act violations

Clause 38 / 5 the Telecomm- Violations of telecom act committee Violation fines till the end of unications Act stipulates 2,321 2016 (SAR) that activities that violate 2,047 the law be considered by a 1,984 committee nominated by a Board resolution. 1,494 1,218 1,079 1,055 997 841 919 731 8,897,340 374 Violations paid till the end of 2016

2011 2012 2013 2014 2015 2016

Total number of resolutions issued Total number of incoming violations

Resolutions issued by the Committee 39,694,480 Due unpaid violations till the end of 2016 75% 8% 1% Cable cuts Non-implementation Others of the CITC resolution

11% 5% Using wireless Non-legitimate devices prepaid

52 53 Annual Report 2016

6.2.3 Number portability 6.2.4 Internet filtering

CITC ensures continuity of Mobile Number Portability • 2500 daily filtering requests were With a rise Services by monitoring the central system of the dealt with through the Electronic amounting to Number Portability Clearinghouse (NPC), verifying System for National Filtering service 31% proper implementation of MNP procedures by the this year. than 2015 operators resolving user complaints, and looking for • CITC actively supports efforts means to improve the service. This has resulted in more to combat pornographic and than 1,000,000 portability transfers between service child-abuse cybercrimes and With a rise providers this year. technological crimes by blocking amounting to child-abuse materials and regularly 113% than 2014 reporting to security authorities and concerned international organizations. The total number of One million numbers child-abuse links reported in 2016 has reached more than 1300. have been transferred between • In the interest of protecting children Blocking service providers this year and adolescents from dangers of the internet and emphasizing the role The total 938,365 of family in minimizing exposure 1,000,000 to harmful internet content, CITC is Blocked 524,021 56% working on the first draft of parental Numbers in thousands control tools for internet users in Classifying 700 the Kingdom. CITC is also working in parallel with service providers Pornographic 384,429 92.3% 539 to reactivate Safe Search on the main search engines. Activation is Others 31,939 7.7% 244 expected during the first quarter of 2017. Unblocking 44 24 • The advantages of these efforts are: Continued inaccessibility to open Total 8,387 pornographic domains in search engines, a noticeable decrease in Accepted 591 7% 2011 2012 2013 2014 2015 2016 pornographic search results on Refused 7,796 93% the main social media websites and a decrease in the number of pornographic applications in various smart phones stores.

54 55 Annual Report 2016

6.2.5 The National Center for Information Security

The Center aims to raise the level of awareness of dangers related to the use of electronic transactions as well as the level of confidence in information security and digital safety resulting from collaboration with members and partners of the Center, which has provided training and education on the subject. To this end, the Center has achieved the following during 2016: 40 40 Warning messages have been Government bodies have been sent to all government sectors registered in the Guide for about the spread of special Information Security Policies viruses that target ICT and Procedure service. infrastructures in the Kingdom. Statistics of the National Center for Information Security

4,964 623 2,112 Pages on the national website Procedures for information 3,538 have been distorted. Early warning security have been prepared and has been provided in order for executed for different entities. technical support to restore it and terminate exploits used for 1,651 distortion. 890

325 149 289 214 223 247 22 4,964 Violators of the Anti-Cyber Crime Warning reports have been sent Law have been removed from to parties whose information is 2012 2013 2014 2015 2016 social media websites. registered with the Early Warning Service and the Risk Number of centers registered with the Center Number of sent reports or special warnings Management System.

56 57 Annual Report 2016

6.2.6 Measurement of electromagnetic radiation Sites have been measured and tested for conformance in the different areas The objective of this project recommended by the World Health workers using wireless telecom and cities of the Kingdom since the first project that was field measured and is to monitor conformance of Organization and the International devices. This project was part of tested for conformance in 2007. None of the sites have been found in violation of service providers with national Telecommunication Union and are a cooperation program of leading the CITC approved regulations with regard to harmful radiation emitted from regulations approved by CITC enacted in order to limit human academic and research institutions 4,300 wireless base stations. regarding human exposure to exposure to electromagnetic in the Kingdom. In this regard, the electromagnetic radiation. These radiation emitted from wireless base following was accomplished during national regulations are based on stations and to provide protection 2016: internationally practiced standards against any negative effects on

Taibah University Al-Imam University KFUPM Umm Al-Qura University

ﻣﻮﻗﻊ location 166 location 161 location 194 102 The third group within the Completion of measuring The fifth and sixth groups Completion of measuring ninth phase of the project, and testing for within the eighth phase of and testing for which represents the conformance of the third the project, which conformance of the fourth measuring and testing for and last group within the represents measuring and and last group within the conformance of 102 sites in sixth phase of the project, testing for conformance at seventh phase of the the areas of Makkah, which represents 166 161 sites in the Eastern project, which represents Medinah,Tabuk-Al-Jouf, and sites in the Riyadh and Province, Najran, Jazan 194 sites in Makkah and the Northern Borders was Qassim provinces and Asir was completed. Al-Baha completed.

