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Arab Communications Markets Indicators and the road ahead

Arab Communications Markets Indicators and the road ahead. Jawad Abbassi Arab Advisors Group. The Arab Telecom and Internet Forum May 31, 2003. Outline. Communications and Internet situation in the Arab World

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Arab Communications Markets Indicators and the road ahead

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  1. Arab Communications Markets Indicators and the road ahead Jawad Abbassi Arab Advisors Group The Arab Telecom and Internet Forum May 31, 2003

  2. Outline • Communications and Internet situation in the Arab World • The effects of liberalization and privatization on infrastructure and service availability • The upcoming competitive landscape in Arab countries

  3. A regional comparison *Figures by end of 2002 Source: Arab Advisors Group reports www.arabadvisors.com

  4. A regional comparison Source: Arab Advisors Group reports www.arabadvisors.com

  5. Mobiles and mainlines • When Mobiles exceeded PSTN lines: • Bahrain, Kuwait, Morocco, UAE in 2000 • Jordan, Lebanon, Oman and Qatar in 2001 • Saudi Arabia in 2002 • Egypt, expected in 2005 • Syria, expected in 2007 • Source: Arab Advisors Group’s “A Comparative Analysis of the Cellular and Mainlines Markets in the Arab World” – October 2002 Source: Operators, Arab Advisors Group

  6. Mainlines Market Share Index • Source: Arab Advisors Group’s “A Comparative Analysis of the Cellular and Mainlines Markets in the Arab World” – October 2002

  7. Cellular Market Share Index • Source: Arab Advisors Group’s “A Comparative Analysis of the Cellular and Mainlines Markets in the Arab World” – October 2002

  8. Arab Advisors IVCU Index A total of 64.1 K circuits and 5.38 billion minutes * International Voice Circuits Utilization (IVCU) Index. Source: International Connectivity in the Arab World - Dec. 2001

  9. Int’l Connectivity operators • Two major international submarine fiber optic cables and three satellite operators • Arabsat • Intelsat • Inmarsat • SEA-ME-WE • FLAG

  10. Internet Bandwidth Index

  11. Competition in the region? Source: Arab Advisors Group reports www.arabadvisors.com

  12. Why is competition important? • Better and more responsive service • Expanding bases of consumers of communications services • cost-based pricing (tariff rebalancing, which could mean lower or higher rates) • Enhance global investor interest and create employment

  13. Upcoming liberalization plans Bahrain • Duopoly of GSM market expected by end of 2003 • Internet competition before the end of the year • Second fixed line operator (including ILD) expected by 2005 Egypt • Full competition (i.e. a third GSM operator) by 2003. Some doubts on this. • Second fixed line operator (including ILD) expected by 2005

  14. Upcoming liberalization plans Jordan • A third GSM operator by end of 2003 • iDEN Operator in 2004 • Second fixed line operator (including ILD) by 2005 Kuwait • Full competition (i.e. a third GSM operator) expected by 2005-2006 • Second fixed line operator (including ILD) expected by 2005-2006

  15. Upcoming liberalization plans Lebanon • A third GSM operator expected by end of 2003 • Second fixed line operator (including ILD) expected after 2005 Morocco • The first to introduce ILD competition in the region. Two Radio Trunking operators. • Full ILD competition expected to start in 2003 • Expected to be the first to grant a second fixed line license in 2003. Delays and one failed attempt

  16. Upcoming liberalization plans Qatar • Second GSM operator expected by 2005 • No clear timeline for a second fixed line operator (including ILD) Saudi Arabia • STC partially privatized 30% in January 2003 • Second GSM license during the last quarter in 2004 • Second fixed line operator in 2008 • iDEN operator under BOT agreement with STC

  17. Upcoming liberalization plans UAE • Duopoly of GSM market expected by end of 2005 • Second fixed line operator (including ILD) expected by 2005

  18. Global Telecom Operators in the MENA region

  19. The lost golden years • The GSM license fees as cash cows for a few Arab governments • 1998-2000 were the years of massive telecom license valuations: Some Arab countries benefited (Egypt, Morocco), others lost the chance (Oman, Egypt, Lebanon, Jordan, etc.) • Markets remain growth markets and profitable. Much less hyped however!

  20. Enabling proper competition • Policy on local loop unbundling (or infrastructure-based competition) • Tariff rebalancing • Phasing out of cross subsidization (VoIP termination example) • Transparent and strong regulators • A courageous judiciary • The possible role of GSM operators in spearheading full competition

  21. Arab Advisors Group Arab Advisors Group provides reliable research, analysis and forecasts of Arab communications, media and technology markets. This presentation draws from around 160 reports published by Arab Advisors Group’s team. Arab Advisors Group consulting service has served new telecom ventures in the Arab World whose investments in Arab Telecom markets will exceed One billion US$ . www.arabadvisors.com Tel: 962.6.5828849Fax: 962.6.5828809 arabadvisors@arabadvisors.com

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