MENA mobile subscriptions 60 per cent below market potential

The MENA region has 115m addressable subscribers and only 45m are current subscribers. This large spread emphasizes the tremendous pent up demand and the profitability potential that will be awarded to the mobile operators best suited to tackle this regions needs.

Contributing factors to this greatly underserved market include lack of effective competition, high entry-barriers and operator's preference for high margins. Due to the regions diversity, each country's business environment must be examined individually. According to Middle East & North Africa Mobile Benchmarks, Morocco and Oman have similar penetration levels but where a 24% penetration in Morocco must be seen as a remarkable achievement, the same penetration level is arguably a failure in the Omani market given its relatively wealthy population. "Success in the region's low-income markets often lies on offering low entry-barriers," comments report author, Jonas Lindblad. "Maroc Telecom has effectively adopted a strategy that captures maximum subscribers with low entry costs and relatively high airtime fees."

A Pyramid Research case study on Jordan and Iran analyzes the impact of competition and low entry barriers on mobile penetration. Iran and Jordan have similar GDP/capita - about $1,850 - yet Iran has a meager 4.2% mobile penetration compared to Jordan's 25% penetration. With similar demographics, Jordan's efficiently regulated and competitive market allows it to capture much of the addressable market and significantly outperform Iran.