Arab ICT Use Report 2009

Country ICT Profile, Service Providers, Key Telecom Players,
Penetration & Growth Trends
Copyright 2009-2010 Madar Research Group. All rights reserved.
Arab ICT Use Report - 2009
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TABLE OF CONTENTS
V E R V I E W
.......................................................................................................................4
A N A L Y S I S O F M A J O R T R E N D S ......................................................................9
M OB I L E P H O N E S U BS CR I PTI O N S ..............................................................................................9
F I X E D L I N E S U B S CR I PT I O N S .................................................................................................... 14
M O B I L E - T O - F I X E D - L I N E S U B S C R I B E R S ............................................................................. 19
I N T E R N E T U S E R S ...................................................................................................................20
C O M P U T E R I N S T A L L E D B A S E ..............................................................................................23
I N D E P E N D E N T R E G U L A T O R Y A U T H O R I T I E S A N D L I B E R A L I Z A T I O N ................................26
C O U N T R Y I C T P R O F I L E S ................................................................................28
I C T P E N E T R A T I O N I N G C C - 2 0 0 8 ...................................................................................28
B A H R A I N : ...........................................................................................................................29
K U W A I T .............................................................................................................................. 31
O M A N .................................................................................................................................33
Q A T A R ................................................................................................................................36
S A U D I A R A B I A ..................................................................................................................38
U N I T E D A R A B E M I R A T E S .................................................................................................42
G C C B R O A D B A N D P E N E T R A T I O N ...................................................................................45
I C T P E N E T R A T I O N I N L E V A N T 2 0 0 8 .............................................................................47
E G Y P T .................................................................................................................................47
I R A Q ....................................................................................................................................50
J O R D A N ..............................................................................................................................52
L E B A N O N ............................................................................................................................54
P A L E S T I N E ..........................................................................................................................56
S Y R I A ..................................................................................................................................58
I C T P E N E T R A T I O N N O R T H A F R I C A - 2 0 0 8 ....................................................................... 61
A L G E R I A .............................................................................................................................62
L I B Y A ..................................................................................................................................65
M O R O C C O ..........................................................................................................................67
T U N I S I A ..............................................................................................................................70
O T H E R A R A B C O U N T R I E S .................................................................................................... 72
S U D A N ................................................................................................................................ 72
Y E M E N ................................................................................................................................75
A P P E N D I X ...................................................................................................................... 77
A C T I V E M O B I L E P H O N E O P E R A T O R S I N T H E M E N A R E G I O N ........................................ 77
A C T I V E F I X E D L I N E O P E R A T O R S I N T H E M E N A R E G I O N ...............................................78
P O P U L A T I O N Q U E S T I O N & I T S I M P A C T O N G C C P E R F O R M A N C E I N D I C A T O R s......... 80

OVERVIEW
The Arab world continued to make significant progress in the adoption of information and
communication technology (ICT) in 2008, with a strong trend for better services and increased
competition extending into the fixed line and Internet sectors. The average score of the 18
MENA economies on Madar Researchs Arab ICT Use Index increased by 0.27 points to yield
1.01 at 2008 from 0.83 in 2007.
Madar Researchs annual Arab ICT Use Index examines four major indicators for each of the
18 MENA economies: mobile phone subscribers, fixed-line subscribers, Internet users and
installed computers. The index is calculated by adding the values of these four indicators for
each country and dividing the sum by its population. A higher score on the index indicates
more aggressive ICT adoption.
Before the economic downturn, the oil rich countries of the MENA region had largely
benefited, but to varying degrees (depending on their reserves and production quotas), from
the very high oil and gas prices. More than ever, these countries now realize the need to use
this wealth for upgrading their infrastructure, developing their human resources and
diversifying their economies. They are also keen to use wealth for enhancing the knowledge
component of their economies as a safeguard against risky and perhaps less profitable future.
All these factors can be seen as a major contributor to growth in the telecom industry across
the MENA region.
Arab ICT Use Indicators 2008

350,000,000
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
2007
Population
Mobile Subscribers
2008
Fixed lines
Internet Users
PC Installed Base
The country with the highest fixed line penetration, the United Arab Emirates (UAE), topped
the 2008 index, with a score of 2.39. The UAE was among the top five for almost all the ICT
sectors. Industry analysts, however, predict the economic slowdown (or recession) and low oil
prices to lead to a sharp decrease in UAEs population growth in coming years, thus shrinking
mobile subscriber base. Regardless of the economic slowdown or the decline in transient
labor population analysts believe that subscribers growth should come from business visitors,
4

tourism, dual SIM-card holders, mobile broadband users, and Internet/data services users.
The country is still regarded as a benevolent cash cow for its incumbent telecom service
providers. The UAE mobile phone penetration is erroneously regarded by most sources as the
highest in the world; however, according to Madar Research the actual penetration is only
around 137.3%, as based on a population figure of 7,338,140. The UAE topped the fixed line
and Internet users penetration lists, and stood among the top five for the other indicators
making up the index, with 22.35% fixed line penetration, 137.35% mobile phone penetration,
45.7% Internet penetration and 33.73% computer penetration.
ARAB ICT USE INDEX - 2008
RANK
COUNTRY
POPULATION
MOBILE PHONE
SUBSCRIPTIONS
UAE
7,338,140
Bahrain
Qatar
Saudi
Arabia
Kuwait
SUBSCRIPTIONS
INTERNET
USERS
PC INSTALLED
BASE
INDEX
10,079,000
1,640,000
3,353,600
2,475,451
2.39
1,156,114
1,453,000
220,386
435,600
407,100
2.18
1,553,729
1,946,343
263,363
592,200
498,080
2.12
25,239,067
36,059,212
4,123,000
7,936,000
4,755,392
2.09
3,441,813
3,382,733
547,111
1,272,433
1,021,614
1.81
6
7
8
Libya
Oman
Jordan
6,357,000
7,250,000
910,000
966,000
729,675
1.55
3,013,184
3,219,865
274,178
540,150
416,000
1.48
5,850,000
5,438,000
519,000
1,441,000
814,660
1.40
Tunisia
10,377,200
8,411,630
1,239,000
2,066,628
902,521
1.22
10
Algeria
34,634,000
27,031,474
3,687,603
3,965,000
2,000,700
1.06
11
Morocco
31,345,356
22,816,000
2,991,185
4,200,000
1,904,000
1.02
12
Egypt
76,054,000
44,526,000
11,900,000
12,570,000
4,295,590
0.96
13
Lebanon
4,209,000
1,436,000
527,500
1,196,800
674,360
0.91
14
Syria
19,880,423
7,789,563
3,633,400
3,432,000
1,430,000
0.82
15
Iraq
30,581,365
18,287,470
1,755,000
3,084,500
1,337,050
0.80
16
Palestine
4,212,000
2,022,163
357,000
596,700
210,993
0.76
17
Yemen
23,248,500
6,059,000
1,337,122
1,570,800
592,551
0.41
18
Sudan
41,810,000
11,437,000
356,500
3,479,000
1,292,562
0.40
330,300,890
218,644,453
36,281,348
52,698,411
25,758,299
1.01
TOTAL
FIXED LINE
ICT
Source: Madar Research
Coming in second place, Bahrain scored an overall 2.18% on the 2008 Arab ICT Use Index,
compared to 2007 a huge climb from its score of 1.78 in 2007. Bahrain boasts the Middle
Easts most liberal and advance information and communication technology infrastructure
and policies. Partly due to efforts by Bahrains TRA (Telecommunication Regulatory
Authority), the country has the highest computer installed base in the MENA region and the
third highest Internet user penetration rate of 37.685. In an effort to provide reliable
broadband services to its end users, the TRA in Bahrain recently signed an agreement with
Epitiro to continually perform measurements and assessments of its broadband services.
Through this quality assessment, the TRA is aiming to provide the consumer with information
on Internet quality of services to assist in their choice of provider. Fixed line penetration
5

registered 19.06% and Bahrain ranked third overall on the index in mobile phone penetration,
at 125.68%, and first in the MENA region in computer penetration, at 35.23%.
Mobile Vs. Fixedline Penetration Rate - 2008
160%
140%
Pen etration Rate
120%
100%
80%
60%
40%
20%
0%
Yemen
Sudan
Lebanon
Syria
Palestine
Egypt
Iraq
Morocco
Algeria
Tu nisia
Jordan
Kuwait
Oman
Libya
Qatar
Bahrain
UAE
Saudi Arabia
Mobile Penetration
Fixedline Penetration
In third place, Qatars overall score of 2.12 (from 1.70) on the 2008 Arab ICT Use Index also
represents a significant rise over its 2007 score. Qatars Qtel still holds a monopoly on the
countrys fixed line, mobile and Internet services. Although Vodafone Qatar (a consortium
made up of Vodafone Europe and the Qatar Foundation) is the second entrant to Qtels 22year monopoly over the telecom market, it hasnt yet began full operations in Qatar. It has so
far only initiated test operations, gradually powering up the first 1,000 customers. According
to recent reports, Vodafone Qatar was scheduled to launch services in March 2009 but this
was put back to June, with the Supreme Council for Information and Communication
Technology (ictQatar) revising the terms of Vodafones licensing agreement in April, giving it
until September 1 to establish coverage over 98% of the country. Qtels Nawaras had also
been granted a first-class fixed-line license for a 25-year term by the government of Oman.
Qatar ranked third overall behind the United Arab Emirates and Bahrain in computer
penetration in the MENA region, with a penetration rate of 32.06%. Meanwhile, it ranked
second in Internet penetration (38.11%) and fixed line penetration (16.95%). Qatars mobile
phone penetration of 125.27% ranked it fourth in the Arab world in 2008.
Saudi Arabia held fourth place on the 2008 index, with an overall score of 2.09, a 0.43 point
above its 2007 score of 1.66. Its rank on the index is buttressed mainly by the countrys high
mobile phone penetration (142.87%) which ranked it first in the MENA region as a regional
telecom war heats up and the telecom providers are under intense pressure to improve
profitability, with huge rivals like STC, Kuwait's Zain and Emirates Telecommunications
competing in the region. Mobily, STC's most serious rival, recently posted a 50 percent rise in
second-quarter net profit over STC 22% profit drop in second-quarter profit, citing foreign
expansion costs and higher roaming fees had hurt profitability. Saudi Arabia ranked fourth in
the Arab world on fixed line penetration (17.38%), and fifth on Internet penetration (31.44%)
and computer penetration (18.84%). A number of Saudi Telecom providers are considering
reducing the charges by almost 70 percent as they seek to increase the number of users.

Meanwhile, Kuwait ranked fifth on the index, with 29.68% computer penetration and 36.97%
Internet penetration, ranking the country in the fourth place. Meanwhile, Kuwaits fixed line
penetration (15.90%) gave it sixth ranking in the MENA region. In spite of a third
operator, Viva, venturing into the Kuwait telecommunication market, the countrys mobile
penetration rate is below 100%, which is low when compared to its GCC counterparts,
especially the UAE which has 137% percent penetration. With a penetration rate of 98.28%
Kuwait is placed fifth in the Arab world on the indicator behind the United Arab Emirates,
Saudi Arabia, Bahrain and Qatar. The country scored 1.81 overall on the index, 0.28 points
behind Saudi Arabia.
Mobile Vs. Fixedline Growth Rate - 2008

100%
80%
Growth Rate
60%
40%
20%
0%
Algeria
Tunisia
Morocco
Jordan
Palestine
Sudan
Lebanon
Syria
Mobile Growth
Kuwait
Saudi Arabia
UAE
Oman
Bah rain
Egypt
Libya
Iraq
Yemen
-40%
Qatar
-20%
Fixedline Growth
Although GCC countries dominated the Arab ICT Use Index by occupying the top five
positions, they did not make the MENA regions list of countries with the highest growth
rates, except for Qatar registering the highest growth rate in mobile subscribers. That
privilege went to a selection of other MENA economies, which have largely underdeveloped
ICT markets where growth tends to be more visible. Libya achieved an impressive 75.76%
growth in the number of fixed line subscriptions in 2008 the strongest in the Arab world
followed by Yemen and Iraq with 30.84% and 25.36% growth, respectively. Growth in mobile
subscriptions was highest in Qatar at 54.47%. In 2008, countries like Lebanon, Jordan and
Tunisia registered negative fixed line growth. Iraq had the highest growth rate in the region
for Internet users and computer installed base, at 55% and 43%, third highest growth rate in
the region both in terms of mobile and fixed lines rising at 43.13% and 25.36%, while Yemen
registered the regions second highest growth rate in the fixed line and mobile segment, at
47.53% and 30.84%, respectively. As the case in Yemen, Moroccos competitive fixed line
service provider market helped drive growth in the sector, at 24.96%. Growth in the Internet
user market in 2008 was dominated by Egypt (45.82%), Syria (43%) and Sudan (42%), while
the top three positions in computer installed base growth went to Iraq (43%), Qatar (41.5%)
and Libya (41%).

