Synopsis
Yemen is the poorest country in the Middle East and economic difficulties are numerous. Around 35% 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 fixed-line penetration remains at less than 5%. ADSL broadband services have been launched however and both dial-up and broadband Internet subscribers are growing steadily but from a very small base and Internet user penetration remains at only 5%. Yemen’s low literacy rate, at about 50% of the population, is a major reason for low Internet penetration. Among adult women, literacy rates are only around 25%. Low Internet penetration rates also reflect the small number of computers in the country. Most Internet users access the Internet at Internet cafes, of which there were nearly 1,000 in 2009.
Internet censorship is very strict - even local sites such as the UAE-based Arab portal Maktoob and Yemeni news portal YemenPortal.net have been blocked.
Mobile telecoms are the big success story. Steady growth of 40-50% over the past two years has seen penetration rates rise to nearly 30%. 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 Unitel has seen its subscribers grow quite quickly but remains a smaller player.
ARPU levels are very low at only around US$7 per month and this may account for the problems that arose with the sale of a third GSM licence, a process that took at least two years and resulted in a not entirely satisfactory outcome. 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.
Researcher:- Tine Lewis