Stage is Set for ‘Hyper-Competitive’ Regional Markets.

May 31, 2006

Arab Advisors Conference to discuss competition, threats, revenues, opportunities, business models for operators in the region as liberalization drives competition and subscribers growth.

A Hyper-competition is set to dominate the Middle East’s telecommunications and media markets moving forward, driven by strong subscriber growth and the opening up of multi-license markets, according to Arab Advisors Group. The market is also seeing the emergence of a number of regional ‘super-operators’ with operations in multiple markets, including UAE’s Etisalat, Egypt’s Orascom, Kuwait’s MTC and Wataniya Telecom.

Hyper competition is also present in the region's free-to-air satellite TV market. In the last four months of 2005, the number of FTA channels on Arabsat and Nilesat increased by almost 30% from 155 to 200 channels, and 141 of these channels have an online presence. This competition has implications for the industry including changing its traditional revenue models; while the simple average of TV advertising rates on major satellite channels dropped by 30% last year alone, over 25% of all FTA satellite channels are fully interactive, using SMS chatting, voting and other services to grab a share of the telecom revenue pie. At the same time, pay TV operators are adopting new strategies including exclusivity deals, diversification and vertical integration in order to remain competitive. The region's local TV and radio markets are also slowly being liberalized to keep pace with the SAT market boom.

The liberalization of markets is not only driving competition but is also driving the agenda at the Arab Advisors Group Media and Telecommunications Convergence Conference 2006, which will be held in Amman on 6th and 7th June at the Four Seasons Hotel.

“The Arab World’s cellular subscriber base reached 85 million subscribers in 2005 and is still growing strongly,” said Jawad Abbassi, General Manager of Arab Advisors Group. “The challenge for today’s operators is hyper-competition at both the local and regional level and this is driving a renewed need for operators to find and leverage competitive advantage.”

The Media and Telecommunications Convergence Conference 2006 is set to highlight the opportunities, threats, future, and competition for operators in the region. The two days conference, which is being held for the third year in a row, will witness the participation of local, regional and international telecom and media leaders. Key players, decision makers and representatives of telecom and media sectors will join forces to discuss opportunities available in regional markets due to liberalization. This year the Conference will focus on “The dynamics of media and telecom convergence in increasingly more liberalized telecom and media markets.”

A new report issued recently by Arab Advisors Group “ A scorecard of key Performance Indicators of Arab Telecom Operators”, showed that Arab telecom operators served 85 million cellular subscribers and 30 million mainlines in 2005. The report stated that Saudi Arabia’s Al Jawal and Maroc Telecom sustained their top rankings by end of 2005, with 11.845 million and 8.237 million subscribers respectively. Orascom Telecom Algerie ranked as the third largest mobile operator in the region with 7.109 million subscribers at the end of 2005. The report analyzes and ranks 18 fixed voice operators and 39 cellular operators in eighteen Arab countries.

Bahrain and UAE had the highest penetration rates in cellular and fixed line rates. Bahrain recorded the highest cellular penetration rate in 2005, which hit 105.8% and 26.6% for fixed line penetration rate. UAE scored 99% in cellular penetration rate and 27% in fixed line penetration rate.

The simple average for operators’ Average Revenue Per User (ARPU) was US $ 26 in 2005 for cellular services compared to a fixed line ARPU of US $ 45.7. Qatar’s Qtel recorded the highest ARPU for both fixed and cellular services in 2005.

“With competition taking its toll on rates and voice ARPUs, the convergence of telecom and media is paving the path toward the launch of new services that the operators and content producers hope will be the growth areas of the near future.” Added Abbassi. “The Conference will enable participants to share their expertise, benefit from case studies, success stories and network with their counterparts to establish new business leads to further enhance their services, attract more customers and raise their revenues.”

The two days conference will tackle various issues through case studies and presentations, like broadband connectivity, liberalization and competition, voice over IP, mobile media content, mobile TV, business models in era of convergence, triple play solutions, telecom and media market regulation, the Arab Sat TV industry, mobile data services, future winning strategies for telecom operators in addition to many other topics.

Regional and local operators joined forces to support the Media and Telecommunications Convergence Conference and sponsored the major regional media and telecom conference. The main conference sponsor is UAE’s Etisalat. The conference is also sponsored by Jawwal, Batelco Jordan, Fastlink, TE-Data, Jordan Telecom, Kalam, ROAMWARE. Spot On PR is the conference PR Partner. Conference partners also include Microsoft Eastern Mediterranean, Al Bawaba, menafn.com, Maktoob.com, CommsMEA and Globitel. The Information Technology Association of Jordan (int@j) is also supporting the conference.

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The Arab Advisors Group’s team of analysts in the region has already produced close to 570 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 over 370 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.