Arab ICT Use Report 2009

8/10/2019 Arab ICT Use Report 2009

1/88

Country ICT Profile, Service Providers, Key Telecom Players,

Penetration & Growth Trends

Copyright 2009-2010 Madar Research Group. All rights reserved.


2/88

2

Arab ICT Use Report 2009

C O N T A C T I N F O R M A T I O N

MA D A R R E S E A R C H G R O U P ,A Binzayed Group Company

Dubai Media City,

Building No. 8, Office 221.PO Box 502180 Dubai,

United Arab Emirates.

Tel. +971 4 3903059,

Fax: +971 4 3904688

www.madarresearch.com

Copyright 2009-2010 Madar Research Group. All rights reserved.

This copy ofArab ICT Use Report 2008report is intended solely for the recipient it is addressed to. It is

illegalto photocopy, electronically transmit, download to a database, or otherwise reproduce, distribute,

disseminate, publish, sell, send or circulate any portion of theArab ICT Use Report 2008to any person or

entity without the express written permission of Madar Research Group. Non-compliance may result in

legal action.

DISCLAIMERAll analyses, conclusions and recommendations provided in this research report are based on information and datagathered through primary research (telephone, e-mail or face-to-face interviews) and desk research (mainly from officialnews websites and published reports). Madar Research cannot be held responsible for any inaccuracy in the informationand data thus gathered which might have affected the analyses and conclusions in this report. Accordingly, MadarResearch is not responsible and cannot be held liable under any circumstances for any damage or loss financial orotherwise that may incur as a result of pursuing the recommendations and acting according to the findings of this report.


3/88

3


T A B L E O F C O N T E N T S

O V E R V I E W .......................................................................................................................4

A N A L Y S I S O F M A J O R T R E N D S ......................................................................9

MOBILE PHONE SUBSCRIPTIONS ..............................................................................................9

F IXED L INE SUBSCRIPTIONS.................................................................................................... 14

M O B I L E - T O - F I X E D - L I N E S U B S C R I B E R S ............................................................................. 19

I N T E R N E T U S E R S ...................................................................................................................20

C O M P U T E R I N S T A L L E D B A S E ..............................................................................................23

I N D E P E N D E N T R E G U L A T O R Y A U T H O R I T I E S A N D L I B E R A L I Z A T I O N ................................26

C O U N T R Y I C T P R O F I L E S ................................................................................28

I C T P E N E T R A T I O N I N G CC - 2 0 0 8 ...................................................................................28

B A H R A I N : ...........................................................................................................................29

K U W A I T .............................................................................................................................. 31

O M A N .................................................................................................................................33

QA T A R ................................................................................................................................36

S A U D I A R A B I A ..................................................................................................................38

U N I T E D A R A B E M I R A T E S .................................................................................................42

G C C B R O A D B A N D P E N E T R A T I O N ...................................................................................45

I C T P E N E T R A T I O N I N L E V A N T 2 0 0 8 .............................................................................47

E G Y P T .................................................................................................................................47

I R A Q....................................................................................................................................50

J O R D A N ..............................................................................................................................52

L E B A N O N ............................................................................................................................54

P A L E S T I N E ..........................................................................................................................56

S Y R I A ..................................................................................................................................58

I C T P E N E T R A T I O N N O R T H A F R I C A - 2 0 0 8 ....................................................................... 61

A L G E R I A .............................................................................................................................62

L I B Y A ..................................................................................................................................65

M O R O C C O ..........................................................................................................................67

T U N I S I A ..............................................................................................................................70

O T H E R A R A B C O U N T R I E S ....................................................................................................72

S U D A N ................................................................................................................................72

Y E M E N ................................................................................................................................75

A P P E N D I X ......................................................................................................................77

A C T I V E M O B I L E P H O N E O P E R A T O R S I N T H E ME N A R E G I O N ........................................77

A C T I V E F I X E D L I N E O P E R A T O R S I N T H E M E N A R E G I O N ...............................................78

P O P U L A T I O N QU E S T I O N & I T S I M P A C T O N G C C P E R F O R M A N C E I N D I C A T O R s......... 80


4/88

4


O V E R V I E W

The Arab world continued to make significant progress in the adoption of information and

communication technology (ICT) in 2008, with a strong trend for better services and increased

competition extending into the fixed line and Internet sectors. The average score of the 18MENA economies on Madar Researchs Arab ICT Use Index increased by 0.27 points to yield

1.01 at 2008 from 0.83 in 2007.

Madar Researchs annual Arab ICT Use Index examines four major indicators for each of the

18 MENA economies: mobile phone subscribers, fixed-line subscribers, Internet users and

installed computers. The index is calculated by adding the values of these four indicators for

each country and dividing the sum by its population. A higher score on the index indicates

more aggressive ICT adoption.

Before the economic downturn, the oil rich countries of the MENA region had largely

benefited, but to varying degrees (depending on their reserves and production quotas), fromthe very high oil and gas prices. More than ever, these countries now realize the need to use

this wealth for upgrading their infrastructure, developing their human resources and

diversifying their economies. They are also keen to use wealth for enhancing the knowledge

component of their economies as a safeguard against risky and perhaps less profitable future.

All these factors can be seen as a major contributor to growth in the telecom industry across

the MENA region.

Arab ICT Use Indicators 2008

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

2007 2008

Population Mobile Subscribers Fixed lines Internet Users PC Installed Base

The country with the highest fixed line penetration, the United Arab Emirates (UAE), topped

the 2008 index, with a score of 2.39. The UAE was among the top five for almost all the ICT

sectors. Industry analysts, however, predict the economic slowdown (or recession) and low oil

prices to lead to a sharp decrease in UAEs population growth in coming years, thus shrinking

mobile subscriber base. Regardless of the economic slowdown or the decline in transient

labor population analysts believe that subscribers growth should come from business visitors,


5/88


6/88

6


registered 19.06% and Bahrain ranked third overall on the index in mobile phone penetration,

at 125.68%, and first in the MENA region in computer penetration, at 35.23%.

In third place, Qatars overall score of 2.12 (from 1.70) on the 2008 Arab ICT Use Index also

represents a significant rise over its 2007 score. Qatars Qtel still holds a monopoly on the

countrys fixed line, mobile and Internet services. Although Vodafone Qatar (a consortium

made up of Vodafone Europe and the Qatar Foundation) is the second entrant to Qtels 22-

year monopoly over the telecom market, it hasnt yet began full operations in Qatar. It has so

far only initiated test operations, gradually powering up the first 1,000 customers. According

to recent reports, Vodafone Qatar was scheduled to launch services in March 2009 but this

was put back to June, with the Supreme Council for Information and Communication

Technology (ictQatar) revising the terms of Vodafones licensing agreement in April, giving ituntil September 1 to establish coverage over 98% of the country. Qtels Nawaras had also

been granted a first-class fixed-line license for a 25-year term by the government of Oman.

Qatar ranked third overall behind the United Arab Emirates and Bahrain in computer

penetration in the MENA region, with a penetration rate of 32.06%. Meanwhile, it ranked

second in Internet penetration (38.11%) and fixed line penetration (16.95%). Qatars mobile

phone penetration of 125.27% ranked it fourth in the Arab world in 2008.

Saudi Arabia held fourth place on the 2008 index, with an overall score of 2.09, a 0.43 point

above its 2007 score of 1.66. Its rank on the index is buttressed mainly by the countrys high

mobile phone penetration (142.87%) which ranked it first in the MENA region as a regional

telecom war heats up and the telecom providers are under intense pressure to improveprofitability, with huge rivals like STC, Kuwait's Zain and Emirates Telecommunications

competing in the region. Mobily, STC's most serious rival, recently posted a 50 percent rise in

second-quarter net profit over STC 22% profit drop in second-quarter profit, citing foreign

expansion costs and higher roaming fees had hurt profitability. Saudi Arabia ranked fourth in

the Arab world on fixed line penetration (17.38%), and fifth on Internet penetration (31.44%)

and computer penetration (18.84%). A number of Saudi Telecom providers are considering

reducing the charges by almost 70 percent as they seek to increase the number of users.

Mobile Vs. Fixedline Penetration Rate - 2008

0%

20%

40%

60%

80%

100%

120%140%

160%

SaudiA

rabia

UAE

Bahrain

Qatar

Libya

Oman

Kuwait

Jordan

Tunisia

Algeria

Morocco

Iraq

Egypt

Palestine

Syria

Lebano

n

Sudan

Yemen

PenetrationRate

Mobile Penetration Fixedline Penetration


7/88

7


Meanwhile, Kuwait ranked fifth on the index, with 29.68% computer penetration and 36.97%

Internet penetration, ranking the country in the fourth place. Meanwhile, Kuwaits fixed line

penetration (15.90%) gave it sixth ranking in the MENA region. In spite of a third

operator, Viva, venturing into the Kuwait telecommunication market, the countrys mobile

penetration rate is below 100%, which is low when compared to its GCC counterparts,

especially the UAE which has 137% percent penetration. With a penetration rate of 98.28%

Kuwait is placed fifth in the Arab world on the indicator behind the United Arab Emirates,

Saudi Arabia, Bahrain and Qatar. The country scored 1.81 overall on the index, 0.28 points

behind Saudi Arabia.