Palestine, Yemen and Sudan trailed the Arab world on the 2008 Arab ICT Use Index, ranking in
16th, 17th and 18th place respectively. Yemens score of 0.41 reflects the lowest penetration
rates in the MENA region on three of the four indicators, namely mobile phone penetration
(26.06%), Internet penetration (6.76%) and computer penetration (7.8%). Yemens fixed line
penetration rate saved it from bottoming out on all four indicators of the index, with the
country achieving 5.75% penetration (compared to Sudans 0.85%), ranking Yemen 17th on the
indicator. Meanwhile, Sudan scored slightly lower, 0.40 points, on the overall index and
Palestine 0.76 points.
Unlike 2007, where growth was dominated by mobile phone subscribers, 2008 saw an
impetus growth in Internet users, with the proliferation of online technology advancements
such as audio/video sharing, online gaming, instant messaging and social networking websites
changing the dynamics of the MENAs Internet culture. Internet users surged from 39,396,690
users in 2007 to 52,698,411 users in 2008, registering a 33.76% growth. Computer installed
base was the second-fastest growth sector in 2008, with computers witnessing a 29.65%
growth from 19,866,800 to 25,758,299 computers. Growth was slower for mobile
subscribers, with total subscription numbers increasing 25.03% from 174,877,340 to
218,644,453 subscribers. The slowest growth rate was recorded in the fixed line sector from
32,574,421 to 36,281,348 or 11.38% growth.
Note must be made that discrepancies in historical data for the indicators (whenever present)
are generally the result of corrections made by the various providers to their subscriber bases,
mainly to account for new definitions of subscribers or because of tighter control over
statistical data exercised by newly-established regulatory authorities. In the case of the four
indicators, Madar Research has revised some figures as a result of new developments or data
that have come to light since the estimates were first made.

A N A LY S I S O F M A J O R T R E N D S
M OBILE P HONE S UBSCRIPTIONS
RANK
ARAB MOBILE PHONE PENETRATION BY COUNTRY, 2007-2008

(RANKED BY PENETRATION)
MOBILE PHONE
MOBILE PHONE
COUNTRY
POPULATION
SUBSCRIPTIONS
PENETRATION
25,239,067
7,338,140
1,156,114
1,553,729
6,357,000
3,013,184
3,441,813
5,850,000
36,059,212
10,079,000
1,453,000
1,946,343
7,250,000
3,219,865
3,382,733
5,438,000
142.87%
137.35%
125.68%
125.27%
114.05%
106.86%
98.28%
92.96%
10,377,200
34,634,000
31,345,356
30,581,365
8,411,630
27,031,474
22,816,000
18,287,470
81.06%
78.05%
72.79%
59.80%
Lebanon
76,054,000
4,212,000
19,880,423
4,209,000
44,526,000
2,022,163
7,789,563
1,436,000
58.55%
48.01%
39.18%
34.12%
17
Sudan
41,810,000
11,437,000
27.35%
18
Yemen
23,248,500
6,059,000
26.06%
330,300,890
218,644,453
Saudi Arabia
UAE
Bahrain
Qatar
Libya
Oman
7
8
Kuwait
Jordan
Tunisia
10
Algeria
11
Morocco
12
Iraq
13
Egypt
14
Palestine
15
Syria
16
TOTAL
66.20%
Six countries in the region had penetration levels well over 100%. By 2008 all countries in the
region (except Qatar) had at least two mobile phone operators. By year end 2008, less than 22
months after starting operations, the United Arab Emirates second mobile phone operator,
Du, registered 2,779,000 subscribers, compared to Etisalats 7,300,000 subscribers. This
strong growth in subscriber base has resulted in higher revenue for the company and has
helped to capture substantial market share from the former incumbent, Etisalat, bringing the
total number of mobile phone subscribers in the country to 10,079,000. The figure represents
a feeble growth for the operators in 2008 at 28.04% over the previous years 42.61%, ranking
8th on the growth index among Arab countries. Meanwhile, mobile phone penetration rose to
137.4%, the second highest rate in the MENA region for the year, up from the 131.64% in

2007. The United Arab Emirates mobile phone subscriber figures for the coming years are
expected to witness a sharp drop. The result of the current economic slowdown and the
higher cost of living in some emirates is bound to lead to a reduction in population growth in
the UAE, which has been one of the key drivers for increased subscriber numbers over the last
few years. Furthermore, Etisalat and Du are expected to enjoy a duopoly over fixed line,
mobile phone and Internet access services until at least 2010.
RANK
ARAB MOBILE PHONE SUBSCRIPTIONS BY COUNTRY, 2007-2008

(RANKED BY GROWTH)
MOBILE PHONE
MOBILE PHONE
GROWTH
COUNTRY
SUBSCRIPTIONS 2007
SUBSCRIPTIONS 2008
(%)
1,260,000
4,107,000
12,777,000
5,105,073
31,550,626
1,116,000
2,500,115
7,872,000
1,946,343
6,059,000
18,287,470
7,250,000
44,526,000
1,453,000
3,219,865
10,079,000
54.47%
47.53%
43.13%
42.02%
41.13%
30.20%
28.79%
28.04%
28,400,041
2,773,688
6,451,104
1,216,000
36,059,212
3,382,733
7,789,563
1,436,000
26.97%
21.96%
20.75%
18.09%
Morocco
9,860,474
1,744,600
4,772,000
20,029,000
11,437,000
2,022,163
5,438,000
22,816,000
15.99%
15.91%
13.96%
13.91%
17
Tunisia
7,842,619
8,411,630
7.26%
18
Algeria
25,500,000
27,031,474
6.01%
174,877,340
218,644,453
Qatar
Yemen
Iraq
Libya
Egypt
Bahrain
7
8
Oman
UAE
Saudi Arabia
10
Kuwait
11
Syria
12
Lebanon
13
Sudan
14
Palestine
15
Jordan
16
TOTAL
25.03%
Total mobile phone subscriptions in the MENA region numbered 218,644,453 in 2008,
marking a growth rate of 25.03%, from 174,877,340 subscriptions in 2007 which
represented a growth of 40.51% over 2006. Qatar registered the highest growth in the Arab
world (54.47%) in terms of subscription in 2008, followed by Yemen (47.53%) and Iraq
(43.13%). In terms of mobile penetration, the figures showed that Saudi Arabia had the
highest penetration of 142.87%, followed by UAE and Bahrain at 137.35% and 125.68%,
respectively.
Similar to the UAE, the launch of a new mobile phone operator in Egypt had stimulated the
market greatly, with Etisalat Misr registering 6,800,000 subscriptions by end 2008. The
countrys two existing mobile phone service providers recorded a combined growth of 32.6%
10

in their subscription figures, with Vodafone Egypts subscriber base rising by 32.09% to
17,611,000 subscribers and Mobinils subscriber base rising 33.06% to 20,115,000. Total
mobile phone subscriptions in Egypt numbered 44,526,000 by end 2008 the highest number
of mobile phone subscriptions in the Arab world in absolute figures. This figure represents a
growth rate of 41.13% from 31,550,626 subscriptions in 2007 the fifth fastest growth rate in
mobile phone subscriptions in the Arab world behind Libya and Iraq.
Iraq ranked third on the Arab mobile subscription growth index, with subscriptions growing by
43.13%, from 12,777,000 to 18,287,470. The Iraqi government had imposed a fine of over 20
million US$ on its regional telecom providers for outages and poor network quality, though
the operators have put the blame to US security services which use mobile jammers to
prevent bomb detonations. Despite a double digit growth this year, Iraqs mobile phone
penetration remains comparatively low and ahead of Egypt.
Libyas mobile phone subscriber base grew by a strong 42.02% in 2008, with its two stateowned mobile phone operators registering 2,144,927 new subscriptions for a total of
7,250,000 subscriptions by year end 2008. Strong growth in the mobile sector catapulted the
country into 5th place in the MENA region in terms of mobile phone penetration, with Libya
recording 114.05% penetration in 2007, from 43.14% in 2006. Likewise, five GCC member
countries registered penetration rates in excess of 100% in 2008: Saudi Arabia (142.87%), UAE
(137.4%) and Bahrain (125.7%) were in the first 3 spots. Fourth and fifth place in the standings
were also taken by Qatar with 125.3% penetration and Oman with 106.86% penetration.
The regions slowest growth in 2008 was recorded by Algeria, whose mobile phone
subscriptions had the lowest growth in 2008 at 6%, from the 6.86% in 2007. Compared to
the 25,500,000 subscribers of last year (2007), Algerias subscriber base increased by
1,531,474 new subscribers over the previous year. Nevertheless, the country ranked 10th in
the region in terms of mobile phone penetration, at 82.6%. Three other countries that
registered the lowest double digit growth in 2008 were Tunisia (7.26%), Morocco (13.91%)
and Jordan (13.96%). Meanwhile, Yemen registered the regions lowest mobile phone
penetration, at 26.06%, followed by Sudan (27.35%), Lebanon (34.1%), Syria (39.2%) and
Palestine (48.01%).
Several major developments took place in the mobile sector in 2007 that were carried over to
2008 and 2009. In September 2008, Bahrains Telecommunications regulatory authority
invited bids for the countrys third mobile phone operator license with the new operator
expected to launch services in 2009 to compete with existing mobile phone service providers,
Batelco and Zain. Saudi Telecommunications Company (STC) became the successful bidder for
the third mobile License in Bahrain with a bid of 86.69 million Bahraini Dinars ($230 million).
The complete commercial launch of the all-new, scalable 3.5G network for Oman Mobile was
done on March 2009 to support the bandwidth hungry services of the future. Meanwhile,
Oman Mobile also became the first company in Middle East to grant resale rights to firms
using its infrastructure. It has signed contracts with two new mobile operators Renna and
FRiENDi allowing them to resell mobile services to subscribers across Oman using their own
brands marketing and sales channels. The UAE based FRiENDi mobile, the first mobile virtual
network operator (MVNO) in the Middle East and the Omans first mobile reseller went live
on April 2009 and its rival, the fully Omani owned MVNO operator Renna on May 2009. Both
11

firms are focusing on transforming the telecommunication industry in Oman by providing
value added products and services.
Kuwait awarded the countrys third mobile phone license in November 2007 to a consortium
led by Saudi Telecom. Established in June 2008, Kuwait Telecommunications Company
(branded Viva) launched its services in December 2008. Meanwhile, Qatars Supreme Council
for Information and Communications Technology (ictQatar) set in motion the liberalization of
the countrys telecommunications sector with the award of a second mobile phone license in
December 2007 to a consortium comprising Vodafone and the Qatar Foundation. Vodafone
Qatar is expected to start commercial operations in Q1 2009. In spite of a third operator, Viva,
venturing into the Kuwait telecommunication market, the mobile penetration rate is expected
to exceed 100 percent only in 2010, which is low compared to other GCC countries, especially
the UAE which has 137% percent penetration.
In June 2007, the Saudi Council of Ministers granted a new mobile phone license to a
consortium led by Kuwaits Zain (formerly MTC-Vodafone). The company launched
commercial operations in Saudi Arabia in August 2008.
Although Iraqs three mobile phone licenses expired in December 2005, the country did not
award new ones the following year as expected, but extended existing licenses throughout
the year on a semi-annual and then quarterly basis. The country eventually awarded the three
national mobile phone licenses in August 2007 to Kuwaits Zain (Atheer), Qatars Qtel
(Asiacell) and Iraqs Korek Telecom.
Qatars Qtel was also awarded a license through its subsidiary Wataniya Telecom for
Palestines second mobile phone service provider in March 2007, which is yet to begin
operations in Palestine.
ARAB MOBILE PHONE SUBSCRIPTIONS

COUNTRY
LEVANT
GCC
NORTH AFRICA
SUDAN & YEMEN
TOTAL
BY
REGION, 2007-2008
MOBILE PHONE
SUBSCRIPTIONS 2007
MOBILE PHONE
SUBSCRIPTIONS 2008
GROWTH
(%)
58,511,330
43,921,844
58,476,692
13,967,474
174,877,340
79,499,196
56,140,153
65,509,104
17,496,000
218,644,453
35.87%
27.82%
12.03%
25.26%
25.03%
12

