Executive summary
Yemen is very much the poorest country in the Middle East and economic difficulties are numerous. Around 42% of the population is below the poverty line. The telecoms sector reflects this situation. In addition the market has had little liberalisation, competition or private investment outside the mobile sector. All fixed-line and Internet services are provided by state-owned PTC and its subsidiaries.
Infrastructure improvement has been slow and hence presents opportunities for growth and development. Fixed-line penetration remains at less than 5%. ADSL broadband services have been launched. Broadband Internet subscribers are growing steadily but from a very small base, and Internet user penetration remains at only around 11%. Yemen’s low literacy rate, at about 45% of the population, is a major reason for low Internet penetration. Low Internet penetration rates also reflect the small number of computers in the country.
Low Internet usage has not stopped development of Internet society initiatives; Yemen has launched e-government, e-education and e-health initiatives although additional introduction of computerised systems is required to support large scale adoption of such initiatives. Social network sites such as Facebook are growing in popularity and have been credited with allowing protestors to organise the recent anti government protests.
Mobile telecoms are the big success story in Yemen. Steady growth has seen penetration rates rise to over 40%. Regional mobile operators Batelco of Bahrain and MTN of South Africa have major shares in GSM mobile operators. They each have about a third of the market with the majority state-owned CDMA operator Yemen Mobile also having around one third market share. Newer operator ‘Y’ remains a smaller player.
As most other Middle East markets are becoming totally saturated, Yemen will probably remain of interest as one of the few markets with potential for growth.
