Syria's Telecom operator to invest EUR1bn in network

This record figure would represent a 12.8% increase over the 2007 figure, which is estimated at SYP54.5bn ($1.09bn). In 2007, income had risen by 14.7% compared to the previous year.

This increase will be largely the consequence of a 23.8% projected surge in fees collected from the two mobile phone firms, Syriatel and MTN.

Under the terms of the 15-year Buy Operate Transfer (BOT) contract signed with the two operators, STE will collect the equivalent of half of the two firms' total income starting this year. This rate stood at 40% in 2007.

In 2008, STE plans to collect SYP27.5bn from MTN and Syriatel, up from SYP21bn in 2007.

Meanwhile, the number of subscribers to the GSM networks is continuing its double digit annual growth. On October 31, 2007 the number of subscribers to Syriatel and MTN stood at 6.2 million, up from 4.4 million at the end of 2006.

Syriatel has a market share of 55%, with almost 3.5 million subscribers, while MTN had 2.7 million subscribers.

Third mobile operator

According to the terms of the contract between STE, which also acts as the regulator of the telecommunications sector, and Syriatel and MTN, a third GSM operator can be introduced in the market seven years after the beginning of the operations of the existing companies. However, there is an ongoing dispute between STE and the two operators as to the start date of their activity.

According to STE, the two companies began their operations in April 2001, while according to Syriatel and MTN, the official approval for the beginning of their operations was received only in April 2002, which should serve as the beginning date.

Initially STE expected to license a third company this year, but according to Musbah Shalash, head of the Planning Department at STE, this is now a very unlikely prospect.

Meanwhile, income from the landline network has remained relatively even for the last three years. STE expects to earn around $600m in 2008, a year-on-year growth of 4.4%.

In 2007, the number of subscribers to the landline network reached 3.45 million, an annual increase of 6%.

STE plans to invest more than EUR1bn ($1.45bn) in its landline network over the 2008-2013 period. These investments will finance the development of two projects that will add four million new lines targeting the unserved areas and the most remote villages in the country.

These projects should help STE provide 100% coverage to the population. Two tenders will be announced this year.

Also, income from the internet, though very modest, will grow at a pace of 23.4%, from $56.2 million) in 2007 to SYP 3.47 billion (USD 69.4 million) this year. In 2007, the number of subscribers to the Internet grew by 20 percent in spite of the major technical problems faced by the network. By the end of 2007, the number of subscribers to Internet stood at 425,000, up from 340,000 a year earlier.