Arab Advisors Group
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Arab Advisors Group Predicts Rapid Consolidation and Impending Shakeout Amongst ISPs in the Arab World
Tuesday, April 3, 2001

First report of its kind provides a market overview and analysis of recent mergers and acquisitions in the Arab World's ISP landscape

AMMAN, Jordan, April 3, 2001 -
Latest research by the Arab Advisors Group (, a specialized new economy strategic research and consulting company, predicted rapid consolidation amongst ISPs in the Arab world, through mergers and acquisitions, with the emergence of regional service providers covering several markets across the region.
The findings and analysis, which were released to subscribers of the Arab Advisors Group's Strategic Research Service, are based on comprehensive primary research and in-depth analysis of a number of recent mergers and acquisitions amongst ISPs in Egypt, Jordan, Saudi Arabia, Kuwait, and Lebanon.
The report, entitled "ISPs in the Arab World: A market overview and analysis of recent mergers and acquisitions in the Arab World's ISP landscape" provides an overview of the competitive and regulatory aspects of the major Arab World's Internet markets, along with detailed finances and comparisons of six landmark recent mergers and acquisitions that took place over the past few months. Additionally, it provides case studies and strategy analysis of five emerging regional ISP plays, along with their respective deals anatomy, strengths, weaknesses, and future prospects.
"Five years after the emergence of the first liberalized ISP markets in the Arab world, the industry is undergoing rapid consolidation towards a more mature market with the emergence of regional players that can leverage the economies of scale, and provide a solid service," Arab Advisors Group report stated.
According to the report, fully competitive Internet markets in the Arab world, such as Lebanon, were multiple ISPs operate, along with high net worth markets such as the United Arab Emirates, were able to achieve highest Internet accounts penetration rates of 5% and 8% respectively, while partially competitive markets such as Saudi Arabia, where the Internet backbone is still regulated by the government had a disappointing penetration rate of only 0.75%, well under the estimated potential of the Saudi market. Other markets such as Egypt and Jordan, that also enjoys a full competitive status, were mainly pulled back by a highly fragmented and undercapitalized ISP market that prevented any substantial investment in marketing the services to potential customers, and limited level of support and value added services offered resulting in low penetration rates as well.
The report also revealed a wide range of valuation benchmarks amongst the recent mergers and acquisitions in the region. In addition to providing price per user and comparing Average Return Per User (ARPU) and earnings amongst other metrics in comparing the various deals that took place.
The 22-page report, which is also available for purchase online through the Arab Advisors Group web site ( concludes by providing a unique in-depth analysis on the future prospects of ISPs in the Arab world, outlining various positive regulatory improvements as key drivers for the growth of this market, and attraction of foreign investment. However, the report warns of an upcoming shakeout threatening small sized ISPs, who should be considering all of their strategic alternatives with the emergence of few major regional players who are expected to enjoy the largest market share.

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