58 59 Annual Report 2016

6.3 Regulating ICT sector Wholesale price ceiling Retail price ceiling

Local calls inside 6.3.1 Regulating prices of 6.3.2 Identifying price ceiling the roaming country 0.713 Riyals 0.975 Riyals national wholesale local voice for international mobile service call termination on fixed and between GCC mobile networks The Ministerial Committee for Based on the results of comparative Post, Telecommunication and studies conducted by CITC and an Information Technology in each of International calls to examination of the best international the GCC countries has approved the any other GCC country 1.763 Riyals 2.4 Riyals practices in regard to organizing the mobile international roaming price prices of wholesale local voice call ceiling for GCC countries, which termination on fixed and mobile is the result of the efforts of the networks , CITC has approved the Roaming GCC team; price ceilings following: for the following telecom services Receiving calls during have been applied: roaming inside GCC • The price ceiling for wholesale countries - 1.313 Riyals local voice-call termination on 1. Local calls inside roaming mobile telecom networks is 10 countries. halalas, symmetrically. 2. International calls to any other • The price ceiling for wholesale GCC country. local voice-call termination on 3. Receiving calls during roaming fixed telecom networks is 4.50 in GCC countries. SMS sent during roaming halalas, symmetrically. 4. SMS sent during roaming. 0.15 Riyals 0.30 Riyals 5. Data service during roaming in These prices were applied by service GCC countries. providers starting on 7 / 7 / 1437 H (corresponding to 15/ Apr/2016 ). On 1/Apr/2016 , price ceilings were set for wholesale calls for these services. On1/ Apr/2016 ,retail price Data service during ceilings for the same services were roaming in GCC applied. It is worth noting that this is countries 3.0 Riyals 4.875 Riyals the first out of five phases involving the lowering of price ceilings. The second phase of reducing wholesale price ceilings for these services will be initiated, followed by applying reduction of retail price ceilings in 2017.

60 61 Annual Report 2016

Number of promotional offers

324 6.3.3 Promotional offers by ICT service providers 250 248 During 2016, about 324 promotional offers were launched by all service 154 providers. 136

6.3.5 Linking interconnection 6.3.6 Procedures for approval communication and rules of of ICT tariffs access to physical facilities 2012 2013 2014 2015 2016 Rules of interconnection pave the Aiming to organize the ICT sector Percentage of institutions that rely on cloud computing systems way to linking telecom services and keep abreast of the latest in all of their transactions between service providers such as technologies, CITC has studied the a linking voice, SMS, or a data and creation of a new mechanism for 80% internet connection, among other accreditation of ICT service tariffs 17% 73% 70% 68% services. The objective of such based on the best international 64% 63% 6.3.4 Cloud computing 64% connections is to enable subscribers practices, international comparative 60% 75% of one service provider to connect studies and advancements in the 51% 53% The Cloud Computing Project 50% with subscribers of another service ICT market in the Kingdom. The aims to provide an organizational provider. objective of such studies is to 40% 36% environment for all providers and 32% The rules of access to physical achieve better performance rates 29% facilities provide the basis for to respond to the current telecom users of cloud computing. During 30% this year, CITC has prepared a draft 21% accessing services requiring market in the Kingdom and to of organizational frameworks, met 20% 14% the physical existence (ICT provide the best regulating means 13% Expectations on cloud computing services with national and international will be more dependent after 2020 infrastructure) of parts of another and procedures for assessing tariffs 10% 6% concerned parties and delivered 4% service provider’s network, such as on retail telecom services. 0% this draft to the public, eliciting 0% sharing telecommunication towers their feedback. It is expected that 2015 *2017 *2020 *2022 *2025 *2026 and shared drilling. During this year, CITC Board Medium Institutions: From of Directors has approved and ١ to ٥ Companies: More than thousand employees ٥ regulations and guidelines will be thousand employees Small institutions: Less than Expectations * CITC has created and approved implemented an organizational ١ issued in the first quarter of 2017. thousand employees interconnection rules and rules structure for approving tariffs that of access to physical facilities to will ensure fair competition in the be implemented by ICT service ICT market and protect users. providers in order to improve telecom services and subscribers’ experience with telecom services. 62 63 Annual Report 2016

6.4 Scarce resources

6.4.1 Frequency management 6.4.2 National Numbering Plan Unified short message codes and monitoring implementation and its Management for humanitarian and (41) government organizations The National Frequency Spectrum CITC monitors applications to Plan (NFP) was approved by the Clearance by end of this year: identify, study and allocate available Council of Ministers Resolution No. 61 digital resources according the Short access codes which are Frequencies to be vacated within two years from date of implementation procedures included in the National dated ( 10/Mar/2016 ) 2 / 3 / 1429 H. used by operators, government The NFP defines user categories Numbering Plan. It also monitors bodies and other organizations and the allocation of frequency Assignment level The Kingdom Province-wide City-wide Specific location allocation applications to ensure optimal use of all allocated digital (4) bands for different services Clearance by end of 2016 45.50% 29% 97.49% %9٨.٧٤ according the needs of frequency resources in terms of activating Clearance by end of 2015 45.41% 28.95% 97.49% 98.74% users in the Kingdom and in line such resources on the ICT service providers networks. In 2016, the with international guidelines for Triple access code (911) for frequency uses. The NFP went into following was achieved: running the Unified Operation effect on 2 / 5 / 1429 H in accordance Center for Emergency, Public with phases defined in the Plan (two, Frequencies to be vacated within three years from date of implementation Million numbers to Security and Civil Defense three and five-year time phases) as data mobile phone (911) services of this date. Assignment level The Kingdom Province-wide City-wide Specific location 6 Clearance by end of 2016 0.87% 92% 27.82% 15% Allocations Clearance by end of 2015 0.87% 91.65% 27.82% 14.83%

Million numbers for calling from machine Frequencies to be vacated within five years from date of implementation 2,5 to machine (M2M) Assignment level The Kingdom Province-wide City-wide Specific location

Clearance by end of 2016 15.90% 23.63% 21.04% 19.24% Clearance by end of 2015 15.80% 23.63% 21.04% 19.24% Thousand geographic 30 calling numbers