Although GCC countries dominated the Arab ICT Use Index by occupying the top five

positions, they did not make the MENA regions list of countries with the highest growth

rates, except for Qatar registering the highest growth rate in mobile subscribers. That

privilege went to a selection of other MENA economies, which have largely underdeveloped

ICT markets where growth tends to be more visible. Libya achieved an impressive 75.76%

growth in the number of fixed line subscriptions in 2008 the strongest in the Arab world

followed by Yemen and Iraq with 30.84% and 25.36% growth, respectively. Growth in mobile

subscriptions was highest in Qatar at 54.47%. In 2008, countries like Lebanon, Jordan and

Tunisia registered negative fixed line growth. Iraq had the highest growth rate in the region

for Internet users and computer installed base, at 55% and 43%, third highest growth rate inthe region both in terms of mobile and fixed lines rising at 43.13% and 25.36%, while Yemen

registered the regions second highest growth rate in the fixed line and mobile segment, at

47.53% and 30.84%, respectively. As the case in Yemen, Moroccos competitive fixed line

service provider market helped drive growth in the sector, at 24.96%. Growth in the Internet

user market in 2008 was dominated by Egypt (45.82%), Syria (43%) and Sudan (42%), while

the top three positions in computer installed base growth went to Iraq (43%), Qatar (41.5%)

and Libya (41%).

Mobile Vs. Fixedline Growth Rate - 2008

-40%

-20%

0%

20%

40%

60%

80%

100%

Qatar

Yemen

Iraq

Libya

Egypt

Bahrain

Oman

UAE

SaudiArabia

Kuwait

Syria

Lebanon

Sudan

Palestine

Jordan

Morocco

Tunisia

Algeria

GrowthRate

Mobile Growth Fixedline Growth


8/88

8


Palestine, Yemen and Sudan trailed the Arab world on the 2008 Arab ICT Use Index, ranking in

16th, 17th and 18th place respectively. Yemens score of 0.41 reflects the lowest penetration

rates in the MENA region on three of the four indicators, namely mobile phone penetration

(26.06%), Internet penetration (6.76%) and computer penetration (7.8%). Yemens fixed line

penetration rate saved it from bottoming out on all four indicators of the index, with the

country achieving 5.75% penetration (compared to Sudans 0.85%), ranking Yemen 17thon the

indicator. Meanwhile, Sudan scored slightly lower, 0.40 points, on the overall index and

Palestine 0.76 points.

Unlike 2007, where growth was dominated by mobile phone subscribers, 2008 saw an

impetus growth in Internet users, with the proliferation of online technology advancements

such as audio/video sharing, online gaming, instant messaging and social networking websites

changing the dynamics of the MENAs Internet culture. Internet users surged from 39,396,690

users in 2007 to 52,698,411 users in 2008, registering a 33.76% growth. Computer installed

base was the second-fastest growth sector in 2008, with computers witnessing a 29.65%

growth from 19,866,800 to 25,758,299 computers. Growth was slower for mobile

subscribers, with total subscription numbers increasing 25.03% from 174,877,340 to

218,644,453 subscribers. The slowest growth rate was recorded in the fixed line sector from32,574,421 to 36,281,348 or 11.38% growth.

Note must be made that discrepancies in historical data for the indicators (whenever present)

are generally the result of corrections made by the various providers to their subscriber bases,

mainly to account for new definitions of subscribers or because of tighter control over

statistical data exercised by newly-established regulatory authorities. In the case of the four

indicators, Madar Research has revised some figures as a result of new developments or data

that have come to light since the estimates were first made.


9/88

9


A N A L Y S I S O F M A J O R T R E N D S

MOBILE PHONE SUBSCRIPTIONS

Six countries in the region had penetration levels well over 100%. By 2008 all countries in the

region (except Qatar) had at least two mobile phone operators. By year end 2008, less than 22

months after starting operations, the United Arab Emirates second mobile phone operator,

Du, registered 2,779,000 subscribers, compared to Etisalats 7,300,000 subscribers. This

strong growth in subscriber base has resulted in higher revenue for the company and has

helped to capture substantial market share from the former incumbent, Etisalat, bringing the

total number of mobile phone subscribers in the country to 10,079,000. The figure represents

a feeble growth for the operators in 2008 at 28.04% over the previous years 42.61%, ranking

8thon the growth index among Arab countries. Meanwhile, mobile phone penetration rose to

137.4%, the second highest rate in the MENA region for the year, up from the 131.64% in

A R A B M O B I L E P H O N E P E N E T R A T I O N B Y C O U N T R Y , 2 0 07 - 20 0 8

( R A N K E D B Y P E N E T R A T I O N )

RANK COUNTRY POPULATIONMOBILE PHONE

SUBSCRIPTIONS

MOBILE PHONE

PENETRATION

1 Saudi Arabia 25,239,067 36,059,212 142.87%

2 UAE 7,338,140 10,079,000 137.35%

3 Bahrain 1,156,114 1,453,000 125.68%

4 Qatar 1,553,729 1,946,343 125.27%

5 Libya 6,357,000 7,250,000 114.05%

6 Oman 3,013,184 3,219,865 106.86%

7 Kuwait 3,441,813 3,382,733 98.28%

8 Jordan 5,850,000 5,438,000 92.96%

9 Tunisia 10,377,200 8,411,630 81.06%

10 Algeria 34,634,000 27,031,474 78.05%

11 Morocco 31,345,356 22,816,000 72.79%

12 Iraq 30,581,365 18,287,470 59.80%

13 Egypt 76,054,000 44,526,000 58.55%

14 Palestine 4,212,000 2,022,163 48.01%

15 Syria 19,880,423 7,789,563 39.18%

16 Lebanon 4,209,000 1,436,000 34.12%

17 Sudan 41,810,000 11,437,000 27.35%

18 Yemen 23,248,500 6,059,000 26.06%

TO T A L 330,300,890 218,644,453 66.20%

Source: Madar Research


10/88

10


2007. The United Arab Emirates mobile phone subscriber figures for the coming years are

expected to witness a sharp drop. The result of the current economic slowdown and the

higher cost of living in some emirates is bound to lead to a reduction in population growth in

the UAE, which has been one of the key drivers for increased subscriber numbers over the last

few years. Furthermore, Etisalat and Du are expected to enjoy a duopoly over fixed line,

mobile phone and Internet access services until at least 2010.

Total mobile phone subscriptions in the MENA region numbered 218,644,453 in 2008,

marking a growth rate of 25.03%, from 174,877,340 subscriptions in 2007 whichrepresented a growth of 40.51% over 2006. Qatar registered the highest growth in the Arab

world (54.47%) in terms of subscription in 2008, followed by Yemen (47.53%) and Iraq

(43.13%). In terms of mobile penetration, the figures showed that Saudi Arabia had the

highest penetration of 142.87%, followed by UAE and Bahrain at 137.35% and 125.68%,

respectively.

Similar to the UAE, the launch of a new mobile phone operator in Egypt had stimulated the

market greatly, with Etisalat Misr registering 6,800,000 subscriptions by end 2008. The

countrys two existing mobile phone service providers recorded a combined growth of 32.6%

A R A B M O B I L E P H O N E S U B S C R I P T I O N S B Y C O U N T R Y , 2 0 0 7- 2 00 8

( R A N K E D B Y G R O W T H )

RANK COUNTRY

MOBILE PHONE

SUBSCRIPTIONS 2007

MOBILE PHONE

SUBSCRIPTIONS 2008

GROWTH

(%)

1 Qatar 1,260,000 1,946,343 54.47%

2 Yemen 4,107,000 6,059,000 47.53%

3 Iraq 12,777,000 18,287,470 43.13%

4 Libya 5,105,073 7,250,000 42.02%

5 Egypt 31,550,626 44,526,000 41.13%6 Bahrain 1,116,000 1,453,000 30.20%

7 Oman 2,500,115 3,219,865 28.79%

8 UAE 7,872,000 10,079,000 28.04%

9 Saudi Arabia 28,400,041 36,059,212 26.97%

10 Kuwait 2,773,688 3,382,733 21.96%

11 Syria 6,451,104 7,789,563 20.75%

12 Lebanon 1,216,000 1,436,000 18.09%

13 Sudan 9,860,474 11,437,000 15.99%

14 Palestine 1,744,600 2,022,163 15.91%15 Jordan 4,772,000 5,438,000 13.96%

16 Morocco 20,029,000 22,816,000 13.91%

17 Tunisia 7,842,619 8,411,630 7.26%

18 Algeria 25,500,000 27,031,474 6.01%

T O T A L 174,877,340 218,644,453 25.03%



11/88

11


in their subscription figures, with Vodafone Egypts subscriber base rising by 32.09% to

17,611,000 subscribers and Mobinils subscriber base rising 33.06% to 20,115,000. Total

mobile phone subscriptions in Egypt numbered 44,526,000 by end 2008 the highest number

of mobile phone subscriptions in the Arab world in absolute figures. This figure represents a

growth rate of 41.13% from 31,550,626 subscriptions in 2007 the fifth fastest growth rate in

mobile phone subscriptions in the Arab world behind Libya and Iraq.

Iraq ranked third on the Arab mobile subscription growth index, with subscriptions growing by

43.13%, from 12,777,000 to 18,287,470. The Iraqi government had imposed a fine of over 20

million US$ on its regional telecom providers for outages and poor network quality, though

the operators have put the blame to US security services which use mobile jammers to

prevent bomb detonations. Despite a double digit growth this year, Iraqs mobile phone

penetration remains comparatively low and ahead of Egypt.

Libyas mobile phone subscriber base grew by a strong 42.02% in 2008, with its two state-

owned mobile phone operators registering 2,144,927 new subscriptions for a total of

7,250,000 subscriptions by year end 2008. Strong growth in the mobile sector catapulted the

country into 5th place in the MENA region in terms of mobile phone penetration, with Libyarecording 114.05% penetration in 2007, from 43.14% in 2006. Likewise, five GCC member

countries registered penetration rates in excess of 100% in 2008: Saudi Arabia (142.87%), UAE

(137.4%) and Bahrain (125.7%) were in the first 3 spots. Fourth and fifth place in the standings

were also taken by Qatar with 125.3% penetration and Oman with 106.86% penetration.

