1. Arab Communications Markets
Jawad Abbassi
ITU Private Sector Cooperation Meeting in the Arab Region – Amman
October 2003

2. Outline Communications and Internet situation in the Arab World
The effects of liberalization and privatization on infrastructure and service availability
The upcoming competitive landscape in Arab countries

3. A Regional Comparison Algeria 6.2% 1.4% Bahrain 24.4% 54.3% Egypt
Country
PSTN %
GSM %
Internet (Accounts) %
Algeria
6.2%
1.4%
0.2%
Bahrain
24.4%
54.3%
7.4%
Egypt
11.4%
6.6%
0.3%
Jordan
12.7%
22.4%
1.3%
Kuwait
21.3%
57.7%
9.5%
Lebanon
20.9%
3.9%
Morocco
3.4%
20.8%
Oman
10.2%
16.5%
2.5%
Qatar
28.5%
43.0%
3.2%
Saudi Arabia
15.1%
22.8%
2.6%
Syria
11.9%
2.3%
0.4%
Tunisia
11.7%
5.5%
0.8%
UAE
29.1%
64.7%
8.3%
*Figures by end of 2002
Source: Arab Advisors Group’s Reports

4. PSTN Penetration (%)

5. GSM Penetration (%)

6. Internet Accounts Penetration (%)

7. A Regional Comparison Country PSTN ARPU $ GSM ARPU $ Internet ARPU $
Algeria 12 64
Bahrain 71 46 45
Egypt 15 22 8
Jordan 30
Kuwait 65 54 48
Lebanon 52 75 20
Morocco 36 14
Qatar
120
102
Saudi Arabia 73
Syria 16 70 13
Tunisia 33 42
UAE 56 51 31
** Figures by end of 2002
Source: Arab Advisors Group’s Reports

8. Regional GSM Subscriber Mix
Operator/Country
Postpaid %
Prepaid %
Space Tel -Syria
100% 0%
Syria Tel - Syria
STC – Saudi Arabia
57%
43%
Q-TEL - Qatar
49%
51%
MTC Vodafone - Kuwait
41%
59%
Orascom Telecom Algeria
33% (March 2003)
67% (March 2003)
Fastlink – Jordan
30%
70%
Batelco – Bahrain
22%
78%
MobiNil - Egypt
20%
80%
MobileCom - Jordan
Tunisie Telecom (Tunicell)
Vodafone Egypt
16% (March 2003)
84% (March 2003)
MediTel - Morocco 7%
93%
Wataniya - Kuwait 6%
94%
Jawwal - Palestine
** Figures by end of 2002 unless indicated otherwise
Source: Arab Advisors Group’s Report “A KPI Scorecard of Arab Telecom Operators” – June 2003

9. Global PSTN Status
Source: Arab Advisors Group’s Report “A KPI Scorecard of Arab Telecom Operators” – June 2003

10. Global GSM Status
Source: Arab Advisors Group’s Report “A KPI Scorecard of Arab Telecom Operators” – June 2003

11. Global Internet Use Status

12. Mobiles and Mainlines Bahrain, Kuwait, Morocco and UAE in 2000
When Mobiles exceeded / will exceed PSTN lines:
Bahrain, Kuwait, Morocco and UAE in 2000
Jordan, Lebanon, Oman and Qatar in 2001
Saudi Arabia in 2002
Tunisia, expected in 2003
Algeria, expected in 2004
Syria, expected in 2007
Egypt’s PSTN subscribers are expected to continue exceeding mobile subscribers throughout the coming four years
Source: Arab Advisors Group’s “A Comparative Analysis of the Cellular and Mainlines Markets in the Arab World” – October 2002
Source: Operators, Arab Advisors Group

13. Mainlines Market Share Index
Country
% Share of the Population
% Share of PSTN Market
Index*
Algeria
15.90%
9.30%
0.58
Bahrain
0.36%
0.84%
2.31
Egypt
34.40%
36.96%
1.07
Jordan
2.69%
3.22%
1.20
Kuwait
1.14%
2.30%
2.01
Lebanon
1.93%
3.82%
1.98
Morocco
15.06%
4.89%
0.32
Oman
1.35%
1.31%
0.97
Qatar
0.31%
2.70
Saudi
11.10%
15.82%
1.43
Syria
8.91%
10.01%
1.12
Tunisia
4.95%
5.47%
1.11
UAE
1.89%
5.22%
2.76
** Figures by end of 2002
Index= % Share of PSTN Market/% Share of Population
Source: Arab Advisors Group’s Reports