Mobile Phone Subscription by Region,
2007
Mobile Phone Subscription by Region, 2008
36.36%
25.12%
25.68%
33.46%
Levant
GCC
North Africa
29.96%
8%
33.44%
7.99%
Levant
Yemen & Sudan
GCC
North Africa
Sudan & Yemen

Levant countries grew by a sluggish 35.87% from the 50.21% in 2007 to register 20,987,866
new mobile phone subscriptions and bring the total base to 79,499,196 by year end 2008,
against 58,511,330 in 2007. Meanwhile, GCC countries registered 56,140,153 mobile phones
subscriptions, compared to 43,921,844 subscriptions in 2007 down to a slower 27.8% over
end 2007 figures (40.04% growth in 2007). North Africa witnessed the slowest growth in the
sector, with growth in mobile phone subscriptions at only 12.03% in 2008, way down from
26.85% in 2007. As in North Africa growth rates in Sudan and Yemen were low; 25.3% was the
combined growth rate in these two countries, a huge drop from the 78.09% growth
experienced in 2007.
Unlike 2007, which had only the Jordanian mobile market comprising of 4 mobile service
providers, 2008 consisted of two additional countries which were also considered the most
competitive in the MENA region. Competition among mobile operators is also unique in these
regions and would depend on factors like regulatory environment, demand, tariffs and
geography, coverage and promotional approaches. Saudi Arabia and Yemen have four active
operators, followed by Algeria, Iraq, Sudan, Egypt, Morocco and Kuwait, with three mobile
operators each. All other MENA countries have two active operators, barring Palestine and
Qatar, each of which only had one.
Active Mobile Phone Operators 2008
4
4
3
3
2
3
2
2
1
PALESTINE
QATAR
UAE
TUNISIA
SYRIA
OMAN
MOROCCO
LIBYA
LEBANON
KUWAIT
BAHRAIN
EGYPT
YEMEN
SAUDI
ARABIA
IRAQ
ALGERIA
SUDAN
JORDAN
13

F IXED L INE S UBSCRIPTIONS
RANK
ARAB FIXED LINE PENETRATION BY COUNTRY, 2007-2008

(RANKED BY PENETRATION)
FIXED-LINE
FIXED-LINE
COUNTRY
POPULATION
SUBSCRIPTIONS
PENETRATION
UAE
Bahrain
Syria
Qatar
Saudi Arabia
Kuwait
7
8
Egypt
Libya
Lebanon
10
Tunisia
11
Algeria
12
Morocco
13
Oman
14
Jordan
15
Palestine
16
Yemen
17
Iraq
18
Sudan
TOTAL
7,338,140
1,156,114
19,880,423
1,553,729
25,239,067
3,441,813
76,054,000
6,357,000
4,209,000
10,377,200
34,634,000
31,345,356
3,013,184
1,640,000
220,386
3,633,400
263,363
4,123,000
547,111
11,900,000
910,000
527,500
1,239,000
3,687,603
2,991,185
5,850,000
4,212,000
23,248,500
274,178
519,000
357,000
1,337,122
30,581,365
41,810,000
330,300,890
1,755,000
356,500
36,658,348
22.35%
19.06%
18.28%
16.95%
16.34%
15.90%
15.65%
14.31%
12.53%
11.94%
10.65%
9.54%
9.10%
8.87%
8.48%
5.75%
5.74%
0.85%
11%
The number of fixed-line subscriptions in the 18 MENA economies totaled 36,658,348 in 2008,
up from 32,824,645 subscriptions in 2007. Growth in the fixed line sector has become
stagnant in some economies and is growing at a slow pace. Compared to 2007s 9.7% 2008
witnessed an overall growth of 11.38% in the region. Fixed line penetration within the 18
economies stood at about 11%. The most recent growth can be seen to have taken place
among emerging markets with high population and relatively low penetration rates.
Libya had the fastest growth rate in the MENA Region, with 75.76% compared to the 2.20% of
2007. Subscription for fixed lines in this country was 910,000 in 2008, which is 392,250 more
subscribers than in the previous year. Libyas penetration rate however remains low, with
14.31%, ranking the country 8th on the penetration scale for the MENA region.
Telecommunications infrastructure development in Libya is the responsibility of the stateowned GPTC, which was set up in 1984. GPTC oversees the operation of fixed and mobile
lines, as well as Libyas Internet service providers (ISPs). GPTC has expanded landline coverage
to several parts of the country, although according to certain reports the quality of its
infrastructure and service needs significant enhancement. Improving network performance
14

and providing reliable service in both fixed and mobile telephony remains a major challenge
for Libya, especially since the sector lacks competition, is government-controlled and
managed, and marked by the absence of world class suppliers of technology and expertise.
The high growth potential in Libya and the region, however, has recently attracted Turkey's
biggest mobile-phone operator Turkcell to bid for a license to provide landline and mobilephone services in Libya.
RANK
ARAB FIXED LINE GROWTH BY COUNTRY, 2007-2008

(RANKED BY GROWTH)
FIXED-LINE
FIXED-LINE
COUNTRY
SUBSCRIPTIONS 2007
SUBSCRIPTIONS 2008
GROWTH
Libya
Yemen
Iraq
Morocco
Algeria
UAE
7
8
Egypt
Qatar
Bahrain
10
Kuwait
11
Syria
12
Sudan
13
Saudi Arabia
14
Oman
15
75.76%
30.84%
25.36%
24.96%
20.18%
19.62%
9.17%
8.83%
517,750
1,021,988
1,400,000
2,393,767
3,068,409
910,000
1,337,122
1,755,000
2,991,185
3,687,603
1,371,000
10,900,000
1,640,000
11,900,000
242,000
203,500
517,300
3,450,000
263,363
220,386
547,111
3,633,400
Palestine
345,200
4,000,000
268,065
350,442
356,500
4,123,000
274,178
357,000
16
Tunisia
1,273,000
1,239,000
3.08%
2.28%
1.87%
-2.67%
17
Jordan
559,000
519,000
-7.16%
18
Lebanon
TOTAL
693,000
32,574,421
527,500
36,281,348
-23.88%
11.38%
8.30%
5.76%
5.32%
3.27%
Yemen also demonstrated strong growth in 2008. It stood second on the Arab regions fixedline growth rate index, at 30.84% compared to the 5.54% of 2007. According to some industry
analysis reports, this growth is expected to be mainly through the PTC's (Public
Telecommunications Corporation) efforts to provide fixed line services in most rural areas of
Yemen. The government of Yemen fully owns and directly oversees the operations of the
monopoly fixed line operator, Public Telecommunications Corporation (PTC), and owns a
controlling stake in the CDMA cellular operator, Yemen Mobile, through the PTC. However,
Yemen had the lowest fixed line penetration rate compared to other Arab countries.
Moroccos fixed telephony market achieved an annual increase of 25% in subscribers, with a
total of 2.991 million lines in service as of December 31, 2008 (including services with
restricted mobility, the majority of which are provided by Wana). In January 2007, the
15

countrys regulatory authority awarded Wana (formerly Maroc Connect) Moroccos third fixed
line license. Whereas fixed line subscriptions witnessed negative growth in 2006, with the
number of subscriptions falling 5.60% to 1,266,119 subscriptions, the sector witnessed a
dramatic reversal in 2007 and 2008, with fixed line subscriptions growing at 89.06% to register
2,393,767 subscriptions (the highest fixed line growth in 2007) and 24.96% growth with
2991,185 subscriptions in 2008. Moroccos fixed line market represents the fourth fastest
growth in the MENA region for 2008. Fixed line penetration in the country rose to 9.54% from
the 7.63% in 2007, ranking the country in 12th place, up from 15th in 2007.
The liberalization of Algerias fixed line market has helped to spur growth in the sector, with
fixed line subscriptions rising by 12.18% in 2008 to yield 20.18% from the 8% in 2007.
However, Algerie Telecom, the incumbent provider continued to dominate the sector,
accounting for 3,687,603 fixed line (wireless local loop subscribers of about 697,603)
subscriptions in 2008. The Consortium Algrien de Tlcommunications (brand name Lacom),
a joint venture between Telecom Egypt and Orascom Telecom that was licensed as Algerias
first private-sector fixed-line operator in 2005, entered the market in 2006 providing WLL
(wireless local loop)1 connections exclusively. By end 2007, the company recorded only 44,916
subscriptions, or 1.46% of total fixed line subscriptions in Algeria. Coupled by poor
technology, administrative challenges and lack of strategy, low subscriptions lead to the
virtual collapse of Lacom in 2008. The company could not meet the commitments regarding
national coverage contained in its operating framework. Short on cash, the company laid off
staff and closed a number of boutiques, leaving only a single store open in the capital. Lacom
blamed favoritism on ARPTs part for the benefit of state-run Algerie Telecom as a prime
reason for their collapse.
Meanwhile, in the United Arab Emirates duopoly between the two fixed line service
providers, Emirates Integrated Telecommunications Company (brand name Du) and Emirates
Telecommunications Corporation (Etisalat) continues as they vied for market share in the
country, with Etisalat maintaining its market dominance in 2008. The countrys fixed-line
subscribers numbered 1,640,000 in 2008, rising 19.62% over 2007. Total fixed line subscribers
also include Dus 280,000 residential and business subscribers in several free zone areas and
freehold residential complexes in Dubai. Together, the two companies subscription base
contributed to the United Arab Emirates 22.35% fixed line penetration, the highest
penetration rate in 2008 among MENA economies.
Three countries in the MENA region recorded negative growth in fixed line subscriptions,
namely Tunisia, Jordan and Lebanon. Fixed line subscriptions in Tunisia fell by a significant (2.7%), from 1,273,000 to 1,239,000 subscriptions in 2008. The fixed-line telephony monopoly
in Tunisia, plus relatively high prices by the provider, are slowing penetration in households.
National fixed-line rates range from 14 to 20 millimes (thousandths of a dinar) per minute,
depending on the time of day. Jordan recorded the second highest negative growth in the
Arab region in fixed line subscriptions; -7.71%, with subscriptions dropping from 559,000 in
2007 to 519,000 in 2008. Consequently, fixed line penetration in Jordan dropped from 9.77%
to 8.87% in 2008, earning the 14th spot on the Arab fixed line penetration scale. Lebanon on
1
Wireless local loop (WLL) is a system that connects subscribers to the local telephone station wirelessly rather than through copper wires. It
is used as the "last mile / first mile" connection for delivering plain old telephone service (POTS) and/or broadband Internet to
telecommunications customers.
16

the other hand recorded the lowest growth rate (or the highest negative growth) on the scale
for fixed lines with -23.88% compared to the 3.43% growth in 2007. With 527,500 subscribers
in 2008 (fewer by 165,500 from 2007) the penetration rate dropped from the 14.74% to
12.53% in 2008 ranking Lebanon ninth on the penetration scale.
Sudan recorded the lowest penetration rate in the Arab region for fixed line subscriptions,
registering 0.85% from 345,200 subscriptions in 2007 to 356,500 in 2008. Growth rates in
Sudan remain relatively low as well with 3.27% in 2008. According to certain online reports,
there are no major technical or financing challenges to telecommunications infrastructure
development. However, the penetration rate remains low due to limited demand. Demand
for services other than telephones is also constrained by the regions disposable income and
work practices. Yemen and Iraq fall next in line in terms of economies having the lowest fixedline penetration rates at 5.75% and 5.74%, respectively. Iraqs 25.36% growth is among the
top five fastest growth rates in the Arab world Iraqs fixed line subscriptions by end 2008
rose to 1,755,000, up from 1,400,000 to yield 5.47% which was not met well when scaled with
other economies in the Arab world .
Omans fixed line subscriptions have increased relatively well since its negative 0.61% in 2007,
from 269,700 in 2006 to 268,065 subscriptions in 2007. In 2008 fixed line growth surged to
2.28% (274,178 subscribers), with Omantel remaining the sole provider of fixed line services;
local, long distance and international calling, public pay phones, in addition to the Internet. By
end 2008, the number of active public payphones in Oman decreased to 6,703 as compared
with 6,858 by end of 2007 (-2.26%). The reasons mentioned by Omantel for the reduction in
payphones are: removal request from building owners, building maintenance and low
revenue from these payphones. Fixed line penetration rate in Oman in 2008 remained
practically unchanged; 9.10%. Post-paid fixed line subscribers registered positive growth
(12.42%) compared to prepaid subscribers, with 47,306 prepaid and 220,169 postpaid
subscribers registered in the country in 2008.
Kuwait, which has the least liberalized fixed line market in the GCC, on the other hand, grew
by 5.8% to reach 547,111 subscribers. This marginally lifted a low penetration rate of 15.21%
registered in 2007 to 15.90% in 2008. This remained below a 16.15% rate in 2006. Fixed lines
and international gateway services are provided solely by the Ministry of Communications in
Kuwait.
Ranking second in the Arab world in fixed line penetration, Bahrain recorded a rate of 19.06%
in 2008, slightly lower than 19.44%, in 2007 though subscriptions increased from 203,500 in
2007 to 220,386 in 2008. The growth of wireless fixed lines (Wireless Local Loop) in the
country has led to the growth rate of 8.30% in 2008. The marginal decrease in fixed line
penetration in 2008 may be attributed to the countrys increasing population. The licensing of
two new service providers back in 2005 to operate alongside incumbent Batelco in the fixed
line sector has played a strong role in promoting growth of fixed line subscriptions in the
country.
Syria, meanwhile, ranked third in the Arab world in fixed line penetration in 2008, which
stood at 18.28%. The Syrian Telecommunications Establishment, a state-owned body holding
a monopoly over Syria's landline network has started expanding into rural areas as a part of
17

