Arab Advisors Group
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The gulf region's first GSM duopoly market proves to be a spectacular success.
Wednesday, March 6, 2002

A newly released report from the Arab Advisors Group ( fully analyzes the Kuwaiti communications market. The small gulf state's new level of competition in the GSM market has definitely yielded excellent results. Following the introduction of second GSM operator in 2000, GSM penetration almost tripled from 15% in 1999 to 42% in 2002. The success of the privatization and liberalization of the GSM market will boost the government's drive towards going ahead with privatization in the fixed services telecom segment in the country.

March 06, 2002 -

Kuwait is a market of some contradiction. Amongst the Arab Gulf countries, Kuwait is the only one with some level of competition in the lucrative GSM market segment. The country has had a GSM duopoly since 2000, which has radically changed the growth dynamics of the market. However, Kuwait remains the only country in the Gulf whose fixed services segment (fixed lines) remains in the hands of the Ministry of Communications alone. Q-Tel, Batelco, and Etisalat are already publicly traded companies in Qatar (in 1998), Bahrain (in 1981), and the UAE (in 1979) respectively. In addition Saudi Arabia and Oman have already commercialized their operations into Saudi Telecom Company (in 1998) and OmanTel (in 1999).

A new report, entitled Kuwait Communications Projections report 2002, was released to the Arab Advisors Group's ( Strategic Research Service subscribers in March 2002. The 57-pages report is the culmination of painstaking primary research over more than two months by Arab Advisors Group's analysts. The report found that the clear success of the GSM privatization and liberalization initiative will strengthen the government's arguments for pushing ahead with privatizing the fixed services segment of the market.

"On January 21, 2002, the minister of telecommunications, Sheikh Ahmad Abdullah Al Sabah, announced that a law for the privatization of fixed line telephone services is likely to pass during the year 2002." Sami Sunna', Arab Advisors Group analyst, said. "Given the success in the GSM segment, the Arab Advisors Group expects the bill to face less resistance and a second fixed operator to enter the Kuwaiti market in 2005." Mr. Sunna' added.

The Arab Advisors Group projects Kuwait's PSTN mainlines to grow by a Cumulative Annual Growth Rate (CAGR) of 4.5% between 2001 and 2006 to reach 590,000 mainlines by end of 2006, a 25% penetration rate. We expect a second fixed line operator in 2005-2006. The expected second entrant will probably focus on broadband solutions and would need strong backing from another local operator, such as one the GSM operators.

The existing two GSM operators, MTC and Wataniya will not only be a boon for future fixed services competition, but have already been a major boon for GSM users in Kuwait. Competition, and the introduction of prepay service by both operators, spurred unprecedented growth in Kuwait's cellular market. Mobile services tariffs in Kuwait have declined dramatically and total number of subscribers grew from 335,000 (i.e. a penetration rate of 15%) in 1999 to reach 628,100 (i.e. a penetration rate of 28%) by the end of year 2000, an impressive growth rate of 87.5% for that year. During the year 2001, total cellular subscribers in Kuwait grew by 48% from the previous year to reach 930,256 subscribers, with 542,031 subscribers of MTC and 388,225 subscribers of Wataniya. Currently, MTC's market share amounts to 58% with the remaining 42% belonging to Wataniya.

The Kuwait Communications Projections Report-2002 includes 5-year historical figures on 40 plus indicators of the communications market as well as 5-year projections (till 2006). The report's table of content can be downloaded in PDF format from Arab Advisors Group's web page ( The report analyses the operations of the operators in the market and presents detailed profiles of their operations and strategy.

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