Arab communications markets on the threshold of unprecedented competition (page 1 of 2)

The Arab World is still a global laggard in introducing competition in its communications markets. Across the Arab Countries from the Atlantic Ocean to the Arabian Gulf, fixed services monopolies and a few GSM duopolies are the norm. The Arab countries, home to more than 250 million people, are yet to have truly liberalized communications sectors that will bring in what competition elsewhere brought: Better service, expanding bases of consumers of communications services and cost-based pricing (which in general means lower rates although it could mean higher local rates as cross subsidization of services is usually the first thing to go in a competitive market). Liberalized markets will also enhance global investor interest in the countries as opportunities attract international operator, vendors and finance.

"The picture varies markedly between the Arab countries", noted Jawad Abbassi, Arab Advisors Group President. "Morocco is the clear market leader in introducing liberalization followed by countries like Jordan, Egypt and Lebanon. The Gulf States are still monopoly countries with some level of competition in Kuwait (Internet and GSM) and Saudi Arabia (Internet)", Mr Abbassi said. "Clearly, countries that are facing economic hardships have been the leaders in recognize the role of telecommunications liberalization in attracting investments and upgrading their once-dilapidated communications infrastructure."

Morocco will be the first Arab country to have competition in the fixed services and international long distance service segments. A new research report by Arab Advisors Group entitled "Morocco Communications Projections Report-2001" details the impending opportunities in one of the larger Arab communications markets. The report was released to Arab Advisors Group Strategic Research Subscribers in October. Morocco's regulator, the ANRT, is in the process of launching a tender for a second PSTN license (that includes a datacomm and international gateway components). Morocco will therefore have PSTN and fixed services competition in 2002. ILD competition will also start in 2002 since the existing second GSM licensee, MédiTélécom, has the right to operate its own international exchange as of 2002. MédiTélécom's strategic owners include Spanish Telefonica and Portugal Telecom. Full ILD competition will start in 2003.

"Basic services competition will reinvigorate the Moroccan market" Hala Baqain, Arab Advisors Group's Morocco Analysts, said. "Between 2002 and 2006, the Arab Advisors Group projects the addition of close to a million new PSTN lines, as opposed to less than .25 million between 1997 and 2000." Baqain wrote in the report. The Morocco Communications Projections Report-2001 provide comprehensive analysis of the regulatory regimes and investment laws affecting the communications and Internet markets in Morocco. The report include five-year projections of more than 40 demographic, economic, telecom and Internet indicators, along with another five-year historical view. The report also details communications operators' profiles, services and strategies and detail opportunities in Morocco for vendors, investors and new operators.

Lebanon too is geared for liberalization and privatization action. The country is expected to have a modern WTO compatible telecom law in the coming short period.