its fully fledged 2010 reform strategy. Syria ranked 12th on the growth scale among MENA
regions, with 3,633,400 subscribers registered in 2008 representing a growth of 5.32%.
Saudi Arabia, which liberalized its fixed line sector in 2007 with the award of as many as three
new fixed line licenses in June, signaled the end of incumbent Saudi Telecoms long-standing
monopoly over the sector. Saudi Arabia stands 4th in the MENA region with 16.34%
penetration in 2008 compared to 15.69% in 2007. However, Saudi Arabias 3.08% growth rate
ranked it 13th among Arab countries.
ARAB FIXED LINE SUBSCRIPTIONS
COUNTRY/REGION
BY
REGION, 2007-2008
FIXED LINE SUBSCRIPTIONS

2007
FIXED LINE SUBSCRIPTION

2008
GROWTH
(%)
17,352,442
6,601,865
7,252,926
1,367,188
32,574,421
18,691,900
7,068,038
8,827,788
1,693,622
36,281,348
7.72%
7.06%
21.71%
23.88%
11.38%
LEVANT
GCC
NORTH AFRICA
SUDAN & YEMEN
TOTAL
FixeLine Subscription by Region, 2007
FixedLine Subscription by Region, 2008

51.52%
53.27%
20.27%
4.20%
19.48%
4.67%
24.33%
22.27%
Levant
GCC
North Africa
Sudan & Yemen
Levant
GCC
North Africa
Sudan & Yemen

Gulf Cooperation Council countries accounted for 7,068,038 subscriptions in 2008, growing at
a rate of 7.06%. The regions growth rate in 2007 was a lower 2.46%, indicating that growth
remains unchanged and the fixed-line sector is not stagnating with in some of the GCC regions
and may also witness a steady growth in the coming years. Fixed line subscriptions in the
Levant grew by 7.72% to 18,691,900 subscriptions indicating the fixed line market is nearing
saturation among this region with growth slowing down consistently year after year, while
North Africas 2008 fixed line subscriptions dropped by 1.6% to yield 21.71% compared to
23.31% growth in 2007. The highest growth in this sector was attained by the emerging
markets of Sudan and Yemen at 23.88%.
18

M O B I L E - T O -F I X E D L I N E S U B S C R I B E R S
According to recent industry reports, fixed line
subscribers and revenues worldwide have been
falling, partly due to increased mobile
substitution. The need for stationary landlines for
voice has been replaced by roamable, reachable
and convenient mobile phones. This notion mixed
with the general concurrent stagnation of fixed
line markets in the Arab world has contributed to
a phenomenal rise in mobile phone subscriptions
across the Arab world and to a higher mobile-tofixed-line ratio in all MENA countries. Fixed line
subscribers growth in the MENA region was only
11.38% compared to 25.03% mobile growth in
2008, resulting in a ratio of 6.03 (i.e. 6.03 mobile
phone subscriptions for every fixed line
subscription), rising from 5.23 in 2007.
MOBILE-TO-FIXED LINE
SUBSCRIBERS, 2007-2008
(RANKED BY RATIO)
RANK COUNTRY
2008
2007
Keeping its 2007 record, Sudan had the highest

ratio in 2008, at 32.08 mobile phone subscriptions
for every fixed line subscription. Sudan can be
seen as a vastly underexploited country in terms
of fixed line, mobile and Internet use, with much
potential for growth.
Oman ranked second this year with an 11.74 ratio,
while Jordan ranked third with 10.48. Comparing
the growth rates of both these countries in fixed
line and mobile phone subscriptions shows that
mobile growth supersedes fixed line growth.
Sudan
32.08
16.99
Oman
11.74
8.98
Jordan
10.48
9.86
Iraq
10.42
5.36
Saudi Arabia
8.75
8.54
6
7
8
Libya
Morocco
Qatar
7.97
7.63
7.39
7.10
5.21
5.48
Algeria
7.33
8.37
10
Tunisia
6.79
5.68
11
Bahrain
6.59
9.13
12
Kuwait
6.18
4.98
13
UAE
6.15
6.16
14
Palestine
5.66
4.02
15
Yemen
4.53
2.62
16
Egypt
3.74
9.33
17
Lebanon
2.72
1.75
18
Syria
2.14
1.87
6.03
5.23
TOTAL
Mobile-to-Fixed line susbscribers, 2008

50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
Lebanon
Bahrain
Qatar
Palestine
Oman
Kuwait
Jordan
Yemen
Libya
Syria
Tunisia
UAE
Sudan
Iraq
Morocco
Algeria
Saudi Arabia
Egypt
Mobile
FixedLin es
19

A 9.66 mobile-to-fixed line subscriptions ratio in Libya, which ranked it second in the Arab
world in 2007, dropped to 7.97 in 2008. GPTC (General Posts and Telecommunications
Company) has expanded landline coverage to many parts of Libya, suggesting higher fixed line
growth rates over mobile phones. Saudi Arabia had a higher ratio of 8.75 compared to 7.10 in
2007 indicating a far healthier growth in mobile phones over fixed lines.
Egypt also made strong gains in the mobile phone to fixed line ratio, raising the ratio from
2.62 in 2007 to 3.74 mobile phones for every fixed line subscription in the country. The gap
between the two indicators widened significantly in Qatar, with the countrys mobile phone
to fixed line ratio rising from 5.21 in 2007 to 7.39 in 2008. Meanwhile, the lowest mobile
phone to fixed line ratio was recorded in Syria and Lebanon, which respectively have 2.14 and
2.72 mobile phones for every fixed line subscription. Both ratios, however, represented an
increase over 2007 ratios. The average across the 18 Arab countries surveyed for the study
was 5.23 mobile phones for every fixed-line subscription, rising from 4.06 in 2006.
INTERNET USERS
The total number of Internet users in the 18
Arab economies under study is rising quickly.
Annual growth rate are of the order of 20%
and sometimes as high as 30%. Internet users
from the 18 Arab countries in 2008 was
52,698,411, rising at a rate of 33.76% over
the 2007 figure of 39,408,690. The most
recent and highest growth rates are taking
place in emerging markets with high
population and relatively low penetration
rates.
Internet user growth is being driven by steady
progress shown in traditionally lowpenetrated countries, such as Iraq, Egypt and
Syria, there is also considerable gap between
countries with UAE at the high end and
Yemen at the low end. Considering the
compounded annual growth rate (CAGR) of
61.8% for the past 4 years, Iraq registered the
strongest growth in Internet users in 2008, at
55% for a total of 3,084,500 users. Egypt
ranked second in terms of growth, with
Internet users rising by a 45.82% to register
12,570,000 by end 2008. In third place in the
MENA region in terms of growth, Syria
recorded 43% growth in Internet users from
2,400,000 in 2007 to 3,432,000.
RANK
INTERNET GROWTH FOR ARAB

COUNTRIES 2008
INTERNET
COUNTRY
GROWTH (%)
USERS
Iraq
Egypt
Syria
Sudan
Qatar
Yemen
7
8
Oman
Bahrain
UAE
10
Jordan
11
Algeria
12
14
Lebanon
Saudi
Arabia
Kuwait
15
Tunisia
16
Libya
17
Morocco
18
Palestine
TOTAL
13
3,084,500
12,570,000
3,432,000
3,479,000
592,200
55.00%
45.82%
43.00%
42.00%
41.00%
1,570,800
540,150
435,600
3,353,600
40.00%
38.50%
32.00%
31.00%
1,441,000
3,965,000
1,196,800
31.00%
30.00%
28.00%
7,936,000
1,272,433
24.00%
21.18%
2,066,628
966,000
20.00%
20.00%
4,200,000
596,700
52,698,411
20.00%
8.00%
33.76%
20

The bottom five countries in the region in terms of growth were Kuwait (14), Tunisia (15th
place), Libya (16), Morocco (17), and
INTERNET PENETRATION FOR ARAB
Palestine (18). The latter had registered
COUNTRIES 2008
modest single digit growth of 8% in 2008, its
INTERNET
Internet users rising from 552,500 in 2007 to
RANK COUNTRY
PENETRATION
USERS
596,700 in 2008. The remaining countries all
registered double digit growth, albeit modest
in most cases when compared to last year. In
total, ten countries grew at a rate lower than
the Arab average of 31.69%, including the
United Arab Emirates, Jordan, Saudi Arabia,
Algeria and Lebanon, as well as the five
countries at the bottom of the index. A
significant reason considered by industry
analyst for the stagnant growth of Internet
users in with some parts of the Arab regions
have been the lack of sufficient websites in
Arabic languages and the problems
associated with displaying Arabic language
scripts with certain international web
software. Lack of available content in regional
languages prevents the Internet from being a
part of everyday life hindering growth and
penetration rates.
UAE
3,353,600
45.70%
Qatar
592,200
38.11%
Bahrain
435,600
37.68%
1,272,433
36.97%
7,936,000
31.44%
6
7
8
Kuwait
Saudi
Arabia
Lebanon
Jordan
Tunisia
1,196,800
1,441,000
2,066,628
28.43%
24.63%
19.92%
Oman
540,150
17.93%
10
Syria
3,432,000
17.26%
11
Egypt
12,570,000
16.53%
12
Libya
966,000
15.20%
13
Palestine
596,700
14.17%
14
Morocco
4,200,000
13.40%
15
Algeria
3,965,000
11.45%
16
Iraq
3,084,500
10.09%
17
Sudan
3,479,000
8.32%
18
Yemen
1,570,800
6.76%
Average Internet penetration for the 18

MENA economies this year was higher from
the previous 12.16% at 15.95%. As in past
years, the UAE topped the index with deeper
penetration of 45.7% than the 37.79% of
2007, followed by Qatar in second place with
52,698,411
TOTAL
15.95
Internet Users Penetration , 2008

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Yemen
Sudan
Iraq
Algeria
Morocco
Palestine
Libya
Egypt
Syria
Oman
Tunisia
Jordan
Lebanon
Saudi Arabia
Kuwait
Bahrain
Qatar
UAE
21

38.11% penetration. Hot on the heels of Qatar is Bahrain, which recorded 37.68% Internet
penetration in 2008, followed by Kuwait with 36.97%. Saudi Arabia rounded off the top five,
with Internet penetration at 31.44%.
At the other end of the scale, Yemen registered 6.76% Internet penetration, the lowest in the
Arab world, ranking the country in 18th place on the indicator. Faring slightly better, Sudans
penetration rate of 8.32% ranked it in 17th place among the MENA economies. Sudan and
Yemen were the only two countries on the index to register a single digit growth in 2008.
While Iraq ranked in 16th place with 10.09% penetration and Algeria ranking itself in 15th
place. Morocco crossed its 10% mark of 2006, registering an Internet penetration rate of
11.15% in 2007, and 13.40% in 2008 to rank in 14th place.
There was not much of a difference in regional growth levels in 2008 from 2007, with Internet
users in the Gulf Cooperation Council countries rising by 26.73% (14,129,983 users), to 23.36%
growth in North Africa (11,197,628 users). Levant registered stronger growth, at 43.11% in
2008, to bring the number of Internet users up to 22,321,000. However, the year-on-year
growth rates for each region represented a dramatic increase. Overall, Internet users in the
MENA region grew by 33.76% in 2008.
INTERNET USERS
BY
REGION, 2007-2008
COUNTRY
INTERNET USERS 2007
INTERNET USERS 2008
LEVANT
YEMEN & SUDAN
GCC
NORTH AFRICA
TOTAL
15,597,500
3,572,000
11,150,000
9,077,190
39,408,690
22,321,000
5,049,800
14,129,983
11,197,628
52,698,411
GROWTH
(%)
43.11%
41.37%
26.73%
23.36%
33.76%
22

COMPUTER INSTALLED BASE
COUNTRIES 2008
FOR
ARAB

COUNTRIES 2008
FOR
ARAB
RANK
COUNTRY
COMPUTER
INSTALLED BASE
GROWTH (%)
RANK
COUNTRY
COMPUTER
INSTALLED BASE
PENETRATION
Iraq
1,337,050
43.00%
Bahrain
407,100
35.21%
Qatar
498,080
41.50%
UAE
2,475,451
33.73%
Libya
729,675
41.00%
Qatar
498,080
32.06%
UAE
2,475,451
39.00%
1,021,614
29.68%
Bahrain
407,100
38.00%
4,755,392
18.84%
Kuwait
1,021,614
2,000,700
38.00%
35.00%
674,360
16.02%
4,755,392
34.00%
7
8
Jordan
Oman
814,660
416,000
13.93%
13.81%
Algeria
Saudi
Arabia
Yemen
Kuwait
Saudi
Arabia
Lebanon
592,551
32.03%
Libya
729,675
11.48%
10
Oman
416,000
30.00%
10
Tunisia
902,521
8.70%
11
Syria
1,430,000
30.00%
11
Syria
1,430,000
7.19%
12
Egypt
4,295,590
30.00%
12
Morocco
1,904,000
6.07%
13
Sudan
1,292,562
19.68%
13
Algeria
2,000,700
5.78%
14
Tunisia
902,521
17.59%
14
Egypt
4,295,590
5.65%
15
Lebanon
674,360
15.00%
15
Palestine
210,993
5.01%
16
Jordan
814,660
15.00%
16
Iraq
1,337,050
4.37%
17
Morocco
Sudan
1,292,562
3.09%
Palestine
12.00%
5.55%
17
18
1,904,000
210,993
18
Yemen
592,551
2.55%
TOTAL
25,758,299
29.65%
TOTAL
25,758,299
7.8%
The computer installed base in MENA economies rose to 29.65% from the 20.88% in 2007 to
reach 25,758,299 from 19,866,800 the year before. Growth in the number of installed
computers achieved to reach heights beyond those of 2007, with 12 countries recording 30%
or more growth on the indicator in 2008. Iraq ranked first in the Arab world in terms of
growth, its computer installed base rising 43% to 1,337,050, followed by Qatar, recorded
41.5% growth in its computer installed base to reach 498,050 computers from 352,000
previously. Libya ranked third with 41% growth followed by UAE (39%) and Bahrain (38%).
Meanwhile Palestine and Morocco recorded the lowest growth rates in the MENA region with
Palestine projecting a single digit growth of 5.5% with 210,993 installed computers in 2008.
Morocco is preceded by Jordan with 814,660 computers and ranking 16th on the index,
registering 15% growth. Tunisia and Lebanon rounded up the bottom five countries, ranking in
14th and 15th place respectively.
Bahrain led the region in terms of computer penetration in 2008, with 35.21% (407,100
computers). However the previous title holder UAE is hot on heels of Bahrain with 33.73%
computer penetration. Qatar ranked third this time pushing Kuwait fourth with 32.06%
23

penetration, while Kuwait only 29.68%. In fifth place, Saudi Arabia fell below the 20% mark,
registering only 18.84% penetration in 2008. Nine countries from the MENA region recorded a
penetration rate below 10%, including Tunisia (8.70%), Syria (7.19%), Morocco (6.07%),
Algeria (5.78%), Egypt (5.65%), Palestine (5.01%), Iraq (4.37%), Sudan (3.09%) and Yemen
(2.55%). The latter is the least penetrated country in the region in terms of computer installed
base
BY
REGION, 2007-2008
COUNTRY
PC INSTALLED BASE 2008
PC INSTALLED BASE 2007
GROWTH (%)
GCC
9,573,637
8,762,653
5,536,896
1,885,113
25,758,299
7,037,000
6,834,000
4,467,000
1,528,800
19,866,800
36.05%
28.22%
23.95%
23.31%
29.65%
LEVANT
NORTH AFRICA
YEMEN & SUDAN
TOTAL
The Gulf Cooperation Councils computer installed base grew by 36.05%, the fastest growing
region in the Arab world in 2008, followed by Levant countries. The latter recorded 28.22%
growth in its computer installed base (8,762,653), while the North Africa, Yemen and Sudan
recorded fractionally slower growth at 23.95% and 23.31%.
24

I N T E R N E T U S E R T O PC R A T I O
INTERNET USER-TO-PC RATIO, 2008
COUNTRY
RATIO
EGYPT
PALESTINE
SUDAN
YEMEN
2.93
SYRIA
IRAQ
2.4
2.31
TUNISIA
MOROCCO
ALGERIA
JORDAN
2.29
LEBANON
SAUDI ARABIA
UAE
1.77
LIBYA
1.32
OMAN
KUWAIT
QATAR
1.3
1.25
BAHRAIN
1.07
2.83
2.69
2.65
2.21
1.98
1.77
1.67
1.35
1.19
As shown in above table, oil-rich countries like the GCC states as well as Libya performed
better than the others in terms of Internet user-to-PC ratio. For example, there are about 1.07
Internet users per PC in Bahrain compared to about 2.93 Internet users per PC in Egypt.
This data further underscores the widespread use of computers provided by PIACs (public
Internet access centers), libraries and education centers for Internet access in non oil
dependent economies such as Yemen, Sudan, Palestine and Egypt.
It should also be noted that the Egyptian Ministry of Information and Communication
Technology (MICT) has initiated several projects in the past including the "Free Internet" and
the "PC for Every Home." However, based on this data, it appears that these initiatives still fall
short of bringing Egypts Internet user-to-PC ratio on par with those found among the richer
Arab countries.
25

INDEPENDENT REGULATORY AUTHORITIES AND LIBERALIZATION
INDEPENDENT REGULATORY AUTHORITY & COMPETITION
COUNTRY
REGULATOR
INDEPENDENT
REGULATORY
AUTHORITY
FIXED LINE
SECTOR
MOBILE
PHONE
SECTOR
INTERNET
SERVICE
PROVISION
BAHRAIN
Autorit de rgulation de la
poste et des
tlcommunications (ARPT)
Telecommunications Regulatory
Authority (TRA)
EGYPT
National Telecommunication
Regulatory Authority (NTRA)
IRAQ
Ministry of Communications
JORDAN
Commission (TRC)
KUWAIT
Ministry of Communications
LEBANON
Authority
Libyan Post
Telecommunications and
Information Technology
Company
Agence Nationale de
Rglementation des
Tlcommunications (ANRT)
OMAN
Authority (TRA) of Oman
PALESTINE
Ministry of Telecom &

ALGERIA
LIBYA
MOROCCO
QATAR
SAUDI
ARABIA
SUDAN
SYRIA
TUNISIA
UAE
YEMEN
Supreme Council for

Information and
Communications Technology
(ictQATAR)
Communication and
Commission
National Telecommunications
Corporation (NTC)
Syrian Telecommunication
Establishment (STE)
Ministry of Communication
Technologies
Authority (TRA)
Ministry of Telecommunication
& Information Technology
26

Independent regulatory authorities are national bodies established to oversee and decide
upon many or all aspects of telecommunications policy in markets that are already
competitive or being prepared for liberalization. They set strategic priorities and create the
regulations needed to implement them, whether the subject is managing numbers and radio
frequencies, licensing new or incumbent (including state-owned) operators, or deciding on
the minimum service, capacity and coverage required of them. They may also set or cap prices
or throw them open to competition. At the end of 2008, 13 of the 18 MENA economies
surveyed for this study possessed independent regulatory bodies. Despite its establishment in
July 2002, Lebanons Telecommunications Regulatory Authority began its operations in
February 2007, following a protracted process to elect a board of commissioners and appoint
a chairman.
Regulatory functions in the five countries that lack an independent telecommunications
regulatory authority are carried out by telecommunication ministries and government-owned
incumbent providers. In Yemen and Palestine, the Ministry of Telecommunications and
Information Technology holds sway over the sector, as does the Ministry of Communication in
Kuwait, while in Libya and Syria, the General Post and Telecommunications Company and the
Syrian Telecommunications Establishment govern their respective telecommunications sector,
respectively.
There are strong indications that Kuwait, currently the only Gulf Cooperation Council state
without an independent regulatory authority, will move to establish one before long, given
the fact that the government retains a minority interest in all three of the countrys mobile
phone operators (including newly licensed Kuwait Telecommunications Company) and is the
sole fixed line provider in the in the country through the Ministry of Communications.
All 18 Arab countries have liberalized their Internet services provision sector, one of the first
sectors in most countries to be liberalized. Meanwhile, only Palestine and Qatar remained
monopolies in the mobile phone sector in 2008. However, both awarded second mobile
phone licenses in 2007 and 2008, respectively, with the news operators expected to enter the
market in early 2009, thus bringing to a close exclusivity in the mobile phone sector in the
MENA region.
The fixed line sector remains a monopoly in many Arab countries, with fixed line services
usually provided by state-owned incumbent operators. However, seven countries have
introduced competition into their fixed line sectors, with new fixed line providers providing
services either through wireless fixed line technologies or by purchasing wholesale services
through the incumbent providers existing network.
27

COUNTRY ICT PROFILES:
GULF CORPORATION COUNCIL COUNTRIES
ICT PENETRATION
RANK
COUNTRY
1
2
3
UAE
Bahrain
Qatar
Saudi
Arabia
Kuwait
4
5
6
Oman
TOTAL
FIXED LINE
IN
GCC 2008
PENETRATION
MOBILE PHONE
PENETRATION
22.35%
19.06%
16.95%
PENETRATION
COMPUTER
PENETRATION
ICT USE
INDEX
137.35%
125.68%
125.27%
45.70%
37.68%
38.11%
33.73%
35.21%
32.06%
2.39
2.18
2.12
16.34%
15.90%
142.87%
98.28%
31.44%
36.97%
18.84%
29.68%
2.09
9.10%
106.86%
17.93%
13.81%
1.48
2.08
16.93%
134.49%
INTERNET
33.83%
22.94%
1.81
Similar to last year five of the six Gulf Cooperation Council states once again led the MENA
region in the 2008 ICT Use Index, with the UAE taking the top spot on two indicators and the
remaining two were held by Saudi Arabia and Bahrain. The UAE took a commanding lead,
scoring 2.39 on the index, followed by Bahrain (2.18), Qatar (2.12), Saudi Arabia (2.09) and
Kuwait (1.81). With a score of 1.48, Oman placed 6th in the GCC, and 7th in the Arab world
overall. All six countries scored above the 1.00 mark on the ICT Use Index, with the average
score for the region at 2.08 from the 1.70 in 2007. To reiterate, growth is difficult to calculate
for the region and other countries in the Arab world in 2007, given the fact that a number of
indicators for 2006 and 2007 were corrected or adjusted by the service providers, in addition
to major corrections in population figures made by some of the Gulf Cooperation Council
countries in particular.
The Gulf Cooperation Council recorded an average of 134.49% in 2008 an increase of 22.5%
from the 109.78% mobile phone penetration in 2007, with Internet penetration a far second
at 33.83%. Overall computer penetration registered 22.94%, with the lowest penetration
witnessed in the region still recorded in fixed line penetration at 16.93% which was almost
same as the 2007 penetration rate of 16.54%.
28

BAHRAIN:
COUNTRY ICT PROFILE BAHRAIN
INDICATOR
2004
2005
2006
2007
2008
Fixed Line Subscriptions

Mobile Phone
Subscriptions
Batelco
Zain (MTC
Vodafone)
Internet Users
Computer Installed Base
191,553
193,520
194,196
203,500
220,386
649,764
767,103
907,433
1,116,000
1,453,000
544,696
565,103
674,433
668,000
767,000
105,068
202,000
233,000
448,000
686,000
202,500
145,000
228,000
175,000
268,000
225,000
330,000
295,000
435,600
407,100
Bahrain Mobile Operator Market Share , 2007
59.86%
Bahrain Mobile Operator Market Share , 2008
52.79%
47.21%
40.14%
Batelco
Zain
Batelco
Zain
As of December 2007 TRA has issued 152 licenses to 68 companies. Out of these 68
companies, 16 operators currently provide telecommunications services in Bahrain. Bahrain
ranked second overall on the 2008 Arab ICT Use Index, it has also ranked second among GCC
economies and third for mobile phone penetration among MENA economies, behind United
Arab Emirates and Saudi Arabia. The number of mobile phone subscribers has increased quite
steadily since its inception in 2002. Mobile phone subscriptions outnumber fixed lines, at 6.59
mobile subscriptions for every fixed line.
The countrys two dominant mobile operators, Batelco (Bahrain Telecommunications
Company) and Zain (formerly MTC-Vodafone, rebranded in September 2007) saw their total
subscribers reach over 1.4 million in 2008, up 30% from 1.11 million subscribers in 2007. The
countrys mobile phone sector grew at a compound annual growth rate (CAGR) of 22.3% over
the period 2004 to 2008. The countrys former telecom monopoly, Batelco, continues to
dominate the market with some 767,000 subscribers in 2008. However, its market share
showed a decline of 7% in 2008, falling from 59.86% to 52.79%, with Zains share rising to
47.21% from 40.14%. The latters subscriber base grew at a phenomenal rate of 53.1% over
end 2008. In December 2008 mobile penetration in Bahrain was calculated to be 125.68%,
29

which could be seen as one of the highest among the GCC countries. Prepaid mobile phone
subscribers represent 84% of the subscribers at the end of 2008, with 1,220,163 prepaid
subscribers and 232,619 postpaid subscribers.
1,400,000
1,220,163
1,200,000
923,702
1,000,000
800,000
756,268
635,277
600,000
400,000
200,000
131,826
151,165
192,277
232,619
0
2005
2006
Prepaid
2007
2008
Postpaid
In a move designed to stimulate competition in the kingdom, the countrys

Telecommunications Regulatory Authority (TRA) had invited bids for Bahrains third mobile
phone license in September 2008. Six companies had expressed their interest in competing
for the license. Among the interested bidders on May 2009 TRA selected the Saudi Telecom
Company with a bid capital of Bahraini Dinars 86.69 million (230 million US$), and handed
over its 3rd mobile license to STC, in a step that symbolizes the official closure of the 3rd
mobile operators license auction process. STC soon established STC Bahrain B.S.C (c) to be
the licensed operator for Bahrain.
The countrys regulator is also currently working on a regulatory framework for mobile and
fixed line number portability. Number portability is set to be introduced during Q1, 2009. The
regulator is also seeking services from consultancy firms to design, build and operate a
Broadband quality of service testing platform in order to continuously measure the
broadband services of all Internet licensed providers in Bahrain. These performance
measurements would assist TRA in validating whether the broadband qualities of service
(QoS) data provided by Internet providers are based on international best practices. TRA in
Bahrain is also planning to address the issue of overly high tariffs for mobile roaming within
the Arab Region.
Bahrain perhaps was the first country in the region to liberalize all aspects of telecoms.
Bahrains fixed line sector was liberalized in 2005, when two new service providers were
granted fixed line licenses, to operate alongside Batelco, the incumbent operator. The
countrys fixed line market grew 4.79% in 2007, to register 203,500 subscribers, from 194,196
at end 2006. By the end of 2008, there were 220,386 fixed lines compared to 203,500 in 2007,
indicating fixed line growth of 8.3% due to growth of fixed wireless. Fixed telephony lines
consist of 206,301 PSTN and 14,085 Wireless (only 1,072 in 2007). The resulting penetration
30

rate for fixed lines is 19.06%, the second highest rate in the GCC, behind the United Arab
Emirates.
In 2008, Bahrain recorded a 32% rise in Internet users, registering 435,600 users over 2007s
330,000. According to the TRA, from the 114,502 Internet subscribers there were 109,994
broad band Internet subscribers and about 4,508 dial up subscribers. There were 101,961
residential broadband Internet subscribers in Bahrain by end of 2008, and 8,033 business
subscribers. Broadband subscribers accounted for 96%, with the remainder representing
dialup subscribers. These are serviced by 10 Internet service providers, namely, Batelco,
Mena, 2Connect, Etisalcom, Kalaam, Lightspeed, Northstar, Zain, Nuetel and Orbit. The ten
offer four types of Internet services: dialup, wired broadband, wireless broadband and mobile
broadband. Notably, there are 22 licensed Internet service providers in the kingdom, but
many of the licenses acquired (including those for fixed line services, international
telecommunication services and others) remain inactive.
Bahrains computer installed base, meanwhile, grew by 38%, to register 407,100 computers in
2008, up from 295,000 in 2007. This has resulted in a healthy computer penetration rate of
35%.
KUWAIT
COUNTRY ICT PROFILE KUWAIT
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Zain-Kuwait
Wataniya
Viva
Internet Users
496,973
504,806
517,000
517,300
547,111
2,109,700
2,277,000
2,529,679
2,773,688
3,382,733
1,262,423
847,277
_
590,000
1,331,189
945,811
_
715,000
1,461,000
1,068,679
_
870,000
1,576,000
1,197,688
_
1,050,000
1,769,000
1,313,733
300,000
1,272,433
450,000
510,000
600,000
740,300
1,021,614
Kuwait Mobile Operator Market Share , 2007
Kuwait Mobile Operator Market Share , 2008
52.29%
56.82%
38.84%
43.18%
8.87%
Zain
Wataniya
Zain
Wataniya
Viva
31

Possessing one of the oldest mobile markets in the Arab world, Kuwaits current subscriber
growth of 21.96% compared to the low 9.65% growth of last year could be attributed to the
introduction of a third GSM mobile network in Kuwait, Viva. With 1,769,000 and 1,313,733
subscribers respectively, the countrys two mobile operators, Zain (rebranded from MTC
Group in September 2007) and Wataniya Telecom, ended 2008 with market shares (52.29%
and 38.84%) much lower than those in their prevailing years of December 2007 (56.82% and
43.18%), 2006 (57.75% and 42.25%) and 2005 (60.27% and 39.74%). As mentioned previously
the decline in the market shares of the countrys two dominant mobile operators maybe
attributed to the newly branded GSM mobile operator, which has the lost 8.87% (300,000
subscribers) market share. The mobile phone subscribers in the country grew at an annual
compounded growth rate (CAGR) of 12.5% from a period of 2004 to 2008. Kuwait ranked fifth
on the current Arab ICT use index behind Saudi Arabia.
Moreover, as indicated by the triple-digit mobile penetration rates of the UAE, Bahrain, Qatar
and Saudi Arabia, market saturation is unlikely to be the root cause of Kuwait inability to
advance. According to analysts, in spite of a third operator Viva, venturing into the Kuwait
telecommunication market, its mobile penetration rate is still below 100%, which is low when
compared to its surrounding GCC countries, especially UAE that has 137% penetration. The
Mobile penetration rates in Kuwait is ranked 8th among the Arab countries.
A consortium led by Saudi Telecom won the countrys third mobile phone license in
November 2007 at a cost of US$913 million, beating other bidders that included Emirates
Telecommunications Corporation (Etisalat), Dhow Communications (consortium comprising
Kuwait Cable Vision and Iraq Holding), Batelco Kuwait (consortium comprising Bahrain
Telecommunications Company and Investment Dar), Turkcell, Kuwait Finance House, Global
Investment House and a consortium comprising Noor Financial Investment Company, Petra
Jordanian Mobile Telecommunication Company and the Commercial Bank of Kuwait.
Kuwait Telecommunications Company was established in June 2008, and in August launched
an initial public offering (IPO) open only to Kuwaiti citizens for 50% share of the company.
These shares had received the highest subscription in the history of Kuwait. A total of 915,009
people subscribed to Kuwait Telecommunications Companys VIVA, 843,300,500 shares from
August 24 to September 18, 2008, at a lump sum of KD 88.54 million, covering the value of
shares by 3,339 times. The company capital was set at KD 50 millions for 500 million shares,
50 percent of which is reserved for the founding members; such as the Kuwait Investment
Authority, 6 percent, and the Public Authority for Social Security 6 percent. Other founding
members include Zakat House, Awkaf General Secretariat and Public Authority for the Minors'
Affairs, each of which owns 4 percent of the shares. The mother company, STC, has the lion's
share, 26 percent of the total amount of shares.
In another important development in the Kuwaiti mobile phone sector, Qatars state-owned
telecommunications provider Qtel purchased a 51% stake in Wataniya Telecom previously
held by Kuwait Projects Company (KIPCO) in March 2007. The deal, worth US$3.80 billion, was
touted as the largest private-sector transaction in Kuwaits history, as well as the largest
telecommunications deal in the Arab world.
Kuwait remains the only GCC country without an independent telecommunications regulatory
authority, with the Ministry of Communications taking on a temp role at present. However,
given that the government retains a minority interest in Kuwait Telecommunications
32

Company, Zain and Wataniya Telecom, and is the sole provider of fixed line services in the
country through the Ministry of Communications, the need to establish an independent
regulatory authority has become more pressing.
While Kuwaits fixed-line sector has not witnessed negative growth, net subscriber additions
was numbered only 300 in 2007. In 2008 however, this scenario has changed with an addition
of 29,811 new subscriptions leading to an increase in fixed line growth ratio to 5.76%. The
current growth rate of 5.76% has resulted in a fixed line penetration ratio of 15.90%, however
the new subscriber figures hasnt affected previous years penetration result of 15.21% much.
The number of Internet users rose from 1,050,000 to 1.27 million by end 2008, with growth
measuring 21.18%. Penetration rose to 36.97%, ranking the country fourth in the Arab world
behind Bahrain. The rise in Internet users was mirrored by a similar growth in Kuwaits
computer installed base, to register 1,021,614 computers. Kuwaits computer installed base
grew at a compound annual growth rate (CAGR) of 22.75% over the period 2004 to 2008. By
end 2008, computer penetration rose to 29.68%.
OMAN
COUNTRY ICT PROFILE OMAN
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Oman Mobile
Nawras
Internet Users
246,978
265,237
269,700
268,065
274,178
806,280
1,333,225
1,818,024
2,500,115
3,219,865
806,280
220,000
160,000
1,089,225
244,000
265,000
200,000
1,246,024
572,000
320,000
250,000
1,483,115
1,017,000
390,000
320,000
1,709,000
1,510,865
540,150
416,000
Oman Mobile Operator Market Share , 2007
59.32%
Oman Mobile Operator Market Share , 2008
53.08%
46.92%
40.68%
Oman Moblie
Nawras
Oman Moblie
Nawras
33

Oman ranked 7th overall on the 2008 Arab ICT Use Index with a score of 1.48, from 1.23 in
2007. The countrys overall growth was driven by sustained growth in mobile phone
subscriptions, Internet users and computer installed base. Mobile phone subscriptions grew
at a compound annual growth rate (CAGR) of 41.1% over the period 2004 to 2008, while
Internet users grew at a CAGR of 25.18% over the same period and computer installed base
by 26.98%.
Omans Telecommunications Regulatory Authority was established in 2002 to pave the way
for the liberalization of the telecommunications sector. In 2004, it issued a 15-year license for
the provision of mobile phone services to Oman Mobile, a subsidiary of incumbent Oman
Telecommunications Company (Omantel), which migrated its own mobile subscribers to the
new company. The following year, the Omani Qatari Telecommunication Company, 55%owned by Qtel (with the balance going to the Omani government and a Danish concern),
received a similar license, launching in March 2006 under the brand name Nawras and
offering 3G services before the year was out.
The countrys mobile phone sector has maintained steady growth since the introduction of
competition in the country, with mobile phone subscriptions rising by 37.52% in 2007,
compared to 36.37% in 2006. However Omans mobile phone subscription in 2008 was lower
in growth compared to its previous years at 28.79%. Total subscriptions by end 2008
numbered over 3.2 million, with Oman Mobile retaining its market lead, at 53.08% market
share. However, the mobile phone operator lost considerable market share with the rise of
the second operator Nawras, whose market share rose to 46.92% from 40.68% in 2007.
Nawras subscriber base had only 48.56% growth in 2008 compared to the phenomenal
77.80% growth of 2007, Nawras registered about 493,865 new subscribers in 2008 bringing
the subscribers base grand total to just over 1.5 million subscribers by the end of 2008. Oman
net Mobiles subscriber base didnt elevate much as well in 2008, the subscriber base had only
15.23% growth compared to the 19.03% of 2007.A complete commercial launch of the all new
3.5G network for Oman Mobile was done on March 2009. This new scalable network service
provided by Oman Mobile would support the bandwidth hungry services of the future. Almost
89.9% or 2,895,053 mobile users have prepaid subscriptions and only 10% have postpaid
subscriptions.
3,500,000
2,895,053
3,000,000
2,500,000
2,206,493
2,000,000
1,500,000
1,000,000
500,000
324,812
293,622
0
2007
2008
Prepaid
Postpaid
34

Meanwhile, Oman Mobile also became the very first company in Middle East region to grant
resale rights to firms using its infrastructure. The telecom company has signed contracts with
two new mobile operators Renna and FRiENDi allowing them to resell mobile services to
subscribers across Oman using their own brands and marketing and sales channels. The UAE
based FRiENDi mobile, the first mobile virtual network operator (MVNO) in the Middle East
and the Sultanate's first mobile reseller went live on April 2009 and its rival the fully Omani
owned MVNO operator Renna on May 2009. Both firms are focusing on transforming the
telecommunication industry in Oman by providing value added products and services to its
customers. Oman became the first country in the region to have adopted a Mobile Virtual
Network Operator (MVNO) business model.
Omans overall growth in subscriptions (fourth highest rate among GCC) reflected strongly on
the countrys mobile phone penetration rate, which rose to 106.86%, a rate appreciably
higher than the 87.78% attained by end 2007.
In mid-2006, Nawras and Oman Mobile became the first in the region to implement mobile
number portability (MNP), which enables subscribers to port their mobile number from one
operator to the other. By end 2007, some 24,000 subscribers had been ported between the
two mobile phone service providers. As one of the Sultanates first 3G implementer, Nawras
also has plans to invest in the latest generation fiber optic backbone and WiMAX wireless
access networks across Oman. In the first two years of its plan, Nawras will expand the
wireless broadband service to five governorates and 14 states.
Omans overall fixed line subscriptions registered a drop in 2007, falling 0.61% from 269,700
in 2006 to 268,085 subscriptions however, during 2008 the fixed line subscription registered a
skimpy growth of 2.28% with 274,178 subscribers, far better than the previous years negative
growth rate. From the 274,178 subscribers there are 220,169 postpaid subscribers and 47,306
prepaid subscribers along with 6,703 payphones. Omantel began developing a Wireless Local
Loop (WLL) network in 2005 to bring fixed-line services to approximately 200 villages in rural
areas where cable connectivity was impractical because of rough terrain or prohibitively high
cost or where the existing fixed-line network was unable to support new broadband
technology. Omans WLL subscriptions by end 2007 numbered 19,950 and are reflected in the
countrys fixed line subscription figure. Meanwhile, Omans fixed line penetration rate also
dropped, falling from 10.22% in 2006 to 9.77% in 2007 and finally to 9.10% in 2008.
Omantel was the sole provider of fixed line services in the country until 2007. Omantel lost its
monopoly in this sector by the end of 2008, when a new fixed-line operator entered the fray.
Nawras Consortium (70 percent owned by Qatar Telecom) won the license to set up Oman's
second fixed-line network. Oman had shortlisted six bidders for the licence. While earlier it
named a consortium led by Hong Kong operator PCCW-Awaser Oman as the top bidder, the
regulator later dropped this group as it could not meet all the tender conditions. The award to
Nawras ends the monopoly of Omantel as the Sultanate liberalises the sector as part of
efforts to encourage foreign investment to counter falling oil production. The 25 year
renewable license is part of a package that includes a 15 year license for broadband Internet
services, renewable for another 10 years
However, Omantel has been gearing up for the competition. The company has developed
several plans and strategies to maintain its position as the leading provider of integrated
35

telecom services in the Sultanate. In August, the company announced a new tariff scheme for
national and international fixed line calls, as well as the upcoming launch of Voice over
Internet Protocol (VoIP) in November 2008. The company is also working hard to expand the
coverage of broadband Internet services. The Group has also introduced a number of new
services including the 3.5G network on March 1, which will supplement broadband and the
wireless network used by Oman Mobile and Omantel to serve the Sultanate
In an effort to further liberalize the telecommunications sector, the Omani government the
majority stakeholder in Omantel announced in July 2008 that it was selling a 25% stake in
the company, reducing its share in the company to 45%. In August, it announced that eight
international and regional telecommunications providers had qualified to submit initial
proposals for the 25% stake. A short list of four to five bidders is expected to be announced
soon. Omantel completed its first international acquisition in April 2008 with a 65% stake in
Worldcall.
Omans Internet users rose 38.50% in 2008, from 390,000 users to 540,150, resulting in a
penetration rate of 17.93%. The total number of Internet subscriptions at end 2008 was
89,528 with 55,767 of them dial-up, 31,635 ADSL, 812 leased line and the remainder, other
Internet access modes. Subscription-free prepaid Internet cards and cyber cafs also
contribute to the growth in Internet usage in the country. Prepaid Internet card sold in 2008
rose to 27,600 in 2008.
Of all GCC countries, Oman had the lowest penetration rate for computer installed base in
2008, at 13.81%. Although the countrys computer installed base did achieve double-digit
growth in 2007 (17.76%) to register 247,300 computers, it still lags roughly five percentage
points behind Saudi Arabia in terms of penetration. The scarceness of installed computers is
one of the greatest obstacles to ICT growth in Oman.
QATAR
COUNTRY ICT PROFILE QATAR
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Qtel
Internet Users
190,876
205,386
217,000
242,000
263,363
490,333
716,763
919,773
1,260,000
1,946,343
490,333
135,000
168,000
716,763
220,000
210,000
919,773
304,000
270,000
1,260,000
420,000
352,000
1,946,343
592,200
498,080
36

Qatar Mobile Subscribers (2004-2008)
2,500,000
1,946,343
2,000,000
1,500,000
1,260,000
919,773
1,000,000
500,000
716,763
490,333
0
2004
2005
2006
2007
2008
Qatar ranked third among MENA economies on the 2008 Arab ICT Use Index with a score of
2.12. The countrys mobile phone subscriptions witnessed the strongest growth, with
subscriptions growing at a compound annual growth rate (CAGR) of 41.2% over the period
from 2004 to 2008, while Internet users grew at a CAGR of 44.72% over the same period and
computer installed base at 31.22%. The slowest growing sector was fixed line subscriptions,
which grew at a CAGR of 8.4% over the period 2004 to 2008.
When it was first established in 1987, Qatar Telecom (Qtel), which is 51% government-owned,
was promised exclusive control of the countrys telecommunications market until 2013, but
the promulgation of a new Telecommunications Law in 2006 has moved up the date
considerably. The law gave the countrys regulator, the Supreme Council for Information and
Communications Technology (ictQATAR), the power to issue new mobile and fixed-line
licenses, and the regulator immediately announced that one of each would be awarded by
end 2007.
Twelve companies pre-qualified for the mobile license by July, including Airtel (ACE
consortium), Verizon (Argos consortium), AT&T, Batelco, Digicel, Etisalat, Jordan Telecom,
Zain (formerly MTC), Orascom Telecom, Omantel-Belgacom (QUIC consortium), Reliance
Telecom and Vodafone (Vodafone Qatar Foundation consortium). Following a second round
of bids, the regulator awarded Qatars second mobile phone license to the Vodafone and
Qatar Foundation consortium in December for US$2.12 billion. The consortium will hold 45%
of the share capital of Vodafone Qatar, while government institutions will hold 15%.
Meanwhile, the remaining 40% will be allocated in an Initial Public Offering (IPO) open only to
Qatari nationals. Vodafone Qatar was scheduled to launch services in March 2009, but this
was put back until June, with the Supreme Council for Information and Communication
Technology (ictQatar) revising the terms of Vodafones licensing agreement in April, giving it
until September 1 to establish coverage over 98% of the country.
Soon after ictQATAR awarded the second mobile phone license, the regulator invited bids for
the countrys second fixed line license, which would bundle WiMAX services into the license.
In February 2008, eight companies registered interest in bidding for the license, including
AT&T, Batelco, British Telecom, Eutelia, Jordan Telecom, PCCW-QIPCO, Verizon and Vodafone.
In September, ictQatar announced that the Vodafone and Qatar Foundation consortium that
had been awarded the countrys second mobile phone license had also been awarded the
second fixed line license, from a short list that included Jordan Telecom and PCCW-QIPCO.
Launch of fixed line services is expected to take place in 2009.
37

This sudden move in the direction of market liberalization does not mean Qtels monopoly
was hindering growth in the sector. As the only remaining mobile phone monopoly in the Gulf
Cooperation Council, Qtel achieved impressive growth of 54.47% in mobile phone
subscriptions, bringing the number of subscribers up from 1,260,000 in 2007 to 1,946,343 in
2008. Qatars growth rate is quite impressive compared to those of competitive markets in
the region, such as the UAE (28.04% growth), Saudi Arabia (26.97%) and Oman (28.79%), with
the country ranking the best (1st) among MENA economies on the mobile subscriber growth
scale.
Qatars population for 2007 was 1,133,972 from slightly over 965,092 in 2006, where mobile
subscriber penetration in 2006 was calculated at 81.11% and 94.22% for 2007. On the other
hand, mobile phone penetration in 2008 registered a high 125.27% with 1,946,343
subscribers of which 237,689 are prepaid and 1,445,291 are postpaid. Based on the current
figures, Qatar has crossed the 100% penetration threshold, crossed by neighboring economies
of UAE, Bahrain and Saudi Arabia.
Meanwhile, Qatar witnessed a drop in its fixed line penetration rate for 2008. Fixed line
penetration registered a mediocre 16.95%, at 263,363 fixed line subscriptions, down 2.19%
from its 2006 and 1.15% from its 2007 penetration rates. In 2007, Qatar was the only country
in the GCC to register double digit growth in fixed line subscriptions, with the second-fastest
growth recorded was UAE, at 5.80%, 2008 however showed much slower growth rates for
fixed lines in Qatar.
Qatars Internet users rose to 592,200, at a growth rate of 41% over 2007s 420,000 users.
The resulting penetration rate was 38.11%, the 2nd highest rate in the Arab world.
Meanwhile, Qatar ranked third in computer penetration (32.06%) with the number of
installed computers rising 41.50% to 498,080.
SAUDI ARABIA
COUNTRY ICT PROFILE SAUDI ARABIA
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Al Jawwal
Mobily
Bravo
3,700,000
3,800,000
3,950,000
4,000,000
4,123,000
9,200,000
14,200,000
19,668,191
28,400,041
36,059,212
9,200,000
2,400,000
2,000,000
11,900,000
2,288,194
11,806
3,400,000
2,210,000
13,800,000
5,800,000
68,191
4,800,000
2,695,000
17,300,000
11,008,200
91,841
6,400,000
3,548,800
19,100,000
14,800,000
149,212
2,010,000
7,936,000
4,755,392
Zain- SA
Internet Users
38

Saudi Arabia Mobile Operator Market Share ,
2007
Saudi Arabia Mobile Operator Market Share ,

2008
60.92%
52.97%
5.57%
0.32%
Al Jawwal
38.76%
Mobily
Bravo
0.41%
Al Jawwal
41.04%
Mobily
Bravo
Zain
With the largest geographical area and population of all GCC states, Saudi Arabia has still
managed to make remarkable progress over some of its peers in promoting the use of
information and communication technology. According to recent reports from the CITC
(Communication and Information Technology Commission, the countrys regulator) telecom
service revenues have been steadily growing at a cumulative annual rate of around 15%
annually, increasing form around SR 20 billion on 2001 to around SR 58.9 billion in 2008.
Mobile service revenues represent around 80% of all telecom sector revenues. Scoring 2.09
on the Arab ICT Use Index, the country had the highest mobile penetration among Arab
economies, its advancement driven largely by the steady growth in the countrys mobile
phone sector. According to industry analysts, Saudi Telecom is under intense pressure to
improve profitability as a regional telecom war heats up, with rivals like Kuwait's Zain and
Emirates Telecommunications competing in the region. Mobily, STC's most serious rival,
recently posted a 50 percent rise in second-quarter net profit, setting the bar high for STC and
the third mobile phone Zain Saudi Arabia. STC had a drop of 22% in second-quarter profit
(2009), quoting foreign expansion costs and higher roaming fees had hurt profitability.
The number of Saudi mobile phone subscriptions grew to about 26.97% in 2008 to over
36,059,212 from 28.40 million in 2007. Competition in the mobile telecom market, which
started in 2005, intensified in 2008 with the launch of the service of the third mobile license
operator Zain in Saudi Arabia. The growth rate of 26.97% for 2008 was almost half of that
happened in 2007 which had a laudable growth rate of 44.4%. The compound annual growth
rate (CAGR) over the period from 2004 to 2008 was 40.7%. In terms of absolute numbers,
Saudi Arabias mobile phone subscribers ranked second in the Arab world, behind Egypt,
whose mobile phone subscribers exceeded 36.05 million. The strong growth in mobile phone
subscriptions is reflected in the evolving mobile phone penetration rate, with 11.42% in 2007
to 142.87 in 2008, moving Saudi Arabia to the top spot both among the GCC countries and in
the Arab world for this indicator. From the 36.05 million subscribers almost 84.7% are prepaid
subscribers and about 15.25% are postpaid subscribers.
39

