The Middle East's Mobile Market
As Arab countries privatize their cellular markets, competition and service opportunities emerge.
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.
