Arab Advisors Group
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Yemen's GSM duopoly: A choice between Coke and Pepsi?
Tuesday, May 25, 2004

The introduction of two GSM operators in Yemen in 2001, and prepaid GSM service, has grown the cellular market in the country from a negligible base of less than 35,000 to close to 700,000 by yearend 2003. Still, the duopoly competition is too rational, with similar rates and similar packages. The Arab Advisors Group believes that enhanced competition in 2005, when 4 digital cellular networks are expected to be operational, will grow the market by a CAGR of 32% between 2004 and 2008 to over 11% penetration by 2008.

A new report, "Yemen Communications Projections Report" will be released to the Arab Advisors Group's Strategic Research Service subscribers on May 26, 2004. This report can be purchased from Arab Advisors Group for only US$ 850. The 51-pages report, which has 50 detailed exhibits, fully analyses the Yemeni telecommunications (fixed and wireless) market and provides five-year forecasts of more than 40 Demographic, service, revenue and Infrastructure indicators. It also fully analyses all the major operators in the country, PTC, TeleYemen, Sabafon and Spacetel Yemen and their strategy. The report also fully analyses the equipment vendors' competitive landscape.

Any investment in this report will count towards a Strategic Research Service subscription should the service be acquired within three months from purchasing the report.

Purchasing the report also can count towards attending the Arab Advisors Group's Media and Telecommunications Convergence Conference in June 2004 in Amman.

"The Yemeni telecom sector faces many challenges unique to the geographic and demographic landscape in the country. Obstacles facing operators in the country, include such things as coverage of remote areas, low GDP per capita, high illiteracy, and a vague regulatory framework. The fixed line market is currently a monopoly of the government-owned Public Telecommunications Company, or PTC." Yaman Al Jundi, Arab Advisors Research Analyst, wrote in the report. " Another government owned company, TeleYemen, provides international direct dialing, leased lines, and an analog cellular service. Digital GSM services are provided by Sabafon and Spacetel Yemen, two operators that simultaneously began offering services in 2001. The year 2005 will bring major changes to the telecom sector, as a new GSM company is expected to be introduced, along with the upgrade of TeleYemen's analog service to a digital one. In all, it is expected that there will a total of four digital cellular operators by the beginning of next year." Mr. Al Jundi added.

PSTN monthly ARPU in Yemen declined at a CAGR of 10.5% during the period 1998-2003, while total PSTN revenues increased at a CAGR of 7.2% during the same period, due to the growth in the subscriber base. Similarly, the report's analysis shows that monthly cellular ARPU in Yemen declined at a CAGR of 11.9% during the period 1998-2003, while total cellular revenues increased at a CAGR of 83% during the same period, again due to the increases in the subscriber bases. Arab Advisors Group projects Yemen's total PSTN and cellular revenues to increase to over US$ 600 million by 2008.

This report comes as part of Arab Advisors Group's continued research and analysis of the Arab communications, media and information technology markets. The Arab Advisors Group is organizing a Media and Telecommunications Convergence Conference in June 2004 in Amman under the patronage of his Excellency, Dr. Fawaz Zubi Jordan's Minister of ICT.

The Arab Advisors Group's team of analysts in the region has already produced more than 260 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 150 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.

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