35,000,000
30,559,000
30,000,000
23,600,000
25,000,000
20,000,000
15,100,000
15,000,000
10,000,000
5,000,000
9,527,000
4,900,000
4,300,000
4,673,000
4,600,000
4,800,041
5,500,212
2004
2005
Prepaid
2006
2007
2008
Postpaid
Although the state-run and partially-privatized operator Saudi Telecom continued to

dominate the mobile sector in 2008 with 19,100,000 subscribers and a market share of
52.97% with a subscriber growth of about 10.40%. The greatest gains in subscriber growth
were made by the regions third mobile operator Bravo this year at 62.47% (compared to the
34.68% of 2007) , it had registered about 57,371 new subscribers in 2008, and its highest ever
since its inception. The Saudi-based Etihad Etisalat (Mobily) had a subscription growth of
34.45% in 2008 compared to the startling 89.8% growth of 2007, and a market share of
41.04% (from 38.76% in 2007). Owned by a consortium of Saudi investors and the UAEs
Etisalat, Mobily launched its mobile phone operations in May 2005 and began offering 3.5G
services the following month. At the same time, Bravo, entered the market as a specialized
wireless operator offering Push-to-Talk and other mobile telephony service via the regions
first integrated Digital Enhanced Network (iDEN). Majority-owned (55.6%) by Wataniya
Telecom since March 2007, Bravo experienced significant growth in 2008, although its
minuscule market share (5.57%) reflects its business orientation. All operators introduced
MNP (Mobile Number Portability) during 2006 in accordance with the directives of the
Communication and Information Technology Commission (CITC), the countrys regulator.
Mobily purchased 99.9% of Mobily InfoTech (India), in 2007, an IT and consulting services
provider, for SAR9.2 million (USD2.45 million). Mobily InfoTech began operating in 2008,
providing services exclusively to Etihad Etisalat, but is expected to begin serving other
telecoms by 2010. In 2008, Mobilys Saudi-located transactions included the acquisition of
99% of data communications network, Bayanat Al Oula, for SAR1.5 billion (USD400.8 million),
the purchase of a majority stake in the Etihad Etisalat for Commercial Investment Company
and the acquisition of 96% of an ISP, Zajil International, for SAR80 million (USD21.3million)
In June 2007, the Saudi Council of Ministers granted a new mobile phone license to a
consortium led by Kuwaits Zain. In addition to paying US$6.11 billion for the countrys third
GSM and second 3.5G license, the joint stock company plans to invest US$6-8 billion in the
new venture during the first five years of operation. Zain launched commercial operations in
Saudi Arabia in August 2008, offering its customers incentives such as local rates for
international calls made to other Zain subscribers in the region, as well as first month free
40

billing. The company also offered the first half million subscribers a lifetime discount of 50%
on services. Zain currently has a subscriber base of 2.01 million subscribers by December
2008. Zain Saudi Arabia underwent an IPO in February 2008, offering 50% of its shares on
the Saudi Stock Exchange, to raise SAR7 billion (USD1.87 billion). It plans to invest SAR4.88
billion (USD1.3 billion) in its infrastructure in Saudi Arabia.
The Atheeb Trading Company and Batelco won the license to operate Etihad Atheeb, one of
three of its kind in Saudi Arabia, in 2007; the deal, worth SAR522 million (USD139.2 million),
ended the monopoly of Saudi Telecom. Branded as Go, Etihad Atheeb was formed in 2008
with a capital of SAR1 billion (USD267 million). In January 2009, it offered 30% of its shares in
an IPO that raised SAR300 million (USD80 million), the largest in the Middle East and the third
largest worldwide, Etihad Atheeb is expected to launch operations in mid 2009. The
Batelco/Atheeb Trading consortium plans to invest SAR3.8 billion (USD1 billion) in the
companys telecommunication and ICT business by 2014. PCCW (Hong Kong) and Verizon (US)
are the other two licensed to manage fixed-line operators in Saudi Arabia.
The liberalization of Saudi Arabias telephone
Fixed Line Distribution - 2008
market is in line with a national ICT plan to
provide fixed-line service to 25% of Saudis,
73%
mobile service to 80% and to increase PC and
Internet penetration to 30%. According to CITC
the liberalization of the telecom sector and the
resulting competition with in the market has
27%
also helped to create remarkable benefits for
the economy at large and for consumers in
Residential Lines Business Lines
particular in terms of increased service
availability, better quality service, improved customer care, more choices and lower prices.
However, Saudi Telecom has been unable to achieve a fixed-line penetration rate anywhere
near 25%. In fact, fixed line penetration rate has been slow in 2008 with only a mere 0.19%
change form previous years 16.15% to yield 16.34%. Fixed line subscriptions growth in 2008
had a substantial increase of about 3.08% much better than previous years growth of a mere
1.27% to reach 4.12 million from 4 million in 2007. From the 4.12 million lines about 73% or 3
million lines were allocated for residential purposes and the remaining 27% or 1.12 million
were allocated for business purposes.
Computer penetration was around 18.84% with a growth of 34% in computer installed base.
Internet penetration, however, was much closer to national target levels, as the number of
Internet users increased by 24% to 7.936 million from 6.40 million, for a penetration rate of
31.4%. The CITC put the total number of broadband subscribers by end 2008 at about
1,331,000. The figure represents a strong growth rate of 94.9% over end 2007 broadband
subscribers (683,000). There are 64 licensed Internet service providers in the kingdom (with
17 licensed in 2007 alone) but only about 20 are currently operational.
41

UNITED ARAB EMIRATES
COUNTRY ICT PROFILE UAE
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Etisalat
Du
Internet Users
1,188,000
1,237,000
1,310,000
1,371,000
1,640,000
3,683,000
4,534,500
5,520,000
7,872,000
10,079,000
3,683,000
1,320,000
850,000
4,534,500
1,550,000
1,000,000
5,520,000
1,980,000
1,295,000
6,372,000
1,500,000
2,560,000
1,780,900
7,300,000
2,779,000
3,353,600
2,475,451
UAE Mobile Operator Market Share , 2007
19%
UAE Mobile Operator Market Share , 2008
27.57%
72.43%
81%
Etisalat
Du
Etisalat
Du
The United Arab Emirates, undoubtedly ranked first among MENA economies on the 2008
Arab ICT Use Index, displayed strong growth in most sectors, despite high penetration rates
across all indicators. According to recent industry reports Etisalat continued to perform well
in 2008, and it has acquired an impressive set of overseas assets in 18 countries. Even with
the presence of a second mobile operator Du, competition in its home market is relatively
benign and the UAE should continue to be a cash cow for Etisalat. From recent reports the
company generates strong cash flow and the overseas operations continues to be a growth
engine for the company, as UAE subscribers via population eases in 2009. Stimulated by the
liberalization of the mobile phone sector, mobile phone subscriptions in the country grew at a
28.6% compound annual growth rate (CAGR) over the period 2004 to 2008, however the
result of the global crisis could lead to a fall in population growth in the UAE, which has been
one of the key drivers for increased subscriber growth over the past few years.
According to recent reports, the United Arab Emirates mobile phone subscriber figures for
2008-2009 are expected to witness a sharp drop. The result of the economic slowdown should
lead to a reduction in population growth for the UAE, which has been one of the key drivers
for increased subscriber numbers over the last few years. With population easing, subscriber
42

growth should come from users of multiple sim cards from mobile broadband and from
business visitors and tourists.
UAEs second national telecom operator, Emirates Integrated Telecommunications Company
(brand name Du) officially launched its operations on February 11th, 2007, breaking Emirates
Telecommunications Corporations (Etisalat) long-standing monopoly on the United Arab
Emirates telecommunications market. Established in late 2005, Du signed a 20-year licensing
agreement in February 2006 worth US$33.9 million with the United Arab Emirates
Telecommunications Regulatory Authority, to provide wireline, wireless, international and
data communications services across the country. Dus current shareholders comprise the
United Arab Emirates federal government (40%), Mubadala Development Company PJSC
(20%), Emirates Communications and Technology Company (20%) and public shareholders
(20%).
Furthermore, Etisalat and Du are expected to enjoy a duopoly over fixed line, mobile phone
and Internet access services until at least 2010. Notably, the United Arab Emirates is required
to fully liberalize its telecommunications sector by 2015 (negotiated from an earlier deadline
of 2010) as dictated by its commitment to the World Trade Organizations Basic Agreement
on Telecommunications, to which it is a signatory. While there has been talk of infrastructure
sharing no details have been provided, Etisalat would however be required with maintaining
and enhancing its existing infrastructure.
By year end 2007, less than 11 months after starting operations, the countrys second mobile
phone operator had registered over 1.50 million subscribers by the end of 2007 the 10-month
mark and to 3 million, by the close of 2008. Its subscriber growth since inception has
developed at a rapid pace to about 85.3%. This strong growth in subscriber base has resulted
in higher revenue for the company and has helped to capture dominant market share from
the former incumbent, Etisalat. A large segment of these subscribers were previously Etisalat
subscribers who reserved their Etisalat numbers on the Du network (Du recorded 750,000
number pre-bookings ahead of its commercial launch), however Du continue to capture new
active users by its more attractive and cost effective promotional offers.
Du reported 2,779,000 mobile phone subscribers for year end 2008, to Etisalats 7,300,000,
bringing the total number of mobile phone subscribers in the United Arab Emirates to
10,079,000. In total, mobile phone subscriber additions registered 2,207,000 in 2008 (928,000
net additions for Etisalat to 1,279,000 for Du). Active mobile subscribers for Etisalat grew at
14.56% in 2008 compared to the 85.27% growth for Du. Du continues to invest in its network
with an investment of nearly 1.9 billion Dhs for expanding its base stations for greater
coverage and capacity in Dus 3G and 2.5G networks in the country.
Meanwhile, mobile phone penetration rose to 137.35%, the second highest penetration rate
among the GCC in 2008, up from 121.22% in 2007.
Analysts believe that despite the credit crisis, the fall in population or the weakening
emerging markets there will be positive growth in revenues for both the telecom operators in
the country, Etisalats growth in revenue is driven by Internet and data revenue growth in the
UAE and an increasing contribution from overseas subsidiaries whereas Du should continue to
capture net mobile and increase ARPU (average revenue per user) through increased usage
43

driven by promotional offers. Offering its fixed line service outside the "New Dubai" area
should provide an additional boost to revenues.
Fixed Line Subscribers UAE
1,600,000
1,360,000
1,325,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
280,000
46,000
2007
2008
Du
Etisalat
At 22.35%, the United Arab Emirates fixed line penetration rate in 2008 was the highest in
the Arab world. The countrys fixed-line subscribers numbered 1,640,000 in 2008, rising
18.33% over 2007. Total fixed line subscribers include Dus 282,000 residential and business
subscribers in several free zone areas and freehold residential complexes in Dubai.
The TRA of the country keeps a pristine check on all regulation of promotions offered by the
operators. Earlier in April 2009, the TRA had issued a fine of 400,000 Dhs on Etisalat for not
complying with fair competition rules set by the TRA. The country's two operators were
required to introduce carrier pre-selection, which allows landline telecom users to choose
between the operators. The service was introduced by Du but Etisalat failed to comply.
As in past years, the United Arab Emirates Internet penetration rate of 45.7% in 2008 is the
highest in the Arab world. However, despite its lead and 31% growth in the number of
Internet users from 2,560,000 in 2007 to 3,353,600 in 2008, According to the TRA, total
Internet subscriptions numbered 1,153,000 in 2008, up from 904,000 in 2006.
The United Arab Emirates computer installed base rose to 2,475,451 in 2008, up 39% from
2007s 1,780,900 