The regions slowest growth in 2008 was recorded by Algeria, whose mobile phone

subscriptions had the lowest growth in 2008 at 6%, from the 6.86% in 2007. Compared to

the 25,500,000 subscribers of last year (2007), Algerias subscriber base increased by

1,531,474 new subscribers over the previous year. Nevertheless, the country ranked 10 thin

the region in terms of mobile phone penetration, at 82.6%. Three other countries that

registered the lowest double digit growth in 2008 were Tunisia (7.26%), Morocco (13.91%)and Jordan (13.96%). Meanwhile, Yemen registered the regions lowest mobile phone

penetration, at 26.06%, followed by Sudan (27.35%), Lebanon (34.1%), Syria (39.2%) and

Palestine (48.01%).

Several major developments took place in the mobile sector in 2007 that were carried over to

2008 and 2009. In September 2008, Bahrains Telecommunications regulatory authority

invited bids for the countrys third mobile phone operator license with the new operator

expected to launch services in 2009 to compete with existing mobile phone service providers,

Batelco and Zain. Saudi Telecommunications Company (STC) became the successful bidder for

the third mobile License in Bahrain with a bid of 86.69 million Bahraini Dinars ($230 million).

The complete commercial launch of the all-new, scalable 3.5G network for Oman Mobile was

done on March 2009 to support the bandwidth hungry services of the future. Meanwhile,

Oman Mobile also became the first company in Middle East to grant resale rights to firms

using its infrastructure. It has signed contracts with two new mobile operators Renna and

FRiENDi allowing them to resell mobile services to subscribers across Oman using their own

brands marketing and sales channels. The UAE based FRiENDi mobile, the first mobile virtual

network operator (MVNO) in the Middle East and the Omans first mobile reseller went live

on April 2009 and its rival, the fully Omani owned MVNO operator Renna on May 2009. Both


12/88

12


firms are focusing on transforming the telecommunication industry in Oman by providing

value added products and services.

Kuwait awarded the countrys third mobile phone license in November 2007 to a consortium

led by Saudi Telecom. Established in June 2008, Kuwait Telecommunications Company

(branded Viva) launched its services in December 2008. Meanwhile, Qatars Supreme Council

for Information and Communications Technology (ictQatar) set in motion the liberalization of

the countrys telecommunications sector with the award of a second mobile phone license in

December 2007 to a consortium comprising Vodafone and the Qatar Foundation. Vodafone

Qatar is expected to start commercial operations in Q1 2009. In spite of a third operator, Viva,

venturing into the Kuwait telecommunication market, the mobile penetration rate is expected

to exceed 100 percent only in 2010, which is low compared to other GCC countries, especially

the UAE which has 137% percent penetration.

In June 2007, the Saudi Council of Ministers granted a new mobile phone license to a

consortium led by Kuwaits Zain (formerly MTC-Vodafone). The company launched

commercial operations in Saudi Arabia in August 2008.

Although Iraqs three mobile phone licenses expired in December 2005, the country did not

award new ones the following year as expected, but extended existing licenses throughout

the year on a semi-annual and then quarterly basis. The country eventually awarded the three

national mobile phone licenses in August 2007 to Kuwaits Zain (Atheer), Qatars Qtel

(Asiacell) and Iraqs Korek Telecom.

Qatars Qtel was also awarded a license through its subsidiary Wataniya Telecom for

Palestines second mobile phone service provider in March 2007, which is yet to begin

operations in Palestine.

A R A B M O B I L E P H O N E S U B S C R I P T I O N S B Y R E G I O N , 2 0 07 - 20 0 8

COUNTRYMOBILE PHONE

SUBSCRIPTIONS 2007

MOBILE PHONE

SUBSCRIPTIONS 2008

GROWTH

(%)

LEVANT 58,511,330 79,499,196 35.87%

GCC 43,921,844 56,140,153 27.82%

NORTH AFRICA 58,476,692 65,509,104 12.03%

SUDAN & YEMEN 13,967,474 17,496,000 25.26%

T O T A L 174,877,340 218,644,453 25.03%



13/88

13


Mobile Phone Subscription by Region,

2007

33.44%7.99%

25.12%

33.46%

Levant GCC North Africa Yemen & Sudan

Mobile Phone Subscription by Region, 2008

29.96%8%

25.68%36.36%

Levant GCC North Africa Sudan & Yemen


Levant countries grew by a sluggish 35.87% from the 50.21% in 2007 to register 20,987,866

new mobile phone subscriptions and bring the total base to 79,499,196by year end 2008,against 58,511,330 in 2007. Meanwhile, GCC countries registered 56,140,153 mobile phones

subscriptions, compared to 43,921,844 subscriptions in 2007 down to a slower 27.8% over

end 2007 figures (40.04% growth in 2007). North Africa witnessed the slowest growth in the

sector, with growth in mobile phone subscriptions at only 12.03% in 2008, way down from

26.85% in 2007. As in North Africa growth rates in Sudan and Yemen were low; 25.3% was the

combined growth rate in these two countries, a huge drop from the 78.09% growth

experienced in 2007.

Unlike 2007, which had only the Jordanian mobile market comprising of 4 mobile service

providers, 2008 consisted of two additional countries which were also considered the most

competitive in the MENA region. Competition among mobile operators is also unique in theseregions and would depend on factors like regulatory environment, demand, tariffs and

geography, coverage and promotional approaches. Saudi Arabia and Yemen have four active

operators, followed by Algeria, Iraq, Sudan, Egypt, Morocco and Kuwait, with three mobile

operators each. All other MENA countries have two active operators, barring Palestine and

Qatar, each of which only had one.

Active Mobile Phone Operators 2008

4

3 3 3

4 4

3

2

3

2 2

3

2 2 2 2

1 1

JORDAN

SUDAN

ALGERIA

IRAQ

SAUDI

ARABIA

YEMEN

EGYPT

BAHRAIN

KUWAIT

LEBANON

LIBYA

MOROCCO

OMAN

SYRIA

TUNISIA

UAE

PALESTINE

QATAR


14/88

14


FIXED LINE SUBSCRIPTIONS

The number of fixed-line subscriptions in the 18 MENA economies totaled 36,658,348 in 2008,

up from 32,824,645 subscriptions in 2007. Growth in the fixed line sector has become

stagnant in some economies and is growing at a slow pace. Compared to 2007s 9.7% 2008

witnessed an overall growth of 11.38% in the region. Fixed line penetration within the 18

economies stood at about 11%. The most recent growth can be seen to have taken place

among emerging markets with high population and relatively low penetration rates.

Libya had the fastest growth rate in the MENA Region, with 75.76% compared to the 2.20% of

2007. Subscription for fixed lines in this country was 910,000 in 2008, which is 392,250 more

subscribers than in the previous year. Libyas penetration rate however remains low, with

14.31%, ranking the country 8thon the penetration scale for the MENA region.

Telecommunications infrastructure development in Libya is the responsibility of the state-

owned GPTC, which was set up in 1984. GPTC oversees the operation of fixed and mobile

lines, as well as Libyas Internet service providers (ISPs). GPTC has expanded landline coverage

to several parts of the country, although according to certain reports the quality of its

infrastructure and service needs significant enhancement. Improving network performance

A R A B F I X E D L I N E P E N E T R A T I O N B Y C O U N T R Y , 2 00 7- 20 08

( R A N K E D B Y P E N E T R A T I O N )

RANK COUNTRY POPULATION

FIXED-LINE

SUBSCRIPTIONS

FIXED-LINE

PENETRATION

1 UAE 7,338,140 1,640,000 22.35%

2 Bahrain 1,156,114 220,386 19.06%

3 Syria 19,880,423 3,633,400 18.28%

4 Qatar 1,553,729 263,363 16.95%

5 Saudi Arabia 25,239,067 4,123,000 16.34%

6 Kuwait 3,441,813 547,111 15.90%

7 Egypt 76,054,000 11,900,000 15.65%

8 Libya6,357,000 910,000 14.31%

9 Lebanon 4,209,000 527,500 12.53%

10 Tunisia 10,377,200 1,239,000 11.94%

11 Algeria 34,634,000 3,687,603 10.65%

12 Morocco 31,345,356 2,991,185 9.54%

13 Oman 3,013,184 274,178 9.10%

14 Jordan 5,850,000 519,000 8.87%

15 Palestine 4,212,000 357,000 8.48%

16 Yemen 23,248,500 1,337,122 5.75%

17 Iraq 30,581,365 1,755,000 5.74%18 Sudan 41,810,000 356,500 0.85%

TO T A L 330,300,890 36,658,348 11%



15/88

15


and providing reliable service in both fixed and mobile telephony remains a major challenge

for Libya, especially since the sector lacks competition, is government-controlled and

managed, and marked by the absence of world class suppliers of technology and expertise.

The high growth potential in Libya and the region, however, has recently attracted Turkey's

biggest mobile-phone operator Turkcellto bid for a license to provide landline and mobile-

phone services in Libya.

