Qtel, comfortable in its home market, ventures abroad with a GSM network in Oman.

February 07, 2005

Extremely profitable Qtel is leveraging its cash flow in regional expansions. This will be a boon for regional telecom markets and will open opportunities for the monopoly operator outside its home market. Qtel could face GSM competition in Qatar in 2006, the Arab Advisors Group believes. Arab Advisors Group projects cellular subscribers in Qatar to reach 702,000 by end of year 2008, translating into a penetration rate of 87%. This corresponds to a CAGR of 13.3% during the period 2003-2008.

Qatar Telecom (Qtel), Qatar’s publicly traded and monopoly telecom operator is the sole provider of fixed, mobile, Internet and Datacomm services in Qatar. Leveraging a very comfortable monopoly in its home market, Qtel is astonishingly profitable: Its net profit margin has reached the 65% mark in 2004! The operator is venturing into Oman in what could be a series of regional expansion moves.

A new report, “Qatar Communications Projections Report 2005” was released to the Arab Advisors Group’s Telecom Strategic Research Service subscribers on January 24, 2005. This report can be purchased from the Arab Advisors Group for only US$ 850. The 70-pages report, which has 52 detailed exhibits, provides a detailed and comprehensive analysis of the telecommunications markets in Qatar and the national operator QTel.

Any investment in this report will count towards an annual Strategic Research Service subscription should the service be acquired within three months from purchasing the report.

The investment can also count towards attending Arab Advisors’ second annual Media and Telecoms Convergence Conference on June 11 & 12 2005. More information on the conference can be seen at http://www.arabadvisors.com/Convergence/schedule.htm. Alternatively contact the Arab Advisors Group for full information on the conference, agenda and sponsorship opportunities.

“On August 3, 2004, a separate regulatory authority to govern the telecom sector was established by the Qatari government. The decree number 36 of 2004 was issued for establishing the Supreme Council for Communication and Information Technology, the SCCIT. This committee was envisioned in 1998 as part of the privatization decision. This followed Qatar’s joining of the WTO on January 13, 1996 but until now there is no clear-cut strategy or timeline on the full liberalization process of the telecommunication sector in Qatar. To date, Qtel remains responsible for issuing all regulations concerning Qatar’s Telecommunication markets.” Ms. Muna Sunna, Arab Advisors Research Analyst wrote in the report.

“One of Qtel’s important achievements this year was winning the second GSM license in Oman in June 2004, after signing a Memorandum of Understanding with TDC, a major telecom service provider in Europe in March 2004. Qtel and TDC plan to invest US$ 1.7 billion over the first ten years in Oman’s telecom market; however, Qtel financial commitment to this project is QR 747,200,000 (US$ 205,274,000). Cellular penetration in Oman stood at 28.9% by end of November 2004, which is the lowest in GCC countries. Commercial Launch of Nawras Telecom is expected in the first quarter of 2005.” Ms. Sunna added.

The Arab Advisors Group’s team of analysts in the region has already produced close to 320 reports on the Arab World’s communications and media markets. The reports can be purchased individually or received through an annual subscription to Arab Advisors Group’s (www.arabadvisors.com) Strategic Research Services (Media and Telecom). To date, Arab Advisors Group has served more than 210 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.