Arab Advisors Group
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Interconnection rates in Arab telecom markets: Quite different approaches.
Monday, December 23, 2002

New research from Arab Advisors shows that Arab telecom markets have very different approaches to interconnection regimes.

December 23, 2002 -

With the entrance of new operators, the Arab communications markets increasingly have new structures to accommodate the transition from monopoly markets to more competitive ones. One of the more important issues in this transition is the Interconnection rates and regimes between the different public networks.

As more Arab markets experience liberalization, the issue of public networks' interconnection increases in importance. A newly released report, "The Mobile and Fixed interconnection regimes in the Arab World." was released to the Arab Advisors Group's ( Strategic Research Service subscribers on Dec 18, 2002. The research note overviews the current interconnection rates applied in some of the Arab countries.

"The Arab communications markets are mainly monopoly markets, especially in the fixed services. As these markets accommodate new telecom operators as a result of liberalization, the presence of fair and regulated interconnection regimes becomes increasingly important and a major factor in the success of the liberalization efforts." Arab Advisors Group's analyst, Hala Baqain wrote in the report.

The report analyses seven Arab Countries that have cellular duopolies and shows that the interconnection regimes in place vary markedly. The report fully lists the prevailing interconnection rates in each of the examined markets.

"Syria has no mobile to mobile interconnection while it has symmetrical interconnection rates for traffic to and from the fixed networks. Lebanon too has a collect and keep model for GSM traffic. Egypt, Jordan and Morocco have interconnection rates for all traffic and are not necessarily symmetrical. Kuwait has a collect and keep model that is currently being phased out. Similarly, Algeria's initial collect and keep model for GSM traffic will be ended in 2003." Ms. Baqain wrote in the report.

"The Arab Advisors Group sees no justification for having asymmetric interconnection rates between different networks. The long-term interest of the Arab consumers and the entire communications market at large lies in cost based pricing and competition. Therefore, the responsibility lies on the operators and the regulators, where existent, to insure that the markets move away from interconnection rates that are not entirely cost based. Eventually when the Arab communications markets host healthy competition and fair pricing the trend should move towards the application of the simpler "collect & keep" interconnection model." Ms. Baqain added.

The Arab Advisors Group's team of analysts in the region has already produced more than 135 reports on the Arab World's communications markets. The reports can be purchased individually or received through an annual subscription to Arab Advisors Group's ( Strategic Research Service. To date, Arab Advisors Group has served more than 60 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.

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