A R A B F I X E D L I N E G R O W T H B Y C O U N T R Y , 2 0 07 - 20 0 8

( R A N K E D B Y G R O W T H )

RANK COUNTRY

FIXED-LINE

SUBSCRIPTIONS 2007

FIXED-LINE

SUBSCRIPTIONS 2008 GROWTH

1 Libya 517,750 910,000 75.76%

2 Yemen 1,021,988 1,337,122 30.84%

3 Iraq 1,400,000 1,755,000 25.36%

4 Morocco 2,393,767 2,991,185 24.96%

5 Algeria 3,068,409 3,687,603 20.18%

6 UAE 1,371,000 1,640,000 19.62%

7 Egypt 10,900,000 11,900,000 9.17%

8 Qatar 242,000 263,363 8.83%

9 Bahrain 203,500 220,386 8.30%

10 Kuwait 517,300 547,111 5.76%

11 Syria 3,450,000 3,633,400 5.32%

12 Sudan 345,200 356,500 3.27%

13 Saudi Arabia 4,000,000 4,123,000 3.08%

14 Oman 268,065 274,178 2.28%

15 Palestine 350,442 357,000 1.87%

16 Tunisia 1,273,000 1,239,000 -2.67%

17 Jordan 559,000 519,000 -7.16%

18 Lebanon 693,000 527,500 -23.88%

TO T A L 32,574,421 36,281,348 11.38%


Yemen also demonstrated strong growth in 2008. It stood second on the Arab regions fixed-

line growth rate index, at 30.84% compared to the 5.54% of 2007. According to some industry

analysis reports, this growth is expected to be mainly through the PTC's (Public

Telecommunications Corporation) efforts to provide fixed line services in most rural areas of

Yemen. The government of Yemen fully owns and directly oversees the operations of the

monopoly fixed line operator, Public Telecommunications Corporation (PTC), and owns a

controlling stake in the CDMA cellular operator, Yemen Mobile, through the PTC. However,

Yemen had the lowest fixed line penetration rate compared to other Arab countries.

Moroccos fixed telephony market achieved an annual increase of 25% in subscribers, with a

total of 2.991 million lines in service as of December 31, 2008 (including services with

restricted mobility, the majority of which are provided by Wana). In January 2007, the


16/88

16


countrys regulatory authority awarded Wana (formerly Maroc Connect) Moroccos third fixed

line license. Whereas fixed line subscriptions witnessed negative growth in 2006, with the

number of subscriptions falling 5.60% to 1,266,119 subscriptions, the sector witnessed a

dramatic reversal in 2007 and 2008, with fixed line subscriptions growing at 89.06% to register

2,393,767 subscriptions (the highest fixed line growth in 2007) and 24.96% growth with

2991,185 subscriptions in 2008. Moroccos fixed line market represents the fourth fastest

growth in the MENA region for 2008. Fixed line penetration in the country rose to 9.54% from

the 7.63% in 2007, ranking the country in 12th

place, up from 15th

in 2007.

The liberalization of Algerias fixed line market has helped to spur growth in the sector, with

fixed line subscriptions rising by 12.18% in 2008 to yield 20.18% from the 8% in 2007.

However, Algerie Telecom, the incumbent provider continued to dominate the sector,

accounting for 3,687,603 fixed line (wireless local loop subscribers of about 697,603)

subscriptions in 2008. The Consortium Algrien de Tlcommunications (brand name Lacom),

a joint venture between Telecom Egypt and Orascom Telecom that was licensed as Algerias

first private-sector fixed-line operator in 2005, entered the market in 2006 providing WLL

(wireless local loop)1connections exclusively. By end 2007, the company recorded only 44,916

subscriptions, or 1.46% of total fixed line subscriptions in Algeria. Coupled by poortechnology, administrative challenges and lack of strategy, low subscriptions lead to the

virtual collapse of Lacom in 2008. The company could not meet the commitments regarding

national coverage contained in its operating framework. Short on cash, the company laid off

staff and closed a number of boutiques, leaving only a single store open in the capital. Lacom

blamed favoritism on ARPTs part for the benefit of state-run Algerie Telecom as a prime

reason for their collapse.

Meanwhile, in the United Arab Emirates duopoly between the two fixed line service

providers, Emirates Integrated Telecommunications Company (brand name Du) and Emirates

Telecommunications Corporation (Etisalat) continues as they vied for market share in the

country, with Etisalat maintaining its market dominance in 2008. The countrys fixed-linesubscribers numbered 1,640,000 in 2008, rising 19.62% over 2007. Total fixed line subscribers

also include Dus 280,000 residential and business subscribers in several free zone areas and

freehold residential complexes in Dubai. Together, the two companies subscription base

contributed to the United Arab Emirates 22.35% fixed line penetration, the highest

penetration rate in 2008 among MENA economies.

Three countries in the MENA region recorded negative growth in fixed line subscriptions,

namely Tunisia, Jordan and Lebanon. Fixed line subscriptions in Tunisia fell by a significant (-

2.7%), from 1,273,000 to 1,239,000 subscriptions in 2008. The fixed-line telephony monopoly

in Tunisia, plus relatively high prices by the provider, are slowing penetration in households.

National fixed-line rates range from 14 to 20 millimes(thousandths of a dinar) per minute,depending on the time of day. Jordan recorded the second highest negative growth in the

Arab region in fixed line subscriptions; -7.71%, with subscriptions dropping from 559,000 in

2007 to 519,000 in 2008. Consequently, fixed line penetration in Jordan dropped from 9.77%

to 8.87% in 2008, earning the 14thspot on the Arab fixed line penetration scale. Lebanon on

1Wireless local loop (WLL) is a system that connects subscribers to the local telephone station wirelessly rather than through copper wires. It

is used as the "last mile / first mile" connection for delivering plain old telephone service (POTS) and/or broadband Internet to

telecommunications customers.


17/88

17


the other hand recorded the lowest growth rate (or the highest negative growth) on the scale

for fixed lines with -23.88% compared to the 3.43% growth in 2007. With 527,500 subscribers

in 2008 (fewer by 165,500 from 2007) the penetration rate dropped from the 14.74% to

12.53% in 2008 ranking Lebanon ninth on the penetration scale.

Sudan recorded the lowest penetration rate in the Arab region for fixed line subscriptions,registering 0.85% from 345,200 subscriptions in 2007 to 356,500 in 2008. Growth rates in

Sudan remain relatively low as well with 3.27% in 2008. According to certain online reports,

there are no major technical or financing challenges to telecommunications infrastructure

development. However, the penetration rate remains low due to limited demand. Demand

for services other than telephones is also constrained by the regions disposable income and

work practices. Yemen and Iraq fall next in line in terms of economies having the lowest fixed-

line penetration rates at 5.75% and 5.74%, respectively. Iraqs 25.36% growth is among the

top five fastest growth rates in the Arab world Iraqs fixed line subscriptions by end 2008

rose to 1,755,000, up from 1,400,000 to yield 5.47% which was not met well when scaled with

other economies in the Arab world .

Omans fixed line subscriptions have increased relatively well since its negative 0.61% in 2007,

from 269,700 in 2006 to 268,065 subscriptions in 2007. In 2008 fixed line growth surged to

2.28% (274,178 subscribers), with Omantel remaining the sole provider of fixed line services;

local, long distance and international calling, public pay phones, in addition to the Internet. By

end 2008, the number of active public payphones in Oman decreased to 6,703 as compared

with 6,858 by end of 2007 (-2.26%). The reasons mentioned by Omantel for the reduction in

payphones are: removal request from building owners, building maintenance and low

revenue from these payphones. Fixed line penetration rate in Oman in 2008 remained

practically unchanged; 9.10%. Post-paid fixed line subscribers registered positive growth

(12.42%) compared to prepaid subscribers, with 47,306 prepaid and 220,169 postpaid

subscribers registered in the country in 2008.

Kuwait, which has the least liberalized fixed line market in the GCC, on the other hand, grew

by 5.8% to reach 547,111 subscribers. This marginally lifted a low penetration rate of 15.21%

registered in 2007 to 15.90% in 2008. This remained below a 16.15% rate in 2006. Fixed lines

and international gateway services are provided solely by the Ministry of Communications in

Kuwait.

Ranking second in the Arab world in fixed line penetration, Bahrain recorded a rate of 19.06%

in 2008, slightly lower than 19.44%, in 2007 though subscriptions increased from 203,500 in

2007 to 220,386 in 2008. The growth of wireless fixed lines (Wireless Local Loop) in the

country has led to the growth rate of 8.30% in 2008. The marginal decrease in fixed linepenetration in 2008 may be attributed to the countrys increasing population. The licensing of

two new service providers back in 2005 to operate alongside incumbent Batelco in the fixed

line sector has played a strong role in promoting growth of fixed line subscriptions in the

country.

Syria, meanwhile, ranked third in the Arab world in fixed line penetration in 2008, which

stood at 18.28%. The Syrian Telecommunications Establishment, a state-owned body holding

a monopoly over Syria's landline network has started expanding into rural areas as a part of


18/88

18


its fully fledged 2010 reform strategy. Syria ranked 12thon the growth scale among MENA

regions, with 3,633,400 subscribers registered in 2008 representing a growth of 5.32%.

Saudi Arabia, which liberalized its fixed line sector in 2007 with the award of as many as three

new fixed line licenses in June, signaled the end of incumbent Saudi Telecoms long-standing

monopoly over the sector. Saudi Arabia stands 4th in the MENA region with 16.34%

penetration in 2008 compared to 15.69% in 2007. However, Saudi Arabias 3.08% growth rate

ranked it 13th

among Arab countries.

Gulf Cooperation Council countries accounted for 7,068,038 subscriptions in 2008, growing at

a rate of 7.06%. The regions growth rate in 2007 was a lower 2.46%, indicating that growth

remains unchanged and the fixed-line sector is not stagnating with in some of the GCC regionsand may also witness a steady growth in the coming years. Fixed line subscriptions in the

Levant grew by 7.72% to 18,691,900 subscriptions indicating the fixed line market is nearing

saturation among this region with growth slowing down consistently year after year, while

North Africas 2008 fixed line subscriptions dropped by 1.6% to yield 21.71% compared to

23.31% growth in 2007. The highest growth in this sector was attained by the emerging

markets of Sudan and Yemen at 23.88%.