14. Cellular Market Share Index
Country
% Share of the Population
% Share of GSM Market
Index*
Algeria
15.90%
1.86%
0.1
Bahrain
0.36%
1.63%
4.5
Egypt
34.40%
18.82%
0.5
Jordan
2.69%
4.98%
1.9
Kuwait
1.14%
5.46%
4.8
Lebanon
1.93%
3.34%
1.7
Morocco
15.06%
25.91%
Oman
1.35%
1.4
Qatar
0.31%
1.12%
3.6
Saudi
11.10%
20.93%
Syria
8.91%
1.67%
0.2
Tunisia
4.95%
2.27%
UAE
1.89%
10.15%
5.4
** Figures by end of 2002
Index= % Share of GSM Market/% Share of Population
Source: Arab Advisors Group’s Reports

15. Arab Advisors IVCU Index
Country
IVCU* Index
% Share of Circuits
% share of minutes
Kuwait
0.63
4.5%
7.1%
Saudi Arabia
0.87
29.6%
33.9%
UAE
1.12
23.4%
20.9%
Oman
0.98
3.9%
4.0%
Jordan
2.05
6.5%
3.2%
Syria
2.68
7.2%
2.7%
Lebanon
0.44
5.3%
12.1%
Egypt
1.28
16.4%
12.8%
A total of 64.1 K circuits and 5.38 billion minutes
* International Voice Circuits Utilization (IVCU) Index.
Source: Arab Advisors - International Connectivity in the Arab World

16. Advanced Services Availability
Operator / Country
GPRS
MMS
Algerie Telecom Mobile No
Batelco – Bahrain
Yes
MobiNil - Egypt
Vodafone Egypt - Egypt
Fastlink - Jordan
MobileCom - Jordan
Wataniya – Kuwait
MTC Vodafone – Kuwait
Cellis - Lebanon
LibanCell - Lebanon
Maroc Telecom
Qatar – Q-Tel
Saudi Arabia - STC
SyriaTel - Syria
Tunisie Telecom -Tunisia
Tunisiana - Tunisia
UAE – Etisalat

17. Int’l Connectivity Operators
Two major international submarine fiber optic cables and three satellite operators
Arabsat
Intelsat
Inmarsat
SEA-ME-WE
FLAG

18. Regional Internet Bandwidth Capacity Index
Country
Accounts
% share of Accounts
Internet Bandwidth Capacity
% share of bandwidth
Regional bandwidth index+
Egypt
220,000
14.16%
645
18.90%
1.33
Jordan
71,000
4.57%
225
6.59%
1.44
Lebanon
150,000
9.66%
135
3.96%
0.41
Morocco
60,000
3.86%
310
9.08%
2.35
Oman
66,000
4.25%
197
5.77%
1.36
Qatar
20,000
1.29%
155
4.54%
3.53
Saudi Arabia
581,200
37.42%
0.51
Syria
75,000
4.83% 16
0.47%
0.1
UAE
310,000
19.96%
1,085
31.79%
1.59
Source: ArabAdvisors Group

19. Regional Utilized Internet Bandwidth Index
Country
Accounts
% Share of Accounts
Internet Bandwidth Capacity
% Share of Bandwidth
Regional Bandwidth Index+
Egypt
220,000
14.73%
450
21.70%
1.47
Jordan
71,000
4.75% 90
4.34%
0.91
Lebanon
150,000
10.05% 60
2.89%
0.29
Morocco
60,000
4.42% 38
1.83%
0.41
Oman
66,000
1.34%
1.37
Qatar
20,000
38.92%
297
14.32%
0.37
Saudi Arabia
581,200
5.02% 16
0.77%
0.15
Syria
75,000
20.76%
1,085
52.31%
2.52
UAE
310,000
Source: ArabAdvisors Group

20. Competition in the Region?
Country
PSTN
GSM
Internet
Datacomm
Kuwait
Monopoly
Duopoly
Competitive
Saudi Arabia
Qatar
Bahrain
Monopoly*
UAE
Oman
Jordan
Syria
Controlled Duopoly
Lebanon
Egypt
Morocco
Libya
Algeria
Tunisia
Source: Arab Advisors Group’s Reports

