2008 Middle Eastern - Mobile Communications and Mobile Data Market

This Middle East market report covers the mobile telephony and mobile data markets in each of the following countries: Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, UAE and Yemen. Across most countries of the Middle East, including even some of the most highly penetrated, growth rates are surprisingly high. This is mostly due to a recent increase in competition – a second or third operator has entered the market or a new investor has bought a share of an existing operator – causing a subsequent drop in tariffs or improvement in services. Multi-SIM ownership is common as subscribers aim to maximise special offers and different deals. The region’s mobile markets include:

Iran

Iran started proceeding in August 2008 to auction a third mobile licence. Mobile subscriber numbers in Iran grew hugely after the launch of second operator MTN and there remains room for more growth but MTN’s path to launch was torturous, a fact that may discourage some bidders. Russian operators may be interested in the licence.

Iraq

With little fixed-line infrastructure, Iraqis have taken to mobile use with great enthusiasm, creating penetration levels fast approaching 50% in mid-2008, having grown from zero in only four years. The previously three roughly equal operators have been reduced to two (one of them twice as large as the other) since the award of new 15-year licences but so far the reduction in competition has had no bad effect on growth, which has accelerated considerably in 2008, probably due to the improving security situation.

Israel

The Israeli government is moving to create a wholesale market in all sectors of communications, which will lead to change in the mobile sector after a long period of stability. While Israel already has very high levels of mobile penetration, its three roughly equal operators plus one much smaller operator, MIRS, have seen little change in their market shares for some years. The government is expected to issue MVNO licences. In addition, WiMAX frequencies are to be auctioned with MIRS (wholly owned by Motorola) a likely winner. Meanwhile, 3G subscriber levels made up around 25% of total subscribers in early 2008 and revenue from mobile data constituted around 15% of total revenue.

Qatar

Qatar is currently the only market in the region with a single operator but this is about to change in early 2009 when second-licence winner Vodafone Qatar is due to launch. Qatar’s mobile penetration was already well above 120% in early 2008, leaving little room for Vodafone. Vodafone has experience in the region with operations in Egypt and Turkey but will be the first non-Middle East based operator in the GCC countries.

Saudi Arabia

Since the launch of second operator, Mobily, mobile subscribers have grown rapidly, leading to penetration levels similar to those of the smaller GCC states, at well over 100%, despite Saudi Arabia’s much higher total population. With third operator Zain’s launch in August 2008 the market is about to become even more competitive, particularly as it is the only market where three of the region’s major operators – Etisalat of the UAE, Zain of Kuwait and STC on its home turf – go head to head.

UAE

Mobile penetration levels in the UAE are quite spectacular, claimed as being over 175% in March 2008. Growth has been astonishing since the launch of second operator du. 3G subscribers make up over 25% of the total.

For those needing high level strategic information and objective analysis on the mobile telephony and mobile data markets in the Middle East, this report is essential reading and gives further information on:

·         Mobile operators – acquisitions, mergers, and competition;

·         Government policies and regulatory issues;

·         Past and planned licence auctions;

·         Technological developments in the mobile telephony and mobile data markets.

Data in this report is the latest available at the time of preparation and may not be for the current year.