A R A B F I X E D L I N E S U B S C R I P T I O NS B Y R E G I O N , 2 00 7- 20 08

COUNTRY/REGIONFIXED LINE SUBSCRIPTIONS

2007

FIXED LINE SUBSCRIPTION

2008

GROWTH

(%)

LEVANT 17,352,442 18,691,900 7.72%

GCC 6,601,865 7,068,038 7.06%

NORTH AFRICA 7,252,926 8,827,788 21.71%

SUDAN & YEMEN 1,367,188 1,693,622 23.88%TO T A L 32,574,421 36,281,348 11.38%


FixeLine Subscription by Region, 2007

22.27%

4.20%20.27%

53.27%


FixedLine Subscription by Region, 2008

24.33%

4.67%

19.48%

51.52%




19/88

19


MOB ILE -TO -F IXED L I NE SUB S CRIB ERS

According to recent industry reports, fixed line

subscribers and revenues worldwide have been

falling, partly due to increased mobile

substitution. The need for stationary landlines for

voice has been replaced by roamable, reachable

and convenient mobile phones. This notion mixed

with the general concurrent stagnation of fixed

line markets in the Arab world has contributed to

a phenomenal rise in mobile phone subscriptions

across the Arab world and to a higher mobile-to-

fixed-line ratio in all MENA countries. Fixed line

subscribers growth in the MENA region was only

11.38% compared to 25.03% mobile growth in

2008, resulting in a ratio of 6.03 (i.e. 6.03 mobile

phone subscriptions for every fixed line

subscription), rising from 5.23 in 2007.

Keeping its 2007 record, Sudan had the highest

ratio in 2008, at 32.08 mobile phone subscriptions

for every fixed line subscription. Sudan can be

seen as a vastly underexploited country in terms

of fixed line, mobile and Internet use, with much

potential for growth.

Oman ranked second this year with an 11.74 ratio,

while Jordan ranked third with 10.48. Comparingthe growth rates of both these countries in fixed

line and mobile phone subscriptions shows that

mobile growth supersedes fixed line growth.

Mobile-to-Fixed line susbscribers, 2008

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Egypt

SaudiArabia

Algeria

Morocco

Iraq

Sudan

UAE

Tunisia

Syria

Libya

Yemen

Jordan

Kuwait

Oman

Palestine

Qatar

Bahrain

Lebanon

Mobile FixedLines

M O B I L E- T O - F I X E D L I N E

S U B S C R I B E R S , 2 0 07 - 20 0 8

( R A N K E D B Y R A T I O )

RANK COUNTRY 2008 20071 Sudan 32.08 16.99

2 Oman 11.74 8.98

3 Jordan 10.48 9.86

4 Iraq 10.42 5.36

5 Saudi Arabia 8.75 8.54

6 Libya 7.97 7.10

7 Morocco 7.63 5.21

8 Qatar 7.39 5.48

9 Algeria 7.33 8.37

10 Tunisia 6.79 5.68

11 Bahrain 6.59 9.13

12 Kuwait 6.18 4.98

13 UAE 6.15 6.16

14 Palestine 5.66 4.02

15 Yemen 4.53 2.62

16 Egypt 3.74 9.33

17 Lebanon 2.72 1.75

18 Syria 2.14 1.87

TO T A L 6.03 5.23



20/88

20


A 9.66 mobile-to-fixed line subscriptions ratio in Libya, which ranked it second in the Arab

world in 2007, dropped to 7.97 in 2008. GPTC (General Posts and Telecommunications

Company) has expanded landline coverage to many parts of Libya, suggesting higher fixed line

growth rates over mobile phones. Saudi Arabia had a higher ratio of 8.75 compared to 7.10 in

2007 indicating a far healthier growth in mobile phones over fixed lines.

Egypt also made strong gains in the mobile phone to fixed line ratio, raising the ratio from

2.62 in 2007 to 3.74 mobile phones for every fixed line subscription in the country. The gap

between the two indicators widened significantly in Qatar, with the countrys mobile phone

to fixed line ratio rising from 5.21 in 2007 to 7.39 in 2008. Meanwhile, the lowest mobile

phone to fixed line ratio was recorded in Syria and Lebanon, which respectively have 2.14 and

2.72 mobile phones for every fixed line subscription. Both ratios, however, represented an

increase over 2007 ratios. The average across the 18 Arab countries surveyed for the study

was 5.23 mobile phones for every fixed-line subscription, rising from 4.06 in 2006.

IN TERN ET US ERS

The total number of Internet users in the 18

Arab economies under study is rising quickly.

Annual growth rate are of the order of 20%

and sometimes as high as 30%. Internet users

from the 18 Arab countries in 2008 was

52,698,411, rising at a rate of 33.76% over

the 2007 figure of 39,408,690. The most

recent and highest growth rates are taking

place in emerging markets with high

population and relatively low penetrationrates.

Internet user growth is being driven by steady

progress shown in traditionally low-

penetrated countries, such as Iraq, Egypt and

Syria, there is also considerable gap between

countries with UAE at the high end and

Yemen at the low end. Considering the

compounded annual growth rate (CAGR) of

61.8% for the past 4 years, Iraq registered the

strongest growth in Internet users in 2008, at55% for a total of 3,084,500 users. Egypt

ranked second in terms of growth, with

Internet users rising by a 45.82% to register

12,570,000 by end 2008. In third place in the

MENA region in terms of growth, Syria

recorded 43% growth in Internet users from

2,400,000 in 2007 to 3,432,000.

I N T E R N E T G R O W T H F O R A R A B

C O U N T R I E S 2 0 0 8

RANK COUNTRYINTERNET

USERSGROWTH (%)

1 Iraq 3,084,500 55.00%

2 Egypt 12,570,000 45.82%

3 Syria 3,432,000 43.00%

4 Sudan 3,479,000 42.00%

5 Qatar 592,200 41.00%

6 Yemen 1,570,800 40.00%

7 Oman 540,150 38.50%

8 Bahrain 435,600 32.00%

9 UAE 3,353,600 31.00%

10 Jordan 1,441,000 31.00%

11 Algeria 3,965,000 30.00%

12 Lebanon 1,196,800 28.00%

13Saudi

Arabia 7,936,000 24.00%

14 Kuwait 1,272,433 21.18%15 Tunisia 2,066,628 20.00%

16 Libya 966,000 20.00%

17 Morocco 4,200,000 20.00%

18 Palestine 596,700 8.00%

TO T A L 52,698,411 33.76%



21/88

21


The bottom five countries in the region in terms of growth were Kuwait (14), Tunisia (15th

place), Libya (16), Morocco (17), and

Palestine (18). The latter had registered

modest single digit growth of 8% in 2008, its

Internet users rising from 552,500 in 2007 to

596,700 in 2008. The remaining countries all

registered double digit growth, albeit modest

in most cases when compared to last year. In

total, ten countries grew at a rate lower than

the Arab average of 31.69%, including the

United Arab Emirates, Jordan, Saudi Arabia,

Algeria and Lebanon, as well as the five

countries at the bottom of the index. A

significant reason considered by industry

analyst for the stagnant growth of Internet

users in with some parts of the Arab regions

have been the lack of sufficient websites inArabic languages and the problems

associated with displaying Arabic language

scripts with certain international web

software. Lack of available content in regional

languages prevents the Internet from being a

part of everyday life hindering growth and

penetration rates.

Average Internet penetration for the 18

MENA economies this year was higher from

the previous 12.16% at 15.95%. As in pastyears, the UAE topped the index with deeper

penetration of 45.7% than the 37.79% of

2007, followed by Qatar in second place with

I N T E R N E T P E N E T R A T I O N F O R A R A B

C O U N T R I E S 2 0 0 8

RANK

COUNTRY

INTERNET

USERS PENETRATION

1 UAE 3,353,600 45.70%

2 Qatar 592,200 38.11%

3 Bahrain 435,600 37.68%

4 Kuwait 1,272,433 36.97%

5Saudi

Arabia7,936,000 31.44%

6 Lebanon 1,196,800 28.43%

7 Jordan 1,441,000 24.63%

8 Tunisia 2,066,628 19.92%

9 Oman 540,150 17.93%

10 Syria 3,432,000 17.26%

11 Egypt 12,570,000 16.53%

12 Libya 966,000 15.20%

13 Palestine 596,700 14.17%

14 Morocco 4,200,000 13.40%

15 Algeria 3,965,000 11.45%

16 Iraq 3,084,500 10.09%

17 Sudan 3,479,000 8.32%

18 Yemen 1,570,800 6.76%

TO T A L 52,698,411 15.95


Internet Users Penetration , 2008

0%

5%

10%

15%20%

25%

30%

35%

40%

45%

50%

UAE

Qatar

Bahrain

Kuwait

SaudiArabia

Lebanon

Jordan

Tunisia

Oman

Syria

Egypt

Libya

Palestine

Morocco

Algeria

Iraq

Sudan

Yemen


22/88

22


38.11% penetration. Hot on the heels of Qatar is Bahrain, which recorded 37.68% Internet

penetration in 2008, followed by Kuwait with 36.97%. Saudi Arabia rounded off the top five,

with Internet penetration at 31.44%.