64 65 Annual Report 2016 6.5 Universal Service Fund (USF) and deployment of ICT services 261Localities Project number 4 Continuing its efforts to achieve the This project covered the governorates of Almajma’ah and Ramah in the Riaydh administrative province in addition to the objectives of the universal service governorates of Alkhafji, Hafr Albatin and Qariyat Aloliya in the and universal access policy and 483Localities Project number 1 Eastern Region. The total number of localities covered by the implement a strategic plan within scope of this project were 261 with a population of around 94,000. the approved time frame, the USF Pilot: The main goal of this project is to provide prepared operating plans containing voice and Internet service to all localities not already served in the Kholis and Alkamel the main objectives, programs and 446 Localities governorates in Makkah district and the Almahd Project number 5 projects for each operating year. governorate in Madinah district, where the total The plans identify the structures, number of localities is 483, with a population of This project covered 446 localities containing around implementation methods and styles around 105,000. 165,000 people in one governorate in Tabouk of the projects, clarifying the USF Province (Tayma) and six governorates in Hail Province (Alshinan, Baqa, Hail, Alshamli, and program outputs in general, defining Mouqeq). the scope of work, and estimating 563 project costs for programs and Localities projects of USF that are going to be Project number 2 This project included eleven governorates 457Localities supported. In this context the USF Project number 6 ended the implementation of eight representing the governorates of the Northern This project covered 457 localities with a population of projects before the end of 2016, and Borders administrative district, which include Arar, Rafhaa, Tarif, and Aluwayqilah, and all governorates around 120,000 in all governorates in the Najran three projects have been finalized of the Aljouf district, which include Alqirayat, Domat Province (Alkharkhir, Badr Aljanoub, Hubuna, Khabash, (9, 10 and 11) during this year. By Aljandal, Sikaka and Tabrjal, in addition to the Najran, Sharurah, Thar and Yadmah). the end of 2016, 17,736 localities governorates of Al-Dair, AlRaith and Aldarb in the will have been served throughout Jazan district, where the number of localities covered all districts and governorates by the scope of this project were 563 with population kingdomwide. The total number of of around 206,000. 2,191 Localities completed projects is 11 out of 14. Project number 7 This project covers 2,191 localities with a combined population around 705,000 from all governorates in the Qassim Province (Buraydah, Unaizah, Arras, Almidhnab, Albukayriyah, Albadai, Alasiyah, 2,325 Annabhaniyah, Uyun Aljiwa, Riyadh Alkhabra, Localities Project number 3 Ashimasiyah, Uqlat Alsoqour and Dheryah) and all governorates in the Riyadh Province (Alzulfi, Shaqra, This project covered governorates in the Makkah Thadiq, Alghat, Alduwadimi, Afif, Alquwayiyah, administrative region (Alqunfudhah and Alaradiat) and Riyadh, Huraymila, Duruma, Addiriyah and Marat). governorates in the Aseer administrative region (Alnamas, Balqarn, and Bishah) in addition to all governorates in the 1,936 Al-Baha district (Alaqiq, Albaha, Almandaq, Almukhwah, Localities Alqura, Baljurashi, Qalawa, Bani Hasan, Far’at Ghamid Project number 8 Alzinad and Alhujra). The total number of localities covered This project covers 1,936 localities with by the scope of this project were 2,325 with a population of around 325,000 people from the governorates around 653,000. of Makkah Province (Alkhurmah, Taif, Ranyah, Turbah, Almouyah and Misan). 66 67 Annual Report 2016

Figure 1 shows the governorates Figure 2 shows the governorates that were served as part of the first that were served as part of the eight projects, and they are: annual fifth operational plan, and they are: Tabouk

Madinah Al-Jouf

Northern Borders

Eastern Hail Region

Medinah

Aseer Figure 2: Areas affected Makkah Projects by the implementation of Jazan the fifth operational plan Province boundaries (projects 9, 10 and 11)

Aseer Al-Baha

Najran

Jazan Project number 9: Project number 10: Project number 11: Implemented Projects This project covers 1,933 localities This project covers 6,535 localities The project covers 606 localities containing around 345,000 people with a population of 1,255,000 in the with a population of 142,000 in the Province Boundaries in the governorates of Madinah governorates of Aseer Province (Abha, governorates of Tabouk Province Province (Alhinakiyah, Madinah, Almajardah, Mahayil, Rijal Alma, Sarat (Alwajh, Umluj, Diba, Haqil, Tabouk Bader, Khayber, Yanbu, Wadi Alferae Abidah, Albark, Bareq, and Tannoumah) and Albedea) and one governorate in Figure 1: Areas of completed projects and Aleise) and three governorates and the governorates of Jazan Province Madinah (Alula). in Hail Province (Alghazalah, Alhaet, (Alidabi, Baysh, Jazan, Sabya, Abu The project was completed by the end and Alselaimee). The project was Arish, Ahad Ahmusarihah, Alaridah, of last year. completed by the end of last year. Alharth, Dhamad, Farasan, Samtah, Altewal, Horoub and Fifa). The project was completed by the end of last year. 68 69 Annual Report 2016

Turaif (Figure 3): Areas of implementation of the sixth (Figure 3) shows the governorates to Al- operational plan (Projects 12, 13 and 14) be served as part of the sixth annual Quraiat Arar operational plan, and they are: (Figure 4): Project No. 1 - Wireless broadband projects Tabarjal Sekaka Project number 12 Al-Jouf This project covers 1,867 localities Northern Rafha containing more than 250,000 people Borders Daomat in the governorates of the Makkah Hafr Al-Jandal Province (Aljamjoum, Allayth, Jeddah, Al-Batin

Makkah, Rabigh, Bahrah and Adhum). Al-Khafji Documents of the competition were Qaryat prepared and put up; bids were Al-Olya received, analyzed and evaluated and recommendations were submitted Rumah to concerned authorities for final approval. Al- Majma’ah Riyadh Makkah Eastern Region Projects

