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2009 Middle Eastern Fixed Voice and Telecommunications Infrastructure Market

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Last updated: 17 Nov 2009 Update History

Report Status: Archived

Report Pages: 114

Analyst: Tine Lewis

Publication Overview

This annual report offers a wealth of information on the regulatory background and fixed-line markets in the Middle East. Subjects covered include:

·         Fixed line statistics and trends;

·         National telecom networks and infrastructure;

·         International submarine cables;

·         Infrastructure developments;

·         Brief overviews of all major Middle Eastern fixed-line telecom operators.

 

Researchers: Tine Lewis, Peter Lange

Current publication date:- November 2009 (8th Edition)

Next publication date:- November 2010

Executive Summary

This Middle East market report gives an overview of the fixed-line voice and infrastructure segment of the telecoms markets of the region. It details the major operators and infrastructure in each of the following countries: Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, UAE and Yemen.

 

In the Middle Eastern region telecommunications infrastructure varies from very advanced to very rudimentary. Several Fibre-to-the-Home projects are under development in Israel and the Gulf countries but in Yemen and Iraq fixed-line penetration is only around 5%. The area is well served with international links via submarine cables.

 

At first glance fixed-line teledensity in the Arab Middle East would appear very low, even in the wealthier countries, compared with teledensity rates of around 60% in the USA for example. However, figures can be misleading due to the larger household sizes compared with Europe or the USA, plus large hostel-accommodated expatriate populations in some countries. In fact in many countries household penetration is at or near 100%. Several markets are showing decline due to mobile substitution, particularly dramatically in Jordan with its very competitive mobile market.

 

Other than in Israel, each country has a national fixed-line operator but no other large players in the fixed-line sector. Even in the more liberalised markets of the Arab Middle East there are as yet no serious competitors to the incumbents but this is beginning to change, first in Bahrain through VoIP and calling-card operators and later WiMAX operators, and now also in Saudi Arabia, the UAE and Jordan. All fixed-line incumbents also offer mobile services.

 

Top five Middle East countries for fixed-line teledensity – 2008

Country

GDP per capita

Population

Number of Households

Fixed lines

Fixed line growth

2007/08

Teledensity

(US$)

(millions)

Israel

28,365

7.11

2.1

2.9

-3%

41%

Iran

4,732

72.9

13.0

24.8

+4%

34%

UAE

55,607

4.8

0.7

1.5

+9%

32%

Bahrain

27,248

0.78

0.12

0.22

+8%

27%

Turkey

10,472

69.7

16.0

17.5

-4%

25%

(Source: BuddeComm based on IMF, ITU and industry data)

 

 

Key highlights:

 

Bahrain

All sectors of the Bahraini communications market have been liberalised. Incumbent Batelco shares the fixed-line market with thirteen other operators providing international calling services using international direct dial, carrier pre-selection or prepaid calling cards. Around 50% of international call minutes originating from fixed lines use prepaid calling cards. Like other GCC countries, Bahrain has a large expat population (approximately 50% of the total) and this has been the cause of the impact of prepaid VoIP-based calling cards on the market and on Batelco’s international call revenues.

 

Infrastructure is excellent – Batelco completed the rollout of an NGN in January 2009.

 

Israel

While incumbent Bezeq still has a big majority of the domestic fixed-line market, its share has fallen rapidly since the introduction of number portability in December 2007 and by mid-2009 was down to 75%. VoIP operators and cable company HOT are the beneficiaries.

 

The international fixed-line market has been very competitive for many years. Three operators dominate the market with roughly equal shares. All are keen to move into providing domestic call services and the three already share the majority of the ISP market.

 

This market is particularly interesting as these players, together with the three mobile operators who are also moving into the fixed-line voice and Internet market, jostle for position. Significant investment is being made in NGN infrastructure.

 

Saudi Arabia

Saudi Arabian fixed-line teledensity (and broadband penetration) are low. Competition has been introduced into the fixed-line market with hope that it will lead to similar extensive development as has happened in the mobile market with increased competition. Three companies were awarded licences - Batelco/Atheeb, US consortia MCI International/Verizon and Hong Kong-based PCCW. Data communication provision licences were also awarded to two companies - ITC and Bayanat Al Oula. Bayanat has since been acquired by mobile operator Mobily, a subsidiary of UAE incumbent Etisalat, which could result in a serious competitor for STC.

 

All licence winners, together with incumbent STC, are making substantial investments in infrastructure and intend to make extensive use of WiMAX.

 

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

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