As the country’s GSM boom continues, Syria could have a third cellular operator by 2008.

April 25, 2005

Syria’s GSM subscribers grew at a massive CAGR of 210 % between 2000 and 2004, reaching a penetration rate of 13.8% by end of 2004. Much room remains for growth and the Arab Advisors Group expects the penetration rate to triple to 46% in the coming 5 years.

The fixed line market and international communications in Syria remain under a strict monopoly of the Syrian Telecommunication Establishment (STE). The STE is currently the sole provider for infrastructure and is responsible for all types of telecommunications. However, there is a direction towards having multiple entities providing telecommunication services, and the contribution of the private sector in value added services such as payphones. The STE can also contract other parties to provide some telecommunication services for its benefit.

Barring a major change in policy, the STE is expected to sustain its monopoly till 2010, when full liberalization of the telecom market is expected to happen. Syria is a signatory to the European partnership agreement, which obligates market liberalization six years after signing the agreement. This means a form of competition in the fixed, mobile, Internet and Datacomm markets.

A new report, “Syria Communications Projections Report 2005” was released to the Arab Advisors Group’s Telecom Strategic Research Service subscribers on April 20, 2005. This report can be purchased from the Arab Advisors Group for only US$ 850. The 92-pages report, which has 72 detailed exhibits, provides a detailed and comprehensive analysis of the Syrian fixed and cellular markets. The report fully profiles the Syrian Telecommunication Establishment (STE) and the two GSM operators (Syriatel and Areeba). Please contact the Arab Advisors Group to get a copy of the reports Table of Contents.

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.

“The two private mobile operators in Syria have revenue sharing agreements with the STE. The GSM build-operate-transfer (BOT) method used by the STE was a way to allow foreign private investments in the telecom sector without relinquishing the control of the public sector. Companies that are permitted to operate in the telecom sector are subject to the provisions of Investment Law No. 10. Through the BOT agreements, both GSM operators are allowed to operate for up to 15 years.” Serene Zawaydeh, Arab Advisors Senior Research Analyst wrote in the report. “According to the BOT agreements, the STE has the right to introduce a third GSM operator after seven years if the STE so wishes. A third operator could enter the market in 2008, as per the ministry’s strategy. It could be the STE itself or a third private cellular operator should the government policy decide so.” Ms. Zawaydeh added.

The Arab Advisors Group’s team of analysts in the region has already produced over 370 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 230 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.