The most competitive and the most privatized Arab Telecom markets (page 2 of 2)

This rewards cellular markets with more evenly distributed market shares, a clear sign of stronger competition. Through the same approach, monopoly markets are penalized with a score of zero. The remaining indicators of service availability were simply measured in terms of YES or NO answers. Consequently, each country received the full percentage points for "YES" answers, and no percentage points at all for "NO" answers.

The most competitive Arab Cellular market was Palestine's (with a Cellular Competition Intensity Index score of 85%), followed by Jordan (67%), Morocco (59%), Yemen (55%), Tunisia (53%), Algeria (52%), Egypt (50%), Kuwait (44%), Lebanon (43%), Syria (42%), Bahrain (40%), Saudi Arabia (31%), Oman (23%), Qatar (20%), Sudan (19%) and the UAE (14%).

On the level of privatization front, Arab Advisors analysis is intended to shed a light on the actual level of privatization and state ownership in each country measured by the proportionate share of total revenues. It is important to note that this analysis was based on full 2003 revenues. As such, for countries where new operators entered the market late in 2003 or in 2004, the results will not reflect the current status of the market. Case in point would be the situation of Bahrain for example, or Tunisia.

Lebanon and Oman had the least privatized telecom markets, with 100% government share (ownership) of telecom revenues. Both countries scored in the bottom half of the Cellular Competition Intensity Index (see Exhibit 1). Bahrain and Saudi Arabia scored the highest share in the public sector with 10%, but also ranked eleventh and twelfth out of sixteen countries in the Cellular Competition Intensity Index. In terms of local private sector revenue share, Palestine and Kuwait scored highest with revenue shares of 100% and 55%, respectively. Finally, in terms of foreign ownership proportionate share of revenues, Jordan scored well above the rest with a 61% revenue share, followed by Morocco, Sudan, and Algeria.

The revenue proportionate share was calculated by multiplying each operator's share of total revenues by the percentage shares owned by government, public sector institutions, local private sector and foreigners in the country. For example, if a cellular operator contributes 30% of total revenues of the sector and is 50% owned by foreign investors, then the share of these foreign investors of the total revenues would be 30% multiplied by 50%, which equals 15%. Shares traded at the local stock exchanges of each country were calculated as local private sector even though many foreigners may hold them.

"Our results show that Palestine's telecom market is the most privatized with the private and foreign investors having a 100% proportionate share of 2003 revenues. Coming second was Sudan (72%), followed by Jordan (68%), Kuwait (55%), Bahrain (53%), Yemen (53%), Algeria (48%), Syria (46%), Morocco (41%), UAE (40%), Egypt (37%), Qatar (35%), Saudi Arabia (20%), Tunisia (12%), Oman (0%) and Lebanon (0%)." Ms. Adila Bouleghraif from Arab Advisors research department added.