Syria - Telecoms, Mobile, Broadband and Forecasts

Executive summary

Syria has the most regulated telecoms sector in the Middle East and one of the least developed. This has resulted in a country where there is strong growth potential if the rules were to be relaxed. News reports of coming change continue but as yet nothing has happened.

Fixed-line services remain the monopoly of state-owned Syrian Telecommunications Establishment (STE). STE is investing in upgrading and extending its network and aims to gain 100% coverage by end-2013. Fixed-line subscriber numbers are still rising and although penetration rates are low, they are higher than in many more wealthy Middle Eastern countries.

STE is also investing in Syria’s very limited international infrastructure. Syria is linked to Cyprus by the UGARIT submarine cable, a 239km cable that began operating in 1995, with designed transmission capacity limited to 622Mb/s. STE and the Cypriot Communications Authority (CYTA) have agreed to expand the cable and increase Internet capacity and have also undertaken to establish a second undersea link. In addition, a land cable connecting Syria, Turkey, Jordan and Saudi Arabia is expected to come online in mid-2010.

Mobile penetration rates are relatively low – Syria is one of the few markets in the region with room for expansion. Two Build-Own-Transfer (BOT) operators, Syriatel and MTN Syria, provide mobile services. Syriatel is locally owned and MTN is a subsidiary of MTN of South Africa, which gained ownership through its purchase of Investcom. There have been continual reports that both Syriatel and MTN Syria will be sold, with Turkcell of Turkey and Zain of Kuwait cited as likely buyers, among others. Both operators would prefer to convert their BOT contracts into regular mobile operator licences not least because of the high royalties (50% of revenue) that they are required to pay to the Syrian government. A tender for a third mobile licence has been much talked about and would be very attractive to the regional major operators such as Zain or Qatar’s Qtel but it has yet to eventuate.

Syriatel has launched 3G and HSPA services but high prices restrict services only to a very few subscribers.

Internet penetration is low and broadband penetration very low. The government exercises strict Internet censorship with many sites, including Facebook and YouTube, blocked in addition to websites critical of the Syrian government. Broadband services are expensive and difficult for a residential user to subscribe to, with ADSL in Syria reported to be the least affordable in the Middle East. However there are no restrictions on receiving the multitude of DTH satellite TV channels available in the Middle East.

Syria remains a market with great potential for expansion but requires much market liberalisation to achieve that potential.

Market highlights:

• International infrastructure is undergoing substantial improvement.
• A third mobile licence is being talked about.

Table of Contents

• 1. Executive summary
• 2. Key statistics
  • 2.1 Country overview
• 3. Telecommunications market
  • 3.1 Overview of Syria’s telecom market
• 4. Regulatory environment
  • 4.1 Background
  • 4.2 Regulatory authority
  • 4.3 Telecom sector liberalisation in Syria
  • 4.4 Interconnect
• 5. Fixed network operator in Syria
  • 5.1 Syrian Telecommunication Establishment (STE)
• 6. Telecommunications infrastructure
  • 6.1 National telecom network
    • 6.1.1 Network improvements
  • 6.2 International infrastructure
• 7. Broadband access market
  • 7.1 Overview
    • 7.1.1 Internet and broadband statistics
  • 7.2 Broadband subscriber forecasts
  • 7.3 ISP market
  • 7.4 Wireless broadband
• 8. Digital economy/digital media
  • 8.1 Overview
  • 8.2 E-government
• 9. Digital broadcasting
  • 9.1 Overview of broadcasting market
• 10. Mobile communications
  • 10.1 Overview of Syria’s mobile market
    • 10.1.1 Mobile statistics
  • 10.2 Mobile subscriber forecasts
    • 10.2.1 Scenario 1 – higher growth
    • 10.2.2 Scenario 2 – lower growth
    • 10.2.3 Notes on scenario forecasts
  • 10.3 Regulatory issues
    • 10.3.1 Third mobile licence
    • 10.3.2 Current BOT contracts
  • 10.4 Mobile technologies
    • 10.4.1 3G
  • 10.5 Major mobile operators
    • 10.5.1 Syriatel
    • 10.5.2 MTN Syria
  • 10.6 Mobile voice services
    • 10.6.1 Prepaid
    • 10.6.2 Satellite mobile
  • 10.7 Mobile data
    • 10.7.1 Mobile broadband
    • 10.7.2 Mobile content and applications
• 11. Related reports

• Table 1 – Country statistics Syria – 2011
• Table 2 – Telephone network statistics – 2011
• Table 3 – Internet user statistics – 2010
• Table 4 – Fixed broadband statistics – 2010
• Table 5 – Mobile statistics – 2011
• Table 6 – National telecommunications authorities
• Table 7 – GDP growth and inflation – 2005 - 2011
• Table 8 – Fixed lines in service and teledensity – 1995 - 2012
• Table 9 – Internet user and penetration rate – 1999 - 2011
• Table 10 – Fixed Internet subscribers and penetration rate – 1999 - 2011
• Table 11 – Household PC penetration – 2002 - 2011
• Table 12 – Fixed broadband subscribers – 2004 - 2011
• Table 13 – Mobile subscribers and penetration rate – 1999 - 2012
• Table 14 – Forecast mobile subscribers in Syria – higher growth scenario – 2014; 2019
• Table 15 – Forecast mobile subscribers in Syria – lower growth scenario – 2014; 2019
• Table 16 – Syriatel – Revenue by segment – 2008 - 2010
• Table 17 – Syriatel – Net profit – 2005 - 2010
• Table 18 – MTN Syria operational data – 2003 - 2011

• Chart 1 – Syria fixed-line and mobile subscribers – 2000 – 2012