Mobile penetration in the region varies enormously from country to country. The variations can partly be explained by differences in wealth and economic development and market competition but not entirely. Government policy is also a major factor. In Lebanon the Government specifically limited the maximum number of subscribers of the operators of two BOT contracts who established services in the mid-1990s. These BOT contracts were terminated in June 2001 and since then disputes with the operators, failed attempts to sell licences and failure within the government to agree on policy have stalled the market.
Iran, Syria, Iraq and Yemen have dramatically low numbers of mobile subscribers. In the case of Yemen low economic development is the main cause but numbers are growing. Iraq had no mobile service before the second Gulf War in 2003. Three licences were awarded in late 2003 and all three operators have launched services. Subscriber numbers are now expected to grow quickly. Services in Iran have been limited by infrastructure capacity problems and again subscriber numbers could grow quickly once the Irancell consortium led by Turkcell, the winner of a recent licence tender, starts operations. There are no major market structure changes under-way in Syria but the introduction of prepaid services in late 2003 may lead to growth.
Change is on the way in the mobile markets of the Middle East, most of which have not been characterised by either a high degree of competition or privately owned operators. Oman and Saudi Arabia are currently engaged in selling a second GSM licence, a second licence was awarded by Iran to a consortium led by Turkcell in February 2004, three licences were awarded for Iraq in late 2003 and Bahrain awarded a second licence in April 2003. Jordan has begun proceedings to auction a third licence. Yemen is also planning to award a third licence but its low economic development would suggest it might not be highly sought after. Kuwait, Jordan and the Yemen have had two players in their mobile markets for some years. Israel has three major operators and one smaller operators. Turkey has three mobile operators.
Kuwait’s two mobile operators, Mobile Telecommunications Co (operating as MTC Vodafone – it has a partner agreement with Vodafone Group plc) and National Mobile Telecommunication Co (operating as Wataniya Telecom) have been winners of new licences in the region. Both were part of winning consortia for Iraq’s licences and MTC Vodafone was the major investor in the consortium that won the Bahrain second licence. In addition MTC Vodafone owns one of the Jordanian operators and been reported as winning one of the management contracts for Lebanon.
Whilst there has been some investment by operators from outside the region, it has not been extensive.
Etisalat of the UAE launched 3G services in December 2003, the first Middle Eastern operator to do so, branded Mubashir. Etisalat’s Universal Mobile Telecommunication System (UMTS) network was provided by Huawei Technologies with a US$16 million contract. The service was initially available only in major cities with the first phase, completed in March 2004, able to support up to 160,000 subscribers.
Operators in Israel are well advanced with preparations to launch 3G services. Both Partner Communications and Cellcom have awarded contracts to build 3G UMTS networks. PelePhone launched the first phase of a CDMA-1x network in June 2003, covering most of Israel’s urban areas. It also intends to launch 3G services in the second half of 2004, using Evolution Data Optimised (EVDO) technology.
MTC Vodafone Bahrain included EDGE services at its launch in December 2003.
The Middle East is a major market for satellite mobile services, particularly through UAE-based Thuraya Satellite Telecommunications Oil companies and other personnel working in remote areas make up many of the subscriber numbers but in the aftermath of the 2003 war Iraq has been the major market for satellite mobile. By July 2003, Thuraya had 45,000 subscribers in Iraq, out of its 154,000 subscribers worldwide, and Iraq accounted for 200,000 minutes per day of Thuraya’s daily usage total of 600,000. Iridium and Globalstar are also present in the region.
New report form BuddeComm: Mobile Communications in the Middle East – 2004
Counties covered: Afghanistan, Bahrain, Egypt Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey United Arab Emirates, Yemen. Price US$250.
For more info see: Mobile Communications in the Middle East – 2004
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