At the other end of the scale, Yemen registered 6.76% Internet penetration, the lowest in the

Arab world, ranking the country in 18th place on the indicator. Faring slightly better, Sudans

penetration rate of 8.32% ranked it in 17th place among the MENA economies. Sudan and

Yemen were the only two countries on the index to register a single digit growth in 2008.

While Iraq ranked in 16th place with 10.09% penetration and Algeria ranking itself in 15th

place. Morocco crossed its 10% mark of 2006, registering an Internet penetration rate of

11.15% in 2007, and 13.40% in 2008 to rank in 14th place.

There was not much of a difference in regional growth levels in 2008 from 2007, with Internet

users in the Gulf Cooperation Council countries rising by 26.73% (14,129,983 users), to 23.36%

growth in North Africa (11,197,628 users). Levant registered stronger growth, at 43.11% in

2008, to bring the number of Internet users up to 22,321,000. However, the year-on-year

growth rates for each region represented a dramatic increase. Overall, Internet users in the

MENA region grew by 33.76% in 2008.

I N T E R N E T U S E R S B Y R E G I O N , 2 0 07 - 20 0 8

COUNTRY INTERNET USERS 2007 INTERNET USERS 2008GROWTH

(%)

LEVANT 15,597,500 22,321,000 43.11%

YEMEN & SUDAN 3,572,000 5,049,800 41.37%

GCC 11,150,000 14,129,983 26.73%

NORTH AFRICA 9,077,190 11,197,628 23.36%

T O T A L 39,408,690 52,698,411 33.76%Source: Madar Research


23/88

23


COMPUTER IN S TALLED BASE

C O M P U T E R I N S T A L L E D B A S E F O R AR A B

C O U N T R I E S 2 0 0 8

RANK COUNTRYCOMPUTER

INSTALLED BASE GROWTH (%)

1 Iraq 1,337,050 43.00%

2 Qatar 498,080 41.50%

3 Libya 729,675 41.00%

4 UAE 2,475,451 39.00%

5 Bahrain 407,100 38.00%

6 Kuwait 1,021,614 38.00%

7 Algeria 2,000,700 35.00%

8Saudi

Arabia 4,755,392 34.00%

9 Yemen 592,551 32.03%

10 Oman 416,000 30.00%

11 Syria 1,430,000 30.00%

12 Egypt 4,295,590 30.00%

13 Sudan 1,292,562 19.68%

14 Tunisia 902,521 17.59%

15 Lebanon 674,360 15.00%

16 Jordan 814,660 15.00%

17 Morocco 1,904,000 12.00%

18 Palestine 210,993 5.55%

TO T A L 25,758,299 29.65%


The computer installed base in MENA economies rose to 29.65% from the 20.88% in 2007 to

reach 25,758,299 from 19,866,800 the year before. Growth in the number of installed

computers achieved to reach heights beyond those of 2007, with 12 countries recording 30%

or more growth on the indicator in 2008. Iraq ranked first in the Arab world in terms of

growth, its computer installed base rising 43% to 1,337,050, followed by Qatar, recorded

41.5% growth in its computer installed base to reach 498,050 computers from 352,000

previously. Libya ranked third with 41% growth followed by UAE (39%) and Bahrain (38%).

Meanwhile Palestine and Morocco recorded the lowest growth rates in the MENA region with

Palestine projecting a single digit growth of 5.5% with 210,993 installed computers in 2008.

Morocco is preceded by Jordan with 814,660 computers and ranking 16th on the index,

registering 15% growth. Tunisia and Lebanon rounded up the bottom five countries, ranking in

14thand 15thplace respectively.

Bahrain led the region in terms of computer penetration in 2008, with 35.21% (407,100

computers). However the previous title holder UAE is hot on heels of Bahrain with 33.73%

computer penetration. Qatar ranked third this time pushing Kuwait fourth with 32.06%

C O M P U T E R I N S T A L L E D B A S E F O R A R A B

C O U N T R I E S 2 0 0 8

RANK COUNTRY

COMPUTER

INSTALLED BASE PENETRATION

1 Bahrain 407,100 35.21%

2 UAE 2,475,451 33.73%

3 Qatar 498,080 32.06%

4 Kuwait 1,021,614 29.68%

5Saudi

Arabia4,755,392 18.84%

6 Lebanon 674,360 16.02%

7 Jordan 814,660 13.93%

8 Oman 416,000 13.81%

9 Libya 729,675 11.48%

10 Tunisia 902,521 8.70%

11 Syria 1,430,000 7.19%

12 Morocco 1,904,000 6.07%

13 Algeria 2,000,700 5.78%

14 Egypt 4,295,590 5.65%

15 Palestine 210,993 5.01%

16 Iraq 1,337,050 4.37%

17 Sudan 1,292,562 3.09%

18 Yemen 592,551 2.55%

TO T A L 25,758,299 7.8%



24/88

24


penetration, while Kuwait only 29.68%. In fifth place, Saudi Arabia fell below the 20% mark,

registering only 18.84% penetration in 2008. Nine countries from the MENA region recorded a

penetration rate below 10%, including Tunisia (8.70%), Syria (7.19%), Morocco (6.07%),

Algeria (5.78%), Egypt (5.65%), Palestine (5.01%), Iraq (4.37%), Sudan (3.09%) and Yemen

(2.55%). The latter is the least penetrated country in the region in terms of computer installed

base

The Gulf Cooperation Councils computer installed base grew by 36.05%, the fastest growing

region in the Arab world in 2008, followed by Levant countries. The latter recorded 28.22%

growth in its computer installed base (8,762,653), while the North Africa, Yemen and Sudan

recorded fractionally slower growth at 23.95% and 23.31%.

C O M P U T E R I N S T A L L E D B A S E B Y R E G I O N , 2 00 7 -2 00 8

COUNTRY PC INSTALLED BASE 2008 PC INSTALLED BASE 2007 GROWTH (%)

GCC 9,573,637 7,037,000 36.05%

LEVANT 8,762,653 6,834,000 28.22%

NORTH AFRICA 5,536,896 4,467,000 23.95%

YEMEN & SUDAN 1,885,113 1,528,800 23.31%

TO T A L 25,758,299 19,866,800 29.65%



25/88

25


IN TERN ET US ER TO PC RATIO

As shown in above table, oil-rich countries like the GCC states as well as Libya performed

better than the others in terms of Internet user-to-PC ratio. For example, there are about 1.07

Internet users per PC in Bahrain compared to about 2.93 Internet users per PC in Egypt.

This data further underscores the widespread use of computers provided by PIACs (public

Internet access centers), libraries and education centers for Internet access in non oil

dependent economies such as Yemen, Sudan, Palestine and Egypt.

It should also be noted that the Egyptian Ministry of Information and Communication

Technology (MICT) has initiated several projects in the past including the "Free Internet" and

the "PC for Every Home." However, based on this data, it appears that these initiatives still fallshort of bringing Egypts Internet user-to-PC ratio on par with those found among the richer

Arab countries.

I N T E R N E T U S E R - T O -P C R A T I O , 2 008

COUNTRY RATIO

EGYPT 2.93PALESTINE 2.83

SUDAN 2.69

YEMEN 2.65

SYRIA 2.4

IRAQ 2.31

TUNISIA 2.29

MOROCCO 2.21

ALGERIA 1.98

JORDAN 1.77

LEBANON 1.77

SAUDI ARABIA 1.67

UAE 1.35

LIBYA 1.32

OMAN 1.3

KUWAIT 1.25

QATAR 1.19

BAHRAIN 1.07



26/88

26


IN DEPEN DEN T REG ULATORY AUTHORIT IES AN D L IB ERALIZATION

I N D E P E N D E N T R E G U L A T O R Y A U T H O R I T Y & C O M P E T I T I O N

COUNTRY REGULATOR

INDEPENDENT

REGULATORYAUTHORITY

FIXED LINE

SECTOR

MOBILE

PHONESECTOR

INTERNET

SERVICEPROVISION

ALGERIAAutorit de rgulation de la

poste et des

tlcommunications (ARPT)

BAHRAINTelecommunications Regulatory

Authority (TRA)

EGYPTNational Telecommunication

Regulatory Authority (NTRA) x

IRAQ Ministry of Communications

JORDANTelecommunications Regulatory

Commission (TRC)

KUWAIT Ministry of Communications x x

LEBANONTelecommunications Regulatory

Authority x

LIBYA

Libyan Post

Telecommunications and

Information Technology

Company

x x

MOROCCOAgence Nationale de

Rglementation des

Tlcommunications (ANRT)

OMANTelecommunications Regulatory

Authority (TRA) of Oman x

PALESTINEMinistry of Telecom &

Information Technologyx x x

QATAR

Supreme Council for

Information and

Communications Technology

(ictQATAR)

x x

SAUDI

ARABIA

Communication and

Information Technology

Commission x

SUDANNational Telecommunications

Corporation (NTC)

SYRIASyrian Telecommunication

Establishment (STE)x x

TUNISIAMinistry of Communication

Technologies x

UAETelecommunications Regulatory

Authority (TRA)

YEMENMinistry of Telecommunication

& Information Technologyx x



27/88

27


Independent regulatory authorities are national bodies established to oversee and decide

upon many or all aspects of telecommunications policy in markets that are already

competitive or being prepared for liberalization. They set strategic priorities and create the

regulations needed to implement them, whether the subject is managing numbers and radio

frequencies, licensing new or incumbent (including state-owned) operators, or deciding on

the minimum service, capacity and coverage required of them. They may also set or cap prices

or throw them open to competition. At the end of 2008, 13 of the 18 MENA economies

surveyed for this study possessed independent regulatory bodies. Despite its establishment in

July 2002, Lebanons Telecommunications Regulatory Authority began its operations in

February 2007, following a protracted process to elect a board of commissioners and appoint

a chairman.

