2008 Middle Eastern - Fixed Telecoms Market Overview

This Middle East market report gives an overview of the fixed-line segment of the telecoms markets of the region. It also details the major operators and infrastructure in each of the following countries: Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, UAE and Yemen. The region’s markets include:

Bahrain

From 1 July 2004 all sectors of the Bahraini communications market were liberalised. There are now 16 operators, including seven fixed-line local voice service providers and 15 international voice service providers. The TRA claims that international call charges fell by 56% over the three years to 2008. Much of this change has been caused by the growth of VoIP-based calling cards, driven particularly by the large expat population.

Incumbent Batelco expects to complete the migration of all services from its original network to an NGN by the end of 2008.

Israel

While incumbent Bezeq still has a big majority of the domestic fixed-line market, its share has fallen rapidly since the introduction of number portability in December 2007 and by mid-2008 was down to 85%. VoIP operators and cable company HOT are the beneficiaries.

The international fixed-line market has been very competitive for many years. Three operators dominate the market with roughly equal shares. All are keen to move into providing domestic call services and the three already share the majority of the ISP market.

This market is particularly interesting as these players, together with the three mobile operators, jostle for position. Significant investments are being made in NGN infrastructure.

Jordan

Jordan has one of the most open telecom markets in the Middle East and an independent regulator. The fixed-line sector was liberalised on 1 January 2005 with the market open to full competition. Incumbent operator Jordan Telecom has been fully privatised.

Instead of full Local Loop Unbundling, the TRC introduced cost-based bit-stream unbundling. Jordan Telecom introduced a wholesale pricing structure, with discounts for alternative licensed operators and ISPs, in May 2004, but alternative operators have continually complained that wholesale rates are too high. The TRC is now planning to introduce LLU in some form and in early 2008 conducted a consultation process in preparation.

Faced with the unavoidable prospect of losing voice market share to alternative operators, Jordan Telecom has increased its focus on broadband services. Alternative operators mostly offer VoIP services and compete in the long-distance voice markets.

Saudi Arabia

Saudi Arabian fixed-line teledensity (and broadband penetration) are low. Competition has been introduced into the fixed-line market with hope that it will lead to similar extensive development as has happened in the mobile market with increased competition. Three companies were awarded licences –Batelco/Atheeb, US consortia MCI International/Verizon and Hong Kong-based PCCW. Data communication provision licences were also awarded to two companies – ITC and Bayanat Al Oula. Bayanat has since been acquired by mobile operator Mobily, a subsidiary of UAE incumbent Etisalat, which could result in a serious competitor for STC.

All licence winners, together with incumbent STC, are making substantial investments in infrastructure and intend to make extensive use of WiMAX.

Data in this report is the latest available at the time of preparation and may not be for the current year.

For those needing high level strategic information and objective analysis on the regulatory structure and fixed-line markets in the Middle East, this report is essential reading and gives further information on:

·         The increasing competition in the fixed-line sector;

·         Developments and investment in fixed-line infrastructure;

·         Increasing international submarine cable capacity;

·         Operator acquisition activity both in the region and beyond.