21. Why is Competition Important?
Better and more responsive service
Expanding bases of consumers of communications services
Cost-based pricing (tariff rebalancing, which could mean lower or higher rates)
Enhance global investor interest and create employment

22. Upcoming liberalization plans
Bahrain
Second mobile license granted in April 2003
Internet competition before the end of the year
Second fixed line operator (including ILD) expected by 2005
Egypt
Full competition (i.e. a third GSM operator) by 2005
Second fixed line operator (including ILD) expected by 2006

23. Upcoming liberalization plans
Jordan
iDEN operator to be launched in 2004
A third GSM operator in 2004
Second fixed line operator (including ILD) by 2005
Kuwait
Full competition (i.e. a third GSM operator) expected by
Second fixed line operator (including ILD) expected by

24. Upcoming liberalization plans
Algeria
A second fixed line operator (including ILD) expected in 2004
Third GSM operator expected in 2004
Tunisia
Second fixed line operator expected in 2004

25. Upcoming liberalization plans
Lebanon
A third GSM operator expected in 2004
Second fixed line operator (including ILD) expected after 2005
Morocco
The first to introduce ILD competition in the region. Two Radio Trunking operators.
Expected to be the first to grant a second fixed line license in 2003/2004. Delays and one failed attempt

26. Upcoming liberalization plans
Qatar
Second GSM operator expected by 2005
No clear timeline for a second fixed line operator (including ILD)
Saudi Arabia
STC partially privatized 30% in January 2003
Second GSM license during the last quarter in 2004
Second fixed line operator in 2008

27. Upcoming liberalization plans
UAE
Duopoly of GSM market expected by end of 2005
Second fixed line operator (including ILD) expected by 2005
Oman
Duopoly of GSM market expected in 2005

28. Upcoming liberalization plans
Syria
No second fixed line operator, nor third mobile operator expected in the coming four years
Iraq
Competition of GSM market expected by 2004
(Results of tender for 3 licenses should be issued by end of September 2003)
Palestine
Jawwal’s license ends in Still no tender for a second operator.
PalTel has a 20 year license, which expires in 2015.

29. Global Telecom Operators in the MENA Region
Foreign Investor
Investment in
Ownership
Country
Cable & Wireless
Batelco
20%
Bahrain
Vodafone
Vodafone- Egypt
67%
Egypt
France Telecom
Jordan Telecom
31%
Jordan
Orange
ECMS-MobiNil
36.3% of ECMS
71.25% of MobiNil
Vivendi Universal
Marco Telecom
35%
Morocco
Telefonica
MediTel
30.5%
Portugal Telecom

30. Regional Operators Operator Shareholder in Country of Operation
Orascom Telecom Holding – Egypt
MobiNil
Mobilink
Orascom Telecom Algeria
Orascom Telecom Tunisia
Telecel
Libertis
Tchad Moile
Egypt
Pakistan
Algeria
Tunisia
Africa Congo Brazzavile
Chad
Batelco – Bahrain
QualityNet WLL
Soficom Communications SAE
Batelco Jordan
Batelco Jeraisy company Ltd
Kuwait
Jordan
Saudi Arabia

31. Regional Operators Operator Shareholder in Country of Operation
Wataniya -Kuwait
Orascom Telecom Tunisia
Tunisia
MTC Vodafone – Kuwait
Thuraya Satellite System
Fastlink
International
Jordan
Maroc Telecom - Morocco
Mauritel
Mauritania
Etisalat - UAE
Sudatel

32. The Lost Golden Years
The GSM license fees as cash cows for a few Arab governments
were the years of massive telecom license valuations: Some Arab countries benefited (Egypt, Morocco), others lost the chance (Oman, Egypt, Lebanon, Jordan, etc.)
Markets remain growth markets and profitable. Much less hyped however!

33. Enabling Proper Competition
Policy on local loop unbundling (or infrastructure-based competition)
Tariff rebalancing
Phasing out of cross subsidization (VoIP termination example)
Transparent and strong regulators
A courageous judiciary
The possible role of GSM operators in spearheading full competition

34. Arab Advisors Group
Arab Advisors Group provides reliable research, analysis and
forecasts of Arab communications, media and technology
markets.
This presentation draws from around 180 reports published
by Arab Advisors Group’s team.
Arab Advisors Group consulting service has served new
telecom ventures in the Arab World whose investments in
Arab Telecom markets will exceed One billion US$.
Tel:
Fax: