Overview
Across the Middle East region, telecoms infrastructures are expanding and modernising. Most fixed-line incumbents
remain majority government-owned but greater liberalisation and competition are impacting the market in a positive
manner. Identifying the critical role of telecommunications in economic development, governments are making significant
investments. More technologically diverse services are becoming available to businesses and consumers alike and private
companies are taking the lead in the provision of services such as Internet access and mobile telephony.
Internet usage is on the rise across the region. Penetration is highest in Israel, UAE and the smaller countries of the
Gulf region and lowest in Iraq, Syria and Yemen. Infrastructure issues, government policy, poverty and illiteracy are
limiting factors.
Broadband services, chiefly DSL, are available in every country in the region. Other broadband access technologies
are available in various Middle Eastern countries, including cable modems, wireless broadband (WiFi, WiMAX and
satellite Internet) but are considerably less significant in terms of user uptake.
Israel is the most advanced country in terms of broadband penetration. Israel is also a hot house of development for
key broadband technologies.
The mobile market continues to boom, with the Gulf countries having some of the highest penetration rates in the
world. 3G, HSPA and mobile TV services are growing.
Operators in the wealthier countries in the region are investing in IP-based infrastructure to replace traditional
telephone systems, with Next Generation Network (NGN) development particularly aimed at corporate users. The Gulf
countries particularly have sophisticated infrastructure. However issues are arising in more deregulated countries
such as Israel and Bahrain as to the wholesale prices they can charge. Operators are threatening not to invest unless
they see more substantial returns than are likely in a competitive environment.
Egypt has emerged as the largest Arab Internet market thanks to the successful implementation of a free Internet
strategy. Since 2002, Internet users in the Cairo region have not been charged for dial-up Internet connections. All they
pay is the cost of a phone call - less than 25 cents an hour. The sector is highly competitive with more than 200 data
and Internet Service Providers (ISPs).
Israel has a very dynamic telecommunications market with one of the highest mobile penetration rates in the world
and one of the highest household broadband penetration rates. It is also experiencing convergence, with both the
telecommunications and media markets showing early signs of being redefined. There is a very flourishing venturecapital
funded ICT start-up sector with all manner of leading-edge software and equipment companies. All of the major
international players including Microsoft, Cisco, Lucent, Alcatel, and Nokia have bought Israeli start-ups and their
technology.
This brochure provides an indication of the type of content found in our publications.
6 Annual Publications
Over 650 pages
With statistical information and analyses on - Infrastructure, Convergence, Mobile Voice and Data,
Internet, the Regulatory Environment, Fixed and Wireless Broadband
THIS SERIES COVERS:
- Paul’s unique market analyses
- Historical trends
- Market share, penetration rates, industry and market statistics
- Major infrastructure and investment initiatives
- Winners and losers from converging technologies
- Regulatory environment and government involvement
WHO WILL FIND VALUE IN THIS PUBLICATION?
- Corporate Managers
- Business Development Managers
- Sales Managers
- Financial Planners
- Investment Consultants
- Government Agencies
- IT Consultants
- Educational Bodies
KEY DEVELOPMENTS
- Israel’s very high broadband penetration rate provides great potential for triple play and digital media market
developments. Bezeq, together with its satellite TV subsidiary YES, and HOT have the potential to easily deliver triple
play services, as each possesses both content and delivery mechanisms.
- Digital Media is at a very early stage of development in the Middle East but at least the potential for its development
has improved considerably over the past year due to the rise in broadband use.
- The population of the Arab Middle East is young and growing fast, many of them with high incomes. In the GCC
countries (UAE, Oman, Bahrain, Qatar, Kuwait and Saudi Arabia) 65% of the population is under 30. Young consumers
tend to be enthusiastic consumers of all types of digital media and users between the ages of 15 and 29 are said
to form nearly 70% of all Internet traffic in the GCC countries.
- In the more developed markets customers want the latest in high-end handsets and have the income to pay for
them. Many operators have installed 3G, some also High-Speed Packet Access (HSPA) and are developing portals
to provide information services and entertainment.
- In early 2007 the Iranian mobile market experienced what is likely to be a vital tipping point, with the first introduction
of prepaid mobile subscriptions by the new alternative operator, Irancell.
- There is very high unsatisfied demand for mobile services in Iran. Growth through 2007 has been very high, although
longer term growth is less certain. Possible disruptions to growth are almost entirely political. Major Irancell
shareholder MTN is finding the regulatory environment challenging and its level of investment will depend on it
being able to rely on a reasonable degree of stability.
- Mobile data services are increasingly important in the saturated markets of Israel and the GCC countries. Data
revenues are increasing. Israeli operator Cellcom stated that its revenues generated from content and value-added
services increased by 55% in 2006 over the figure in 2005 and by 42% in the first quarter of 2007 compared with
the first quarter of 2006.
COUNTRIES INCLUDED:
Bahrain, Iraq, Jordan, Lebanon, Qatar, Syria, UAE, Iran, Israel, Kuwait, Oman, Saudi Arabia, Turkey, Yemen
Broadband household penetration in arabian Gulf countries - 2006
|
Country |
Household penetration (e) |
|
Bahrain |
45% |
|
Oman |
4% |
|
Qatar |
45% |
|
Saudi Arabia |
7% |
|
UAE |
60% |
(Source: BuddeComm based on industry data)
DIGITAL MEDIA
Considerable cultural barriers do exist to the growth of digital content, but there are some interesting
developments. The international market leaders are taking a greater interest in the region. Rotana Group has had local success
with online music retailing. There are also very successful news sites and Internet portals. AlBawaba, a leading Arabic-language news content provider grew at a rate of
around 90% over the two years to 2006. News satellite TV channel Al Arabiya’s website claimed to be the busiest in
the Middle East in May 2007.