Regulatory functions in the five countries that lack an independent telecommunications

regulatory authority are carried out by telecommunication ministries and government-owned

incumbent providers. In Yemen and Palestine, the Ministry of Telecommunications and

Information Technology holds sway over the sector, as does the Ministry of Communication in

Kuwait, while in Libya and Syria, the General Post and Telecommunications Company and the

Syrian Telecommunications Establishment govern their respective telecommunications sector,respectively.

There are strong indications that Kuwait, currently the only Gulf Cooperation Council state

without an independent regulatory authority, will move to establish one before long, given

the fact that the government retains a minority interest in all three of the countrys mobile

phone operators (including newly licensed Kuwait Telecommunications Company) and is the

sole fixed line provider in the in the country through the Ministry of Communications.

All 18 Arab countries have liberalized their Internet services provision sector, one of the first

sectors in most countries to be liberalized. Meanwhile, only Palestine and Qatar remained

monopolies in the mobile phone sector in 2008. However, both awarded second mobilephone licenses in 2007 and 2008, respectively, with the news operators expected to enter the

market in early 2009, thus bringing to a close exclusivity in the mobile phone sector in the

MENA region.

The fixed line sector remains a monopoly in many Arab countries, with fixed line services

usually provided by state-owned incumbent operators. However, seven countries have

introduced competition into their fixed line sectors, with new fixed line providers providing

services either through wireless fixed line technologies or by purchasing wholesale services

through the incumbent providers existing network.


28/88

28


C O U N T R Y I C T P R O F I L E S :

GULF CORPORATION COUN CIL COUN TRIES

Similar to last year five of the six Gulf Cooperation Council states once again led the MENA

region in the 2008 ICT Use Index, with the UAE taking the top spot on two indicators and the

remaining two were held by Saudi Arabia and Bahrain. The UAE took a commanding lead,

scoring 2.39 on the index, followed by Bahrain (2.18), Qatar (2.12), Saudi Arabia (2.09) and

Kuwait (1.81). With a score of 1.48, Oman placed 6th in the GCC, and 7th in the Arab world

overall. All six countries scored above the 1.00 mark on the ICT Use Index, with the average

score for the region at 2.08 from the 1.70 in 2007. To reiterate, growth is difficult to calculate

for the region and other countries in the Arab world in 2007, given the fact that a number of

indicators for 2006 and 2007 were corrected or adjusted by the service providers, in addition

to major corrections in population figures made by some of the Gulf Cooperation Council

countries in particular.

The Gulf Cooperation Council recorded an average of 134.49% in 2008 an increase of 22.5%

from the 109.78% mobile phone penetration in 2007, with Internet penetration a far second

at 33.83%. Overall computer penetration registered 22.94%, with the lowest penetration

witnessed in the region still recorded in fixed line penetration at 16.93% which was almost

same as the 2007 penetration rate of 16.54%.

I CT P E N E T R A T I O N I N GC C 20 0 8

RANK COUNTRYFIXED LINE

PENETRATION

MOBILE PHONE

PENETRATION

INTERNET

PENETRATION

COMPUTER

PENETRATION

ICTUSE

INDEX

1 UAE 22.35% 137.35% 45.70% 33.73% 2.39

2 Bahrain 19.06% 125.68% 37.68% 35.21% 2.18

3 Qatar 16.95% 125.27% 38.11% 32.06% 2.12

4

Saudi

Arabia 16.34% 142.87% 31.44% 18.84% 2.09

5 Kuwait 15.90% 98.28% 36.97% 29.68% 1.816 Oman 9.10% 106.86% 17.93% 13.81% 1.48

T O T A L 16.93% 134.49% 33.83% 22.94% 2.08



29/88

29


BA H R A I N:

Bahrain Mobile Operator Market Share , 2007

40.14%

59.86%

Batelco Zain

Bahrain Mobile Operator Market Share , 2008

47.21%

52.79%

Batelco Zain


As of December 2007 TRA has issued 152 licenses to 68 companies. Out of these 68

companies, 16 operators currently provide telecommunications services in Bahrain. Bahrain

ranked second overall on the 2008 Arab ICT Use Index, it has also ranked second among GCC

economies and third for mobile phone penetration among MENA economies, behind United

Arab Emirates and Saudi Arabia. The number of mobile phone subscribers has increased quite

steadily since its inception in 2002. Mobile phone subscriptions outnumber fixed lines, at 6.59

mobile subscriptions for every fixed line.

The countrys two dominant mobile operators, Batelco (Bahrain TelecommunicationsCompany) and Zain (formerly MTC-Vodafone, rebranded in September 2007) saw their total

subscribers reach over 1.4 million in 2008, up 30% from 1.11 million subscribers in 2007. The

countrys mobile phone sector grew at a compound annual growth rate (CAGR) of 22.3% over

the period 2004 to 2008. The countrys former telecom monopoly, Batelco, continues to

dominate the market with some 767,000 subscribers in 2008. However, its market share

showed a decline of 7% in 2008, falling from 59.86% to 52.79%, with Zains share rising to

47.21% from 40.14%. The latters subscriber base grew at a phenomenal rate of 53.1% over

end 2008. In December 2008 mobile penetration in Bahrain was calculated to be 125.68%,

C O U N T R Y I C T P R O F I L E B A H R A I N

INDICATOR 2004 2005 2006 2007 2008

Fixed Line Subscriptions 191,553 193,520 194,196 203,500 220,386Mobile Phone

Subscriptions649,764 767,103 907,433 1,116,000 1,453,000

Batelco 544,696 565,103 674,433 668,000 767,000

Zain (MTC

Vodafone)105,068 202,000 233,000 448,000 686,000

Internet Users 202,500 228,000 268,000 330,000 435,600

Computer Installed Base 145,000 175,000 225,000 295,000 407,100



30/88

30


which could be seen as one of the highest among the GCC countries. Prepaid mobile phone

subscribers represent 84% of the subscribers at the end of 2008, with 1,220,163 prepaid

subscribers and 232,619 postpaid subscribers.

635,277

756,268

923,702

1,220,163

232,619192,277

151,165131,826

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2005 2006 2007 2008

Prepaid Postpaid

In a move designed to stimulate competition in the kingdom, the countrys

Telecommunications Regulatory Authority (TRA) had invited bids for Bahrains third mobile

phone license in September 2008. Six companies had expressed their interest in competing

for the license. Among the interested bidders on May 2009 TRA selected the Saudi Telecom

Company with a bid capital of Bahraini Dinars 86.69 million (230 million US$), and handed

over its 3rd mobile license to STC, in a step that symbolizes the official closure of the 3rd

mobile operators license auction process. STC soon established STC Bahrain B.S.C (c) to be

the licensed operator for Bahrain.

The countrys regulator is also currently working on a regulatory framework for mobile and

fixed line number portability. Number portability is set to be introduced during Q1, 2009. The

regulator is also seeking services from consultancy firms to design, build and operate a

Broadband quality of service testing platform in order to continuously measure the

broadband services of all Internet licensed providers in Bahrain. These performance

measurements would assist TRA in validating whether the broadband qualities of service

(QoS) data provided by Internet providers are based on international best practices. TRA in

Bahrain is also planning to address the issue of overly high tariffs for mobile roaming within

the Arab Region.

Bahrain perhaps was the first country in the region to liberalize all aspects of telecoms.

Bahrains fixed line sector was liberalized in 2005, when two new service providers were

granted fixed line licenses, to operate alongside Batelco, the incumbent operator. The

countrys fixed line market grew 4.79% in 2007, to register 203,500 subscribers, from 194,196

at end 2006. By the end of 2008, there were 220,386 fixed lines compared to 203,500 in 2007,

indicating fixed line growth of 8.3% due to growth of fixed wireless. Fixed telephony lines

consist of 206,301 PSTN and 14,085 Wireless (only 1,072 in 2007). The resulting penetration


31/88

31


rate for fixed lines is 19.06%, the second highest rate in the GCC, behind the United Arab

Emirates.

In 2008, Bahrain recorded a 32% rise in Internet users, registering 435,600 users over 2007s

330,000. According to the TRA, from the 114,502 Internet subscribers there were 109,994

broad band Internet subscribers and about 4,508 dial up subscribers. There were 101,961

residential broadband Internet subscribers in Bahrain by end of 2008, and 8,033 business

subscribers. Broadband subscribers accounted for 96%, with the remainder representing

dialup subscribers. These are serviced by 10 Internet service providers, namely, Batelco,

Mena, 2Connect, Etisalcom, Kalaam, Lightspeed, Northstar, Zain, Nuetel and Orbit. The ten

offer four types of Internet services: dialup, wired broadband, wireless broadband and mobile

broadband. Notably, there are 22 licensed Internet service providers in the kingdom, but

many of the licenses acquired (including those for fixed line services, international

telecommunication services and others) remain inactive.

Bahrains computer installed base, meanwhile, grew by 38%, to register 407,100 computers in

2008, up from 295,000 in 2007. This has resulted in a healthy computer penetration rate of

35%.

