Broadband and liberalization play critical role in shaping IDC's 2006 prediction list for the telecoms markets of the Middle East and North Africa

According to a new IDC Insight, the continued increase in demand for telecommunications services and greater availability of both broadband and mobile access have contributed to the market's development. Moreover, the increasing number of countries moving towards liberalization and privatization will bring new players to the market and usher in an era of mergers and acquisitions, new licenses, and major financing deals.

'This in turn will fuel competition, causing the region's markets to grow not just in terms of size but also in terms of the variety of services and solutions available to consumers and business,' says Mohsen Malaki, Senior Program & Consulting Manager, MEA Region. 'None of this would be possible without the substantial investments of 2004 and 2005 that fixed and mobile operators made into broadband, mobile network expansion and upgrades, Internet data centers, and internal and regional expansion. Coupled with the loosening of market restrictions, these moves have laid the foundation for diverse market developments in 2006.'

IDC's Top Ten predictions for the region's telecoms markets include:

Liberalization Brings New Players in Fixed and Mobile Markets

In selected countries, regulators will free up some spectrum from government and military use and allocate it to new licensees for fixed-line access services. Among other liberalization drives, Saudi Arabia is expected to open bidding for another fixed-line operator, and possibly a third mobile operator, in late 2006 or early 2007.

Broadband Reaches Critical Mass in More Advanced MEA Markets

Increased availability of broadband will spur investment in local and regional bandwidth-rich content. This will in turn encourage gradual growth in the number of regional ISPs, which will utilize one of the region's two major Internet exchanges (Emirates Internet Exchange, Cairo Internet Exchange) or one of the newly launched exchanges (Bahrain Internet Exchange, Saudi Internet Exchange, Jordan Internet Exchange).

Commercial Deployment of Multiplay Bundled Services Heralds Telco/Media Partnerships and Migration to All-IP Networks

Operators will launch multiplay services to help the sagging residential wireline business and arrest the continued decline in residential ARPU due to consumer migration to mobiles for voice calls. Operators will likely clamor for TV content as part of their offerings, forging partnerships with TV channels in the region.

Wireless Enterprise Gains Momentum

An increased focus on enterprise customers by mobile providers will generate awareness and push adoption of wireless solutions. As organizations across the region start reaping the benefits of mobility, momentum will build, further fueling the integration of wireless networks and telephony into business models.

Threat of Competition Will Spur Slow-moving Incumbents to Put Their House in Order

Already feeling the pinch from mobile service providers, incumbents will take further action when faced with the opening of fixed-line markets to competition. IDC believes this will include everything from developing clear product maps that satisfy unmet need and restructuring of the sales and customer relationship process.

'The bottom line is that the region's fixed and mobile telecommunications markets are headed for some turbulence,' says Malaki. 'They're still flying high, but the changes in the regulatory environment, advances in technology, and evolving customer needs means the skies won't always be clear. Growth is still the norm, but it won't be painless.'

IDC's Predictions 2006 - MEA Fixed and Mobile Communications provides the Top 10 predictions for fixed and mobile telecommunications services market in the Middle East and Africa region for 2006. After a quick review of the general trends witnessed last year, the study draws from the latest IDC research and the insights of IDC's regional telecommunications services analysts to take a high-level look at trends, vendor and service provider strategies, and the emerging technologies that will have a major impact on the industry and its players in 2006.