STC's key account customers represented over 75 per cent of all data communications connections in Saudi Arabia in 2003, according to IDC (page 2 of 2)

Eventually, these client relationships could develop further, allowing the new entrants to churn WAN connections from the incumbent."

The SMB market segment, on the other hand, is very under-penetrated, according to the IDC study. Many of the SMBs, particularly small companies, are not likely to develop a sudden appetite for data connectivity solutions. IDC believes that successful players will need to target medium-sized enterprises that have a pent-up demand for connectivity but, due to price sensitivity or other factors, have so far refrained from spending on connectivity solutions. "Tapping into the large, under-penetrated, and vertically diverse SMB segment will be a drain on the sales and marketing efforts of any one service provider," says Malaki. "Players need to consider indirect sales channels that can target these customers more attentively." With a spending CAGR of over 12% between 2003 and 2008, data communications is a significant growth opportunity for new entrants according to IDC's forecasts. IDC believes that the question is no longer whether the market will grow, rather, it is which custo mer segments are generating the spending, and how can new entrants tap into those segments most effectively.

IDC's Saudi Arabia Data Communications Services 2004-2008 Forecast, sizes, forecasts, and analyzes the trends seen in the data communications services market of Saudi Arabia. The study segments the market by service type, bandwidth, access technology, and business size (not site size). Forecasts in this study are to 2008, while historical figures are listed for 2002 and 2003.