KUWAIT

C O U N T R Y IC T P R O F I L E K U W A I T

INDICATOR 2004 2005 2006 2007 2008

Fixed Line Subscriptions 496,973 504,806 517,000 517,300 547,111

Mobile Phone

Subscriptions2,109,700 2,277,000 2,529,679 2,773,688 3,382,733

Zain-Kuwait1,262,423 1,331,189 1,461,000 1,576,000 1,769,000

Wataniya 847,277 945,811 1,068,679 1,197,688 1,313,733

Viva _ _ _ _ 300,000

Internet Users 590,000 715,000 870,000 1,050,000 1,272,433

Computer Installed Base 450,000 510,000 600,000 740,300 1,021,614


Kuwait Mobile Operator Market Share , 2007

43.18%

56.82%

Zain Wataniya

Kuwait Mobile Operator Market Share , 2008

8.87%

38.84%

52.29%

Zain Wataniya Viva



32/88

32


Possessing one of the oldest mobile markets in the Arab world, Kuwaits current subscriber

growth of 21.96% compared to the low 9.65% growth of last year could be attributed to the

introduction of a third GSM mobile network in Kuwait, Viva. With 1,769,000 and 1,313,733

subscribers respectively, the countrys two mobile operators, Zain (rebranded from MTC

Group in September 2007) and Wataniya Telecom, ended 2008 with market shares (52.29%

and 38.84%) much lower than those in their prevailing years of December 2007 (56.82% and

43.18%), 2006 (57.75% and 42.25%) and 2005 (60.27% and 39.74%). As mentioned previously

the decline in the market shares of the countrys two dominant mobile operators maybe

attributed to the newly branded GSM mobile operator, which has the lost 8.87% (300,000

subscribers) market share. The mobile phone subscribers in the country grew at an annual

compounded growth rate (CAGR) of 12.5% from a period of 2004 to 2008. Kuwait ranked fifth

on the current Arab ICT use index behind Saudi Arabia.

Moreover, as indicated by the triple-digit mobile penetration rates of the UAE, Bahrain, Qatar

and Saudi Arabia, market saturation is unlikely to be the root cause of Kuwait inability to

advance. According to analysts, in spite of a third operator Viva, venturing into the Kuwait

telecommunication market, its mobile penetration rate is still below 100%, which is low when

compared to its surrounding GCC countries, especially UAE that has 137% penetration. TheMobile penetration rates in Kuwait is ranked 8th among the Arab countries.

A consortium led by Saudi Telecom won the countrys third mobile phone license in

November 2007 at a cost of US$913 million, beating other bidders that included Emirates

Telecommunications Corporation (Etisalat), Dhow Communications (consortium comprising

Kuwait Cable Vision and Iraq Holding), Batelco Kuwait (consortium comprising Bahrain

Telecommunications Company and Investment Dar), Turkcell, Kuwait Finance House, Global

Investment House and a consortium comprising Noor Financial Investment Company, Petra

Jordanian Mobile Telecommunication Company and the Commercial Bank of Kuwait.

Kuwait Telecommunications Company was established in June 2008, and in August launchedan initial public offering (IPO) open only to Kuwaiti citizens for 50% share of the company.

These shares had received the highest subscription in the history of Kuwait. A total of 915,009

people subscribed to Kuwait Telecommunications Companys VIVA, 843,300,500 shares from

August 24 to September 18, 2008, at a lump sum of KD 88.54 million, covering the value of

shares by 3,339 times. The company capital was set at KD 50 millions for 500 million shares,

50 percent of which is reserved for the founding members; such as the Kuwait Investment

Authority, 6 percent, and the Public Authority for Social Security 6 percent. Other founding

members include Zakat House, Awkaf General Secretariat and Public Authority for the Minors'

Affairs, each of which owns 4 percent of the shares. The mother company, STC, has the lion's

share, 26 percent of the total amount of shares.

In another important development in the Kuwaiti mobile phone sector, Qatars state-owned

telecommunications provider Qtel purchased a 51% stake in Wataniya Telecom previously

held by Kuwait Projects Company (KIPCO) in March 2007. The deal, worth US$3.80 billion, was

touted as the largest private-sector transaction in Kuwaits history, as well as the largest

telecommunications deal in the Arab world.

Kuwait remains the only GCC country without an independent telecommunications regulatory

authority, with the Ministry of Communications taking on a temp role at present. However,

given that the government retains a minority interest in Kuwait Telecommunications


33/88


34/88

34


Oman ranked 7th overall on the 2008 Arab ICT Use Index with a score of 1.48, from 1.23 in

2007. The countrys overall growth was driven by sustained growth in mobile phone

subscriptions, Internet users and computer installed base. Mobile phone subscriptions grew

at a compound annual growth rate (CAGR) of 41.1% over the period 2004 to 2008, while

Internet users grew at a CAGR of 25.18% over the same period and computer installed base

by 26.98%.

Omans Telecommunications Regulatory Authority was established in 2002 to pave the way

for the liberalization of the telecommunications sector. In 2004, it issued a 15-year license for

the provision of mobile phone services to Oman Mobile, a subsidiary of incumbent Oman

Telecommunications Company (Omantel), which migrated its own mobile subscribers to the

new company. The following year, the Omani Qatari Telecommunication Company, 55%-

owned by Qtel (with the balance going to the Omani government and a Danish concern),

received a similar license, launching in March 2006 under the brand name Nawras and

offering 3G services before the year was out.

The countrys mobile phone sector has maintained steady growth since the introduction of

competition in the country, with mobile phone subscriptions rising by 37.52% in 2007,compared to 36.37% in 2006. However Omans mobile phone subscription in 2008 was lower

in growth compared to its previous years at 28.79%. Total subscriptions by end 2008

numbered over 3.2 million, with Oman Mobile retaining its market lead, at 53.08% market

share. However, the mobile phone operator lost considerable market share with the rise of

the second operator Nawras, whose market share rose to 46.92% from 40.68% in 2007.

Nawras subscriber base had only 48.56% growth in 2008 compared to the phenomenal

77.80% growth of 2007, Nawras registered about 493,865 new subscribers in 2008 bringing

the subscribers base grand total to just over 1.5 million subscribers by the end of 2008. Oman

net Mobiles subscriber base didnt elevate much as well in 2008, the subscriber base had only

15.23% growth compared to the 19.03% of 2007.A complete commercial launch of the all new

3.5G network for Oman Mobile was done on March 2009. This new scalable network serviceprovided by Oman Mobile would support the bandwidth hungry services of the future. Almost

89.9% or 2,895,053 mobile users have prepaid subscriptions and only 10% have postpaid

subscriptions.

2,206,493

2,895,053

324,812293,622

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2007 2008

Prepaid Postpaid


35/88

35


Meanwhile, Oman Mobile also became the very first company in Middle East region to grant

resale rights to firms using its infrastructure. The telecom company has signed contracts with

two new mobile operators Renna and FRiENDi allowing them to resell mobile services to

subscribers across Oman using their own brands and marketing and sales channels. The UAE

based FRiENDi mobile, the first mobile virtual network operator (MVNO) in the Middle East

and the Sultanate's first mobile reseller went live on April 2009 and its rival the fully Omani

owned MVNO operator Renna on May 2009. Both firms are focusing on transforming the

telecommunication industry in Oman by providing value added products and services to its

customers. Oman became the first country in the region to have adopted a Mobile Virtual

Network Operator (MVNO) business model.

Omans overall growth in subscriptions (fourth highest rate among GCC) reflected strongly on

the countrys mobile phone penetration rate, which rose to 106.86%, a rate appreciably

higher than the 87.78% attained by end 2007.

In mid-2006, Nawras and Oman Mobile became the first in the region to implement mobile

number portability (MNP), which enables subscribers to port their mobile number from oneoperator to the other. By end 2007, some 24,000 subscribers had been ported between the

two mobile phone service providers. As one of the Sultanates first 3G implementer, Nawras

also has plans to invest in the latest generation fiber optic backbone and WiMAX wireless

access networks across Oman. In the first two years of its plan, Nawras will expand the

wireless broadband service to five governorates and 14 states.

Omans overall fixed line subscriptions registered a drop in 2007, falling 0.61% from 269,700

in 2006 to 268,085 subscriptions however, during 2008 the fixed line subscription registered a

skimpy growth of 2.28% with 274,178 subscribers, far better than the previous years negative

growth rate. From the 274,178 subscribers there are 220,169 postpaid subscribers and 47,306

prepaid subscribers along with 6,703 payphones. Omantel began developing a Wireless LocalLoop (WLL) network in 2005 to bring fixed-line services to approximately 200 villages in rural

areas where cable connectivity was impractical because of rough terrain or prohibitively high

cost or where the existing fixed-line network was unable to support new broadband

technology. Omans WLL subscriptions by end 2007 numbered 19,950 and are reflected in the

countrys fixed line subscription figure. Meanwhile, Omans fixed line penetration rate also

dropped, falling from 10.22% in 2006 to 9.77% in 2007 and finally to 9.10% in 2008.

Omantel was the sole provider of fixed line services in the country until 2007. Omantel lost its

monopoly in this sector by the end of 2008, when a new fixed-line operator entered the fray.

Nawras Consortium (70 percent owned by Qatar Telecom) won the license to set up Oman's

second fixed-line network. Oman had shortlisted six bidders for the licence. While earlier itnamed a consortium led by Hong Kong operator PCCW-Awaser Oman as the top bidder, the

regulator later dropped this group as it could not meet all the tender conditions. The award to

Nawras ends the monopoly of Omantel as the Sultanate liberalises the sector as part of

efforts to encourage foreign investment to counter falling oil production. The 25 year

renewable license is part of a package that includes a 15 year license for broadband Internet

services, renewable for another 10 years

However, Omantel has been gearing up for the competition. The company has developed

several plans and strategies to maintain its position as the leading provider of integrated


36/88

36


telecom services in the Sultanate. In August, the company announced a new tariff scheme for

national and international fixed line calls, as well as the upcoming launch of Voice over

Internet Protocol (VoIP)

Documents

Arab ICT Use Report 2009