The Middle East’s Mobile Market

Cellular market privatization in the Arab nations is helping stimulate the mobile market, according to a new report from the Arab Advisors Group. “Competition Levels in Arab Cellular Markets & Privatization Levels in Arab Cellular and Fixed Markets” includes the 2004 Cellular Competition Intensity Index and an analysis on the region’s mobile market.

Jordan tops the list as the most competitive Arab market with 84 percent competition intensity. The United Arab Emirates (UAE) trails the list with just 13 percent competition within its market, due to monopoly and duopoly markets.

“[Privatization] has completely transformed the landscape in countries like Algeria, Jordan, Yemen, Saudi Arabia, Oman, Bahrain, Egypt, Morocco, Iraq, and many others,” Arab Advisors Group general manager Jawad Abbassi told ClickZ Stats. “Most Arab countries now have private cellular operators alongside government-owned or partially privatized operators.”


Cellular Competition Intensity Index, 2004 (%)
Jordan 84
Palestine 73
Algeria 66
Iraq 62
Morocco 60
Saudi Arabia 55
Yemen 54
Egypt 51
Tunisia 49
Kuwait 43
Lebanon 42
Syria 41
Bahrain 36
Sudan 32
Libya 29
Oman 26
Qatar 18
United Arab Emirates 13
Source: Arab Advisors Group, September 2005

In the Arab world, Palestine is the most privatized market with 0 percent government proportionate share of revenues. Jordon ranks second, with a 23 percent governmental share. Municipality rules in the UAE (60 percent), Saudi Arabia (70 percent), and Tunisia (80 percent), where government-run cellular services dominate.

Countries that rank high for governmental control in the privatized sector aren’t entirely municipal. Abbassi said the UAE and Saudi Arabia have partially privatized their stated-owned operators. He also noted Tunisia is planning to sell a stake in Tunisia Telecom to a strategic partner. All three have plans to liberalize additional segments of the market.


Most Privatized Cellular Markets, 2004 (% government proponent revenue share)
Palestine 0
Jordan 23
Sudan 27
Bahrain 34
Yemen 39
Syria 40
Algeria 41
Kuwait 45
Egypt 47
Morocco 55
Qatar 55
United Arab Emirates 60
Saudi Arabia 70
Tunisia 80
Source: Arab Advisors Group, September 2005

Market development gives new mobile carriers and services the opportunity to enter the market.

“Most cellular operators in competitive Arab countries — and even some monopoly ones — are trying hard to diversify their revenue streams and get more data revenues as voice rates drop,” said Abbassi.

The Cellular Competition Intensity Index looks at the number of operators, packages, and services available in each of the 18 countries the Arab Advisors Group covers. Each category is assigned a certain weight according to its importance as an indicator of competitive behavior.