2007 Middle East - Telecoms Mobile & Broadband in The Gulf Countries

BuddeComm’s latest Middle East Annual Publication, ‘2007 Telecoms, Mobile and Broadband in the Gulf countries of the Middle East’, profiles the wealthy countries of the GCC, strife-torn Iraq, very poor Yemen and the regulated market of Iran.

There has been a change in atmosphere regarding broadband in the Gulf region over the past year. Internet and broadband penetration rates remain low in many countries, access speeds are relatively slow and tariffs are relatively high compared with other regions in the world, but the wealthier countries are making a strong push to follow in the UAE’s footsteps towards higher broadband penetration.

The mobile market is already very well developed in the wealthier countries of the region. 3G services are widely available. In the more developed markets customers want the latest in high-end handsets and have the income to pay for them.

Several local operators with deep pockets have grown enormously through buying operators and licences, with interests across the Middle East and extending into Africa and West Asia. Three operators are vying for supremacy: Etisalat of the UAE, most of whose subsidiaries are in Africa, MTC of Kuwait and, more recently, Qtel of Qatar. Batelco of Bahrain has also joined the fray but is not yet on the scale of the other three.

This report presents a concise overview of sector liberalisation and privatisation in the region, the development of product offerings for both mobile and broadband technologies, essential operator statistics in all telecom sectors, and the emergence of convergence and triple play.

Key Highlights

• Bahrain has much the most liberalised market in the region. Numerous alternative operators mostly offering prepaid VoIP-based calling cards have had a large impact on the fixed-line market (and on Batelco’s international call revenues). In addition two WiMAX licences were issued in early 2007 to alternative operator Mena Telecom and second mobile operator MTC Vodafone Bahrain. Incumbent Batelco failed to win a licence. For more information, see chapter 1.4.2, page 6.
• Elsewhere VoIP services are generally banned, a particularly contentious issue in the UAE. For more information, see chapter 8.7.2, page 116.
• Broadband growth has taken off in the Gulf countries, Broadband subscribers in Qatar increased nearly 100% during 2006. Subscriber numbers increased by over 50% in Bahrain.
• The UAE has also seen a further 50% growth in broadband subscriber numbers from its already very high household penetration rates of around 60%.
• Bahrain, Kuwait, Qatar and the UAE have some of the highest mobile penetration rates in the world and continue to show surprisingly strong growth going into 2007.
• Mobile penetration has increased dramatically quickly in Iraq but the deteriorating security situation appears to have put a break on growth by mid-2007. For more information, see chapter 3.8.1, page 39.
• All countries in the region with the single exception of Qatar (which plans to issue a second licence by end-2007) now have at least two mobile operators. Qatar plans to issue a second licence by end-2007.
• Mobile growth in Iran is very high since the launch of a second national operator, Irancell, in September 2006, after a difficult path to launch. Prepaid services were launched for the first time in early 2007. For more information, see chapter 2.8.2.1, page 26.
• Some very large prices have been paid for mobile licences in the region but the payment in May 2007 by MTC of US$6.1 billion for a third mobile licence in Saudi Arabia has beaten all records. For more information, see chapter 7.8.2.4, page 98.
• Qtel was the first regional operator to trial DVB-H in 2006. Both UAE operators offer mobile TV services.
• By mid-2007 well over 300 FTA satellite channels competed for viewers across the Middle East North Africa region. Channel numbers grew by over 50% in the previous year and doubled over the previous two years. Around 75% are privately owned. Many operate out of Dubai in the UAE.

Gulf countries mobile penetration and annual growth - 2007