Trends & Forecasts

Mid-East fixed-voice and infrastructure analysed by Reportlinker

Major operators in 15 Middle East markets come under the scrutiny of a new analysis from Reportlinker. The countries’ telecoms infrastructure and fixed-voice sector are described and ranked in order of tele-density...

Reportlinker.com has just announced a new market research report related to the broadband industry. Middle Eastern Fixed Voice and Telecommunications Infrastructure Market provides an overview of the fixed-line voice and infrastructure segment of the region’s telecoms markets. The analysis goes on to detail 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.

 In the Middle Eastern region telecommunications infrastructure varies from very advanced to very rudimentary. Several Fibre-to-the-Home (FTTH) projects are under development in Israel and the Gulf countries but in Yemen and Iraq fixed-line penetration is only around 5%. The area is well served with international links via submarine cables.

 At first glance fixed-line tele-density in the Arab Middle East would appear very low, even in the wealthier countries, compared with tele-density rates of around 60% in the USA, for example. However, figures can be misleading due to the larger household sizes compared with Europe or the USA, plus large hostel-accommodated expatriate populations in some countries.

In fact, in many MENA countries household penetration is at or near 100%. Several fixed-line markets are showing decline due to mobile substitution, particularly dramatically in Jordan with its very competitive mobile market.

Other than in Israel, each country has a national fixed-line operator but no other large players in the fixed-line sector. Indeed, even in the more liberalised markets of the Arab Middle East there are as yet no serious competitors to the incumbents but this is beginning to change, first in Bahrain through VoIP and calling-card operators - and later WiMAX operators - and now also in Saudi Arabia, the UAE and Jordan. All fixed-line incumbents also offer mobile services.

Reportlinker presents a table of the top five Middle East countries for fixed-line tele-density in 2008, believing in using whole years for its analytical procedures. Statistics for GDP per capita, numbers of households, fixed-line growth/decrease over 2007, and tele-density are all readily available.

The summary Developing Telecoms has been sent includes some key highlights selected by Reportlinker.

The first such example is Bahrain, where all sectors of the Bahraini communications market have been liberalised. Incumbent Batelco shares the fixed-line market with thirteen(!) other operators providing international calling services using international direct dial, carrier pre-selection or prepaid calling cards; around 50% of international call minutes originating from fixed lines use prepaid calling cards.

Like other Gulf countries, Bahrain has a large expatriate population (approximately 50% of the total) and this has been the cause of the impact of prepaid VoIP-based calling cards on the market and on Batelco’s international call revenues. Infrastructure is described as excellent – Batelco completed the rollout of an NGN in January 2009.

The second example is Saudi Arabia. Fixed-line teledensity (and broadband penetration) are low. Competition has been introduced into the fixed-line market in the 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.

Middle Eastern Fixed Voice and Telecommunications costs approximately US$1,000.

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