Competition Dynamics in Kuwait's GSM market: MTC strengthens its small lead in 2003.

April 18, 2004

MTC-Vodafone maintained its postpaid edge in 2003, while Wataniya remains a predominantly prepaid service provider. With the Kuwaiti market approaching saturation, the two operators have expanded their operations outside Kuwait, establishing themselves as strong regional operators. MTC reversed the 2002 results in 2003 and grabbed 57% of total market additions in 2003. This has moved its market share from 53% in 2002 to 54% in 2003.

There are 1.7 million mobile subscribers in Kuwait translating into a penetration rate of 74%. The high penetration is the healthy result of the duopoly competition between Kuwait's two mobile operators, MTC-Vodafone and Wataniya Telecom. As the competition for market dominance in Kuwait continues, and with the cellular market nearing saturation, the operators have been scrambling to achieve the technological edge to win over customers. Kuwaiti mobile users already enjoy services such as online bill payment, GPRS services that offer downloads of music and games, and MMS services.

A new report, "Kuwait's MTC-Vodafone and Wataniya: MTC strengthens its small lead in 2003." was released to Arab Advisors Group (www.arabadvisors.com) Strategic Research Service subscribers on April 14, 2004. The 5-page report has 7 detailed exhibits and fully analyzes the market share and ARPU dynamics of Kuwait's two GSM operators.

This report can be purchased from Arab Advisors Group for only US$ 250. Any investment in this report will count towards a Strategic Research Service subscription should the service be acquired within three months from purchasing the report.

Purchasing the report will also count towards attending the Arab Advisors Group’s Media and Telecommunications Convergence Conference in June 2004 in Amman. http://www.arabadvisors.com/Convergence2004/schedule.htm

"Kuwait remains a predominantly prepaid market, with prepaid subscribers constituting almost 80% of cellular users. Wataniya holds the edge in the prepaid market, with a 53% market share. MTC-Vodafone holds a dominant 81% of the postpaid market share." Yaman Al Jundi, Arab Advisors Group's research analyst wrote in the report. "The mobile market grew by 30% in 2003. MTC-Vodafone lost postpaid subscribers for the third straight year, recording a 4% drop in 2003. Wataniya recorded an impressive 90% growth in postpaid subscribers, but its overall postpaid subscriber base stands at only a quarter of MTC-Vodafone's postpaid subscribers base." Mr. Al Jundi added.

The Arab Advisors Group believes the Kuwaiti mobile market to be the model for healthy competition in the Gulf region. The cellular penetration in Kuwait jumped from 28% in 2000 to reach an impressive 74% in 2003. The result of the competition has been a race to offer improved value-added services and technologies, which ultimately will benefit the individual mobile user, as well as the operators themselves, since these services will surely enhance revenues and profits.

The Arab Advisors Group's team of analysts in the region has already produced more than 250 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 130 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.