"Real" competition expected to start in Kuwait's GSM market

'Kuwait's cellular market is on track towards full competition and much more responsive GSM operators

June 20, 2001 -

Arab Advisors Group has just released a research note analyzing the decision taken by the Kuwaiti government to sell half of it's stake in MTC (Mobile Telecommunication Co.), and pointing out how the implication of this decision will affect the service quality and cellular rates.

The research note, which was released to the subscribers of Arab Advisors Group's Strategic Research Service, and is available for online purchase through the company's website (www.arabadvisors.com), views the government decision as indicative of its intention to reduce its stake in MTC to equal to that in NMTC (National Mobile Telecommunication Co.)

"However, full competition can only be expected to be achieved as soon as the Kuwaiti government decides to withdraw most of its power from both operators" Sami Sunna', an Arab Advisors group analyst, said.

MTC enjoyed 13-year of monopoly, since 1986, until NMTC launched its services in Kuwait. However the Kuwaiti government continue to own substantial shares in both operators.

The research also provides a summary of Kuwait's addressable cellular market. Which appears to be lower in percentage terms when compared with other countries of similar population and income levels.

"NMTC succeeded in attaining a 25% market share by the end of 2000. We anticipate that this rate will rise by the end of 2005, with prepaid subscribers accounting for a major part of the NMTC subscriber base."
Explained Sami Sunna'.

According to the research note the obvious growth in the number of prepaid GSM subscribers highlights the important role of prepaid services within the revenue streams of the GSM operators in Kuwait.

The Arab Advisors Group concludes in its research note that the decision of selling-off almost half of MTC's government shares will guide the two GSM duopolies towards full competition. Furthermore the government might open the door for full competition by either allowing other GSM
operators to enter the market or by selling -off its entire shares in both companies.