Province boundaries

Aseer

Project No. 13: Projects 6.6 High-speed wireless The project covers 421 localities Province boundaries with a population of more than broadband projects for Project No. 14: 162,000 in the governorates of Baqiq, remote areas The project covers 1,612 localities with a population Alahsa, Dammam, Jubail, Alkhobar, One of the initiatives of the for wireless broadband project no. Alkhafji, Hafr Albatin and Qariyat of 387,000 in the governorates of Ahad Rofaida, Alnaeryah, Alqateef, Ras Tanourah, Transformation Program 2020 is 1 has been completed. This project Aloliya in the Eastern administrative Dhahran Aljanoub, Khamis Mushait, Tathleeth, and Aladeed in the Eastern Province. “expansion of the scope of USF covers the governorates of Alqurayat, district as shown in figure 4. The Tareeb in Aseer Province, and the governorates of Documents of the competition were investment in broadband for remote Domat Aljandal, Sikaka and Tabrja total number of targeted localities is Wadi Aldawaser, Alaflaj, Alsulayel, Alkharj,Hawtet bani prepared and put up; bids were areas.” in the Aljouf administrative district; 129 with a total of 125,232 houses. Tamim, Almuzahmiyah, and Alhareeq in the Riyadh received, analyzed and evaluated and The target of this initiative is to the governorates of Aluwayqilah, Documents of the competition were Province.Documents of the competition were prepared recommendations were submitted increase the coverage of wireless Rafhaa, Tarif and Arar in the Northern prepared and put up; and it is expected and put up; bids were received, analyzed and evaluated to concerned authorities for final broadband networks (more than Borders administrative district; the that the project will be awarded and and recommendations were submitted to concerned approval. 10 gigabytes per second) in remote governorates of Almajma’ah and initiated during the first quarter of authorities for final approval. areas in order to cover 70% of houses. Ramah in the Riyadh administrative 2017. During this year, the scope of work district; and the governorates of

70 71 Achievements07 and International Participation

72 73 Annual Report 2016

7.1 United Nations Broadband 7.2 CITC participates in the Commission for Sustainable Commission on Science and 7. Achievements and Development. Technology for Development International Participation (CSTD). The Governor is a member of the the CITC works on developing and Network of Regulatory Commissions United Nations Broadband Commission The Kingdom has joined, for the second protecting the interests of the of Telecommunications and for Sustainable Development. time, the Commission on Science Kingdom at the international arena Information Technology. The role of the Commission is to and Technology for Development for related to ICT, with the objective Moreover, the Kingdom holds promulgate the importance of the period 2017 - 2020 The United of increasing cooperation and several posts, either as president or broadband on the international level Nations Economic and Social Council exchanging information and vice president, of several meetings and to promote it in all countries as a tool (ECOSOC) recommended the Kingdom experiences. In this context, CITC and at conferences of regional and for advancing national and international for this membership. CSTD prepares participates in a number of regional international organizations. The development and improving delivery of resolutions concerning science, and international ICT-related Kingdom also has provided several ICT services to remote areas. technology and innovations for organizations. contributions to these organizations, Delivery of such services should be development purposes, and it assesses Among the most prominent and tries hard to reach a consensus performed in an innovative way, and implementation and monitors outputs organizations are the ITU, with all partners, in an effort to countries should be encouraged to of the World Summit on the Information specialized committees of the achieve shared objectives. adopt national policies for broadband Society. The Kingdom has also actively United Nations Economic and Social and digital programs. participated in the proceedings of Council, the League of Arab States, the nineteenth annual session of Achievements07 the Cooperation Council for the the Commission by contributing to and International Arab States of the Gulf and the Arab the drafting and approval of these Participation resolutions.

74 75 Annual Report 2016 7.4 The Kingdom contributes to the creation of a specialized study committee in the Internet of Things (IOT) and smart cities.

The Kingdom has taken the lead in negotiations and coordination with several countries to create a specialized study committee on the Internet of Things (IOT) and smart cities. This technological trend is expected to make a considerable change in all walks of life, especially in the financial and industrial fields. These efforts have led to the creation of a committee named “Internet of Things and Smart Cities”. The Kingdom serves as the committee’s vice president. The committee is highly esteemed by The Committee approved nominees from the Kingdom for the several countries as well as the private post of vice president in the following study committees: sector. 7.3 The Kingdom was granted authorization to run one of the DNS records. 7.5 The Kingdom related Study committee for the to ICT a leading role in the operational aspects of Study committee for future providing ICT services World Telecommunication networks, including mobile Standardization Assembly 2016. and next-generation networks On the fifth of June 2016, the of digital objects is considered an Key Infrastructure (PKI) system. It Study committee for the Kingdom, represented by CITC, advanced platform for managing also conforms to current systems, infrastructure of fiber became the fifth official responsible information in a safe and stable including the domain names The Kingdom served as the vice president Study committee for the transmission and access for running DNS records, besides way on the electronic web, which system, and has an open standard, of the World Telecommunication Internet of Things and smart networks the other main officials in the world guarantees digital infrastructure which means that executors are not Standardization Assembly in 2016 and cities and communities who are situated in countries such dominance instead of reliance obligated to use a specific resource. the president of the Arab team concerned as the United States of America, on another country, which is the These factors result in decreased with restructuring study committees in the Germany, China and South Africa. current situation. costs and facilitate the introduction standardization sector of the International Given the enormous investments in Some experts argue that this is a of new technologies. Telecommunication Union. The Kingdom the ICT infrastructure in the Kingdom second version of the internet that Architecture of Digital Objects has made a number of contributions that and the importance of in-country is available nowadays. Architecture also enables the interoperability of were approved by the Assembly. Some servers to run its digital address of Digital Objects is built on an different databases. It is expected of these include contributions regarding records, the Kingdom has sought to open source program and has that Architecture of Digital Objects ICT policies; internet related regulations; be one of the countries responsible highly-secured capabilities since will play a major role in enabling enhancement of efforts on open sources for running DNS records, which is it is secured from the ground up mega data and deploying the in the standardization sector; and issues the main component of the digital (Secure-by-design), including the Internet of Things, smart cities, and related to privacy, security and trust with object architecture. Architecture fact that it is based on the Public other current technological trends. ICT use