Israeli Internet content has long been a flourishing business. There have been some very successful
companies, including Shopping.com, which was later sold to eBay. E-commerce by retail chains in Israel exceeded
NIS8 billion in 2005, and grew 50% in 2006. A major trend in the sector is connecting the leading TV channels
with the big Internet portals.
Also in Israel, HOT has gained an increase in market share by offering very popular packages: multi-channel
TV, broadband and fixed-line telephony. It is now also interested in adding mobile to its package via a Mobile
Virtual Network Operator (MVNO) licence.
|
Services |
Units |
|
TV receivers |
(e) 2,500,000 |
|
TV households |
(e) 1,870,000 |
|
Cable TV subscribers |
920,000 |
|
Satellite TV subscribers |
539,558 |
(Source: BuddeComm based on various industry sources)
Note: TV households have remained steady at around 92% of all households for some years.
DATA AND BROADBAND MARKET
The wealthier countries of the Gulf are making a strong push to follow in the UAE’s footsteps towards higher
broadband penetration. Broadband subscribers in Qatar increased nearly 100% during 2006, reaching around
45% penetration on a household basis.
The UAE has seen a further 50% growth in broadband subscriber numbers and is approaching 60% household
penetration. The largest country in the region, Saudi Arabia, has low broadband penetration at around 7% of
households but it is rising quickly and there is generally a feeling that more must be done to encourage uptake.
Competition has been introduced into the market and STC, the incumbent operator, has reduced its charges.
Lebanon, a country with a large potential market, has access at last to DSL after a very long wait.
Israel meanwhile is one of the most developed broadband markets, ranking seventh in the world at end-2006, with
around 70% household penetration.
Internet users, penetration and growth in the Middle East - Selected countries - 2006
|
Country |
Internet users (millions) |
Internet penetration |
Annual Growth |
|
Bahrain |
0.18 |
26% |
16% |
|
Egypt |
6 |
8% |
20% |
|
Iran |
7.5 |
11% |
7% |
|
Israel |
3.9 |
54% |
8% |
|
Jordan |
1 |
18% |
20% |
(Source: BuddeComm based on IMF, ITU and industry data)
Notes: Population statistics in many countries of the Middle East are vague due to high expatriate populations.
Consequently the penetration statistics above should be taken only as guide.
MOBILE MARKET
While the richer countries of the Middle East have some of the highest mobile penetration levels in the world, Yemen
is at the other end of the spectrum entirely. In between, penetration levels are mostly rising fast.
As at early 2007, five countries in the region now have penetration levels well over 100%, this is a high proportion
of the 39 countries in the world. The mobile markets of Israel and the four Gulf Cooperation Council (GCC)
countries of Bahrain, Kuwait, Qatar and the UAE would appear to be saturated.
All markets other than Qatar now have at least two mobile operators and Qatar is planning to award a second licence
by end-2007. The increased competition has caused tariffs to fall.
The investment in new operators has come almost entirely from within the region. Several local operators
with deep pockets have grown enormously through buying operators and licences, with interests across the region
and extending into Africa and West Asia.
Four Middle Eastern operators are vying for supremacy: Etisalat of the UAE, most of whose subsidiaries are in
Africa, MTC of Kuwait and, more recently, Qtel of Qatar. Orascom of Egypt also has a very significant presence in
Africa and West Asia but has sold some subsidiaries and is concentrating particularly on high population and very
low penetration countries. Batelco of Bahrain has also joined the fray but is not yet on the scale of the other
four.
|
Country |
Mobile subscribers (million) |
Penetration |
Annual Growth |
|
Kuwait |
2.53 |
103% |
6% |
|
Lebanon |
1.09 |
28% |
9% |
|
Oman |
1.82 |
65% |
34% |
|
Qatar |
0.92 |
115% |
35% |
|
Saudi Arabia |
20.07 |
74% |
49% |
|
Syria |
4.57 |
24% |
54% |
|
Turkey |
61.66 |
73% |
19% |
|
UAE |
5.5 |
134% |
21% |
|
Yemen |
3.05 |
14% |
47% |
(Source: BuddeComm based on IMF, Global Mobile, ITU and industry
data)
Note: Population and GDP per capita are estimations as 2006 data is not yet available.
ABOUT BUDDECOM
Paul Budde Communication Pty Ltd (trading as BuddeComm) is an independent telecommunications and research
consultancy company. We operate a global network of 45 researchers and consultants who create strategic business
reports covering telecommunications in 170 countries, 450 companies and 200 technologies and applications. Our
website www.budde.com.au services a global market with over 100 Annual Publications, over 1,100 continuously
updated Web Reports, 800 archived Web Reports, a monthly newsletter and 20 web-based e-newsletters.
For more information, see BuddeComm's:
2007 Telecoms, Mobile and Broadband in The Middle East
Gulf region report
2007 Telecoms, Mobile and Broadband in The Middle East - Mediterranean & Levant countries
2007 Middle Eastern - Convergence, Broadband and Internet Market
2007 Middle Eastern Mobile Communications and Mobile Data Market
2007 Middle Eastern - Telecoms Statistics and Market Overview report
2007 Middle East - Telecoms Statistics - tables only report
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