76 77 08Media Activities

78 79 8. Media Activities Annual Report 2016

8.1 Awareness-raising Campaign for protecting children from 8.2 Statistics of some media activities the dangers of the internet. CITC has launched a national initiative themes intended to ensure the for protecting children from the physical and psychological safety, dangers of the internet in cooperation identity protection, and reputation with the Ministry of Education. The of children. They include ways to objective of this initiative is to raise avoid sexual harassment, improper the awareness level of the dangers content, extortion and bullying. These of the internet, especially since campaigns will also help children the recent emergence of several protect their personal information technological means that draw from misuse, fraud or swindling. attention to fashion and encourage They also protect children’s PCs from improper behavior in children. These malware and encourage children to 1,025 Media materials campaigns focus on awareness- respect other people and to protect published in traditional raising, educational and interactive the reputation, intellectual property and electronic media and copyrights of others. A number of media channels are cooperating with the awareness-raising campaign. They have created a special website using social media applications; produced a number of short animation videos in Arabic; held exhibitions in malls in the main cities of the Kingdom; and 1,378Media materials produced awareness-raising programs for schools, which include educational and recreational packages. published on social media channels These campaigns aim to: 40 Media materials as compared with published materials and their Media Strategy presence in media outlets (2016 - 2020) Provide children Increase children’s Warn children of the with the necessary awareness of the effects of misuse of skills for ensuring advantages of using the internet on their optimal use of ICT the internet their physical safety

08Media 11,726 Activities Number of interactive 14,498 Total number of Develop teachers’ Make the public aware of the responses of users with role of legislative and 4 published media skills to enable them CITC account Number of materials to help students use organizational bodies in (CITC_withU) electronic protecting children from the the internet safely and message technological and legal aspects responsibly issues 80 of internet use 81 09 Studies

82 83 Annual Report 2016

9. Studies Sample of ICT market report 2016 Satisfaction of landline service 9.1 ICT market study in the Kingdom 5 Very satisfied

CITC annually conducts studies of and the level of satisfaction 3.93 the ICT market in the Kingdom that with the quality and prices of 4 3.84 3.78 Satisfied include survey studies of available service providers. In conducting services, and users’ behavior and these surveys, CITC considers customs in using these services current market trends and future 3 Neutral and their level of satisfaction. These expectations, including results studies also include quantitative of previous studies conducted and qualitative analyses of the to establish the chronological 2 Dissatisfied development and support of these development of ICT uses and services, the extent of use and services. 1 deployment of these technologies Very dissatisfied 2014 2015 2016

09 Studies

84 85 Annual Report 2016

General satisfaction with the speed and response of the internet via mobile telecom networks Time spent on the internet (percentage of active use by internet users)

5 Very cheap 58% 2016 46% 4 cheap 56% 3.65 3.53 2015 3.28 54% 44% CITC is working on the final 2014

3 42% Acceptable analytical reviews of 2016 along with recommendations in Arabic and English. Reports will be published in 2 Expensive 2017.

1 Very Expensive 2014 2015 2016

Less than More than hours a day 4 hours a day 4

General satisfaction with the speed and response of the internet via mobile telecom networks

5 Very cheap

4 Cheap 3.65 3.28 3.53

3 Acceptable

2 Expensive

1 Very Expensive 2014 2015 2016

86 87 Indicators10 of the ICT sector in the Kingdom

88 89 Annual Report 2016 10. Indicators of the ICT sector in the Kingdom 10.2 Landline Telecom 10.1 Mobile telecom services Services Milloin Million 3,65 Number of active landlines The number of mobile telecom service 47,9 Number of subscriptions The number of fixed active landlines by the end of 2016 subscriptions had reached, by the to mobile telecom services had reached, by the end of 2016, about end of 2016, about 47.9 million, the by the end of 2016 3.65 million; 1.9 million, or 52%, of overwhelming majority of which are which are for residential landlines. pre-paid subscriptions constituting Accordingly, the percentage of the a percentage that exceeds 82%. deployment of landlines is about The percentage of mobile telecom 151% 11.5% of the population and 32.3% service subscriptions compared Percentage of deployment of residential units. Cancellation of with the population decreased to of mobile telecom services 82% landline service in favor of mobile about 151% as a result of acting on compared to population Pre-paid telecom services has resulted in some resolutions and implementing subscription percentage a decrease in the number of fixed 32.3% 11.5 regulations such as linking SIMs with voice telecom subscriptions. Percentage of deployament Percentage of fixed phone fingerprints and cancelling inactive to residential units deployment per capita SIMs. As a result of CITC approval of the virtual operator for mobile Total number of subscriptions in fixed telecom services phone networks, service levels have 67.6% improved and become more diverse. 64.3% The telecom market has expanded, 5 69.3% giving subscribers more options. Total number of subscriptions in mobile telecom services 34.0% 32.3% 60 1.44 45.0% 4 1.42 55 1.34 188% 181.6% 171.4% 169.7% 167.5% 1.7٥ 1.80 50 3 1.09 45 3.3 3.4 3.3 151.0% 40 53.01 2.5 53.71 50.89 52.80 2 ٥٢.74 35 47.93 2.0 1.9 30 ( Number of lines (Million 25 1 47.1 45.7 43.9 45.9 44.9 39.1 11.5٪ 11.9٪ 11.8٪ 15.7٪ 16.4٪ 16.2٪ 20

15

Number of subscriptions (Million 0 ( 6.8 7.9 8.8 10 2011 2012 2013 2014 2015 2016 6.6 7.3 6.9 5 Percentage of deployment Percentage of deployment Commercial lines Residential lines to residential units to population 0 2011 2012 2013 2014 2015 2016 Note: The percentage of deployment to population is calculated by dividing the total number of active landlines by the population; whereas the percentage of deployment to residential units is Percentage of deployment Total number of subscriptions Pre-paid subscriptions Post-paid subscriptions to population (%) calculated by dividing the number of residential lines by the number of residential units. 90 91 Annual Report 2016

10.3 Broadband services 10.3.2 Broadband services via mobile Number of subscriptions telecom networks 10.3.1 Broadband services via to broadband services via 3,29 fixed telecom networks fixed landlines The total number of subscriptions to broadband 75.2% Million services via mobile telecom networks, in Percentage of deployment The number of subscriptions its broad definition, had decreased to about of broadband services via for broadband services via fixed 23.9 million subscribers by the end of 2016 mobile telecom networks to population telecom networks, which includes as a result of the linking of mobile phone Digital Subscriber Line (DSL), fixed numbers and data packages to personal wireless connections, fiber optics fingerprints. These subscriptions include data and other wireless lines, had reached 46.8% service SIMs and integrated voice telecom 23,9 about 3.29 million by the end of Percentage of deployment packages (voice and internet). Accordingly, the Million to residential units 2016, representing about 46.8% percentage of the deployment of broadband Total subscriptions to deployment to residential units. services via mobile telecom networks is about broadband services via 75.2% per capita. More decrease in the total mobile networks number of subscriptions is expected due to the implementation of the fingerprint system. Total number of subscriptions in the broadband services via fixed telecom networks 40 Total number of subscriptions in the broadband 3.56 services via mobile telecom networks 3.5 105.9% 50.7% 3.29 40 45.5% 30,3 3.0 40.9% 46.8% 3.5 94.5% 33.4 43.2% 2,92 75.2% 3.0 2,54 29.1 2.5 32,9% 23.9 1.5 1.1 2.5 20.19 2.0 1.95 1.2 0.8 47.6% 19.96 0.6 2.0 42.1% 11.17 0.3 1.5 39.6% 1.5 14.3 12.3 13.20 1.85 1.38 1.57 1.62 12.71

( Number of subscriptions (Million 1.0 1.87 11.3 9.68 1.56 1.0 8.07 9.13 Number of subscriptions (Million) Number of subscriptions (Million) 7.06 0.5 0.58 0.5 0.45 4.59 0.43 4.28 4.22 0,0 0,0 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016

DSL Fiber optics and other wireless lines Fixed wireless connections Total number of services in integrated telecom services Total number of subscriptions in data services

Total number of broadband subscriptions Percentage of deployment to residential units (%) Total number of broadband subscriptions Percentage of deployment to residential units (%) via mobile telecom networks via fixed telecom networks 92 93 Annual Report 2016

Internet spread percentage 10.4 Internet services Telecom companies revenues from their operations in the Kingdom by the end of 2016 Billion The percentage of deployment of 71,6 the internet has soared from 47% in 2011 to about 74.9% by the end of 2016. The number of current internet users in the Kingdom is estimated to be 24 million. Due to increased use Incresed from 47% of social media channels, content in 2011 to about channels (like YouTube and Snapchat) and internet-based games, demand for internet and broadband services has risen. Consequently, the amount 74.9% -1.1% 75% 25% of data use has risen significantly in By the end of 2016 Less than the previous Represents mobile Represents fixed and recent years. year 2015 telecom services revenues data telecom services

Revenues of telecom service providers (Billion Riyals) 100 Total number of internet users 90 74.88% 10.5 Revenue 68.5% 71.03 71.31 20 63.7% 80 72.40 71.63 65.76 18 Telecom companies achieved 54.1% 55.1% about 71,6 billion Saudi 70 60.61 60.10 16 riyals in total direct revenue 47.5% from operations in Saudi 60 14 54.3 53.7 Arabia by the end of 2016, 50 12 1,1% less than 2015. Mobile 53 53

(Billion) 48 45 49 10 communication service 40

(Million) revenues represent 75% 8 14 16 17 20 22 24 of total revenues, whereas, 30 6 fixed communication service 17.76 17.83 17.91 revenues represent around 20 18.10 4 16.44 15.15 25%. 12.01 2 10 0 0 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016

Spread percentage Number of users Total number of revenues Mobile Fixed telecom and data in Kingdom markets telecommunications

94 95 Annual Report 2016 Capacity of the International Internet Connectivity 3185 3200 10.7.2 Spending in ICT sector 10.6 Capacity of International 3000 2800 Internet Connectivity CITC has conducted an analytical result of the reliance of business information security will become 2600 study to estimate the volume of in all parts of the Kingdom on an essential component of digital 2400 The total capacities of the spending on ICT services in the digital transformation initiatives transformation strategies in the 2200 International Internet Connectivity Kingdom. The study includes ICT in order to minimize costs and Kingdom. Moreover, there has been 2000 for 2016 has risen to 114% or about services, hardware and software. enhance work efficiency. It is a rise in the number of businesses 1800 1484 3185 gigabytes/ sec as compared The volume of spending on ICT in expected that the spending growth that aspire to implement advanced 1600 to 1484 gigabytes/sec in 2015. The 1321 the Kingdom is about 130 billion on ICT services will continue with and proactive information security reason for this rise is the expected 1400 814.2 greater momentum, because Gigabyte\sec riyals in 2016, with a growth rate solutions. increase in demand for internet 1200 556 of about 8.3% over 2015, as a use. In addition, companies have 1000 added parallel capacities to the 800 440 existing capacities as alternative 600 318 The total number of spending on ICT (billion Riyals) options in case of internet cable 400 cuts. 200 130 0 120 2010 2011 2012 2013 2014 2015 2016 111.79 102.56 10.7 Contribution of telecom 10.7.1 Contribution of telecom 94 83.2 activities to the national activities to the GPD 82.5 75 76.8 economy 73 69.84 65.27 The growth in capital investments average annual growth rate was CITC studies estimate the 70 61 contribution of ICT to the GPD 57.8 and the expansion and about 2% during the past six years 33% 46.8 to have been 6% in 2016, on top 60 development of telecom networks (2011 - 2016). Because of the 29% 51.1 52,5 43.2 led to a noticeable increase in the prominent role the ICT sector plays of the rise in the added value of 48 49 41.95 telecom activities during the past 36 37.29 contribution of telecom activities in transforming the Kingdom into a 42 to the GPD. This has attracted thriving economy, the Kingdom has three years. If we neutralize the 33 33.6 24.8 created strategies, implemented petroleum and mining sector as 22.5 investments to this sector and 27 25% 17% 21,9 initiatives and supported programs GPD components, the percentage resulted in escalating growth and a 18 21 14% of contribution of ICT to the non- 14,4 9.1% 8.3% rise in its direct contribution to the that aim to increase access levels 9 4% 10% 9% 7% GPD. In addition, it has had positive to ICT services, enhance revenue, oil GPD, according to studies 3% indirect effects by boosting the add value to this sector and attract conducted by CITC, is estimated to efficiency of other productive more investments and provide be around 10%. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 sectors of the economy. According more job opportunities. All of IT Telecom Total extent Annual growth to studies conducted by CITC, the this should result in a gradual transformation of the economy of the Kingdom.

96 97 11Difficulties and Challenges

98 99 Annual Report 2016

11. Difficulties and Challenges

CITC faces challenges that it seeks to address in order to find appropriate solutions for the future.

These challenges include issues related to implementing the Difficulties11 National Frequency Spectrum Plan, cost of telecom station towers, and positioning of towers in appropriate places, getting needed permits for extending cables, and responding Challenges to ongoing developments related to digital literacy as well as raising the awareness of citizens in this regard.

100 101 Annual Report 2016

11.1 Vacating frequencies that 11.2 Escalating rent prices do not conform to the National of ICT locations of towers, Frequency Spectrum Plan, networks and stations. which is required in order to provide public telecom Some government bodies, such Suggested recommendation: services in the Kingdom Suggested recommendation: as municipalities and airports, have raised rents dramatically 1. Rent prices for ICT towers and for service providers who locate Currently, there are allocated stations on land belonging to Urging government bodies to facilities on their land. Because frequencies for some government government bodies should be quickly vacate frequencies that negotiations with concerned bodies that are located in a certain comparable with the prices do not conform to the National parties in these government frequency spectrum, according to charged in the rest of the highly Frequency Spectrum Plan, bodies has been unsuccessful, the National Frequency Spectrum populated cities of the Kingdom. especially allocated frequencies in CITC has corresponded with the Plan, for providing public telecom 2. Telecom stations and cabins the distributed domains in the Plan King for guidance and suggestions services. Such frequencies should should be designated as public that provide public ICT services. regarding this challenge. be vacated and assigned to CITC facilities and treated like water licensed companies providing and electric facilities are treated public telecom services in order during the land planning phase. to improve service quality and 3. No charges should be imposed develop networks to meet the on boards and signs affixed needs of the telecom market in the to wireless station sites that Kingdom. Work is now underway contain guidelines or warnings to address this challenge as versus promotional or through implementation of one advertising content, for which of the initiatives of the National CITC imposes fees. Transformation Program, namely 4. Municipalities should not “Vacating frequencies that provide remove or close sites that public telecom services through provide ICT services unless completing the implementation of they provide alternate options the National Frequency Spectrum that meet service and coverage Plan.” It is expected that this requirements. challenge will be overcome if the Difficulties11 initiative is implemented during and the specified timeframe in 2020. Challenges

102 103 Annual Report 2016

11.3 Prohibiting the 11.4 Procedures for obtaining establishment of telecom drilling permits for cable towers and stations in extensions and establishing residential areas telecom network facilities Suggested Recommendation: Suggested Recommendation: Current and future telecom Licensed telecom companies face technologies, especially fifth Allowing the establishment of obstacles from municipalities all To present a resolution detailing generation mobile telecom telecom stations and towers, over the Kingdom when trying to compound procedures for technologies, require that telecom or any other telecom devices in obtain drilling permits to establish obtaining permits for drilling and towers be situated close to each residential areas, and including that their networks, expand their establishing telecom facilities in other and be inside residential areas. in the regulations of the Ministry of facilities or extend their cables. Saudi Arabia However, the current regulations Municipal and Rural Affairs. of the Ministry of Municipal and Work is now underway to address Rural Affairs do not allow the this challenge by implementing establishment of telecom towers one of the initiatives of the and stations in residential areas. National Transformation Program, According to MMRA regulations, namely “Creating a partnership some towers and stations, such as arrangement between operators those considered to be commercial and municipalities that will structures, can be situated only facilitate the work of operators.” on commercial streets. CITC has It is expected that this challenge sent correspondence to the King to will be overcome if this initiative is consider sending this issue to the implemented during the specified Bureau of Experts at the Council of timeframe in 2020. Ministers in order to examine the articles that MMRA and CITC have not agreed upon and which relate to updating municipal and technical regulations for licensing wireless telecom commercial devices.

104 105 Appendixes12

106 107 Annual Report 2016 Appendix (A) Resolutions of the Board of Directors

The Board has held eight meetings Approval of the license this year, and has adopted a number of for providing broadband resolutions; the main resolutions were: satellite services

Halalas10

Approval of the final Approval of the budget for the Approval for organizing and account of the CITC and National Committee for lowering the prices of wholesale the National Committee Information Society for the local voice-call termination, both for Information Society fiscal year 1438/ 1439 H (2017) fixed and mobile The ceiling 1436 /1437 H (2015) price for telecom mobile wholesale calls is 10 halalas, whereas the ceiling price for telecom fixed wholesale calls was 4.5 halalas symmetrically for 2016.

Approval of the CITC budget for the fiscal year 1438 /1439 H (2015) Approval of the CITC annual report for the year 2015

Approval of the budget Approval of the CITC of Universal Service organizational structure Fund for the fiscal year 1438 /1439 H (2017)

12 Approval of the CITC strategic plan (2016 - 2020) Appendixes Reformation of the executive committee of the Board of Directors and the executive committee for the Approval of the final account Universal Service Fund of the Universal Service Fund for the fiscal year 1436 /1437 H (2015) 108 109 Annual Report 2016

Appendix B: Frequency Spectrum Management 71 16 Requests Frequencies 709 Institutions were inspected to For coordinating 71 the use of determine whether they had were identified, monitored and dealt frequencies during visits of properly used their allocated with for their impact on coverage officials or international ships frequencies and had observed beyond the borders of the Kingdom when entering the territorial allocation specifications and which originate in neighboring 19,730 waters of the Kingdom. countries. Frequencies were allocated for the use of government bodies, public telecom service providers in 10 the Kingdom, private institutions and companies, and international organizations 120 Requests Persons were tested to follow necessary procedures in the Kingdom for providing private and issued wireless 4,212 required to allocate frequencies telecom services, and to enable licensed amateur licenses. Frequencies between the Kingdom and GCC service providers to offer services to the were identified as countries public. Some of the frequencies were unlicensed uses, which registered with the ITU in order to have caused interference protect them from interference from with licensed frequencies other countries. 9,031 2,868 Frequencies Licenses licensed for use, have been 14,137 were issued and renewed, 294 licenses measured to make sure they Frequency allocations were canceled for maritime wireless systems using 522 conform to allocation conditions due to implementation of the National frequencies for ships and recreational Frequencies Frequency Spectrum Plan or because and fishing boats, 472 amateur wireless unlicensed for use, have been users no longer needed them. licenses, 432 licenses for using amateur identified and reported to wireless frequencies and 1670 licenses concerned authorities in order 55 for wireless stations for aeronautical to confiscate devices and inspections navigation communications. follow necessary procedures. of sites to ensure that institutions are 190 using these frequencies according to Requests for amateur wireless the technical specifications under licenses have been reviewed. which these frequencies were 21,274 previously licensed by the CITC Wireless devices were inspected for compliance with technical 13,871 & Frequencies 324 135 requirements. Calibration of 324 devices, repair of 135 have been monitored to 1,378 frequency spectrum management system determine the scope of use reports devices and performance of technical 40 for each in order to achieve about harmful interference between Requests for licensing measurements for 819 wireless devices. the optimal use of uses of frequencies in the Kingdom have use of wireless devices frequencies. been reviewed and removed were reviewed.

110 111 Annual Report 2016 Appendix (C): Issued Licenses / Total No. of Licensees

B 2 ICT devices and equipment /24 /26 /33 /34 28/1429 30/1431 35/1436 36/1437 37/1438 1425 1427 1434 1435 Service )2008( )2010( )2014( )2015( )2016( )2004( )2006( )2012( )2013(

Landline Services 1 1 1 2 2 2 2 2 2

Mobile Telecom Services 2 2 3 3 3 3 3 3 3

2 2 2 ــ ــ ــ ــ ــ ــ MVNO Operator Services

Data Services 2 2 2 2 2 2 3 3 3

Internet Services 23 47 53 56 40 41 50 47 46

VSAT Services 5 7 14 18 19 19 19 18 19

Mobile Personal Communication 2,965 18,453 2 3 3 3 2 2 1 1 1 Requests Requests Services 1 ــ ــ ــ ــ to approve devices and for licensing and obtaining Internet Service on Aircraft 1 1 1 1 settle requests were permits for ICT devices were 0 ــ ــ ــ ــ 2 1 1 ــ reviewed. received from suppliers and Mobile Service on Aircraft were reviewed AVL Services 6 24 26 44 64 74 89 99 118

Bulk SMS Services 6 92 135 137 127 131 116 99 94

3 3 6 5 6 14 24 26 ــ Audio Text (700) Services

43 27 24 20 15 11 10 7 ــ Call Center Services

0 ــ ــ ــ _ 5 5 2 ــ Electronic Wallet Services

Prepaid Card Recharging 0 ــ ــ ــ 1 5 4 4 ــ 8,823 85 Services 5 4 4 4 4 4 3 3 ــ (Inquiries & requests Requests Network Operations Centers (NOCs

0 ــ ــ ــ ــ ــ ــ ــ ــ for suggestions from for responses concerning Automatic Calling to Subscribers internal and external confiscated ICT devices, technical 5 5 6 6 7 6 3 ــ ــ institutions and settlement consultations and settlement of Hosting ICT devices and equipment of related issues. such issues were reviewed. 1 ــ ــ ــ ــ ــ 1 ــ ــ (Carrier Service Provider (CSP

lobal Mobile Personal CommunicationG 3 2 1 ــ ــ ــ - ــ ــ Services (GMPCS)

313 292 309 325 315 349 ٢٨٨ Total No. of Licenses 48 222

112 113 Annual Report 2016

Appendix D: Final Accounts

Fiscal year 1436/1437 Fiscal year 1438/1437 Fiscal year 1436/1437 Fiscal year 1437/1438 As of 12/30/2015 audited As of 12/30/2016 As of 12/30/2015 audited and As of 12/30/2016 not audited Revenues and approved (Thousand Riyals) not audited (Thousand Riyals) Expenditures approved (Thousand Riyals) (Thousand Riyals)

Commercial Services Employee Costs Provisioning Fees 3,248,434 2,148,452 254,243 266,303

General and Admin Expenditures 69,320 91,904 License Fees 321,666 371,612 Consulting 18,627 58,221 Spectrum Usage Fees 20,936,819 492,902 IT Systems and Software 2,681 5,935 Other Revenues 70,895 68,301 Capital Expenditures 12,929 39,084

Total Revenues 24,577,814 3,081,267 Total Expenditures 357,800 461,447

114 115 Annual Report 2016

Surplus

Fiscal year 1436/1437 As of 12/30/2015 audited and 24,220,014 approved (thousand Riyals) Twenty four billion, two hundred and twenty million, fourteen thousand Riyals

Fiscal year 1437/1438 As of 2,619,820 12/30/2016 not audited Two billion, six hundred and nineteen million, (thousand Riyals) eight hundred and twenty thousand Riyals

Note:

The CITC bills for and collects revenues in exchange for a financial return for providing this commercial service. This revenue is turned over to the Public Treasury.

116 117 Annual Report 2016

118 119 www.citc.gov.sa

Annual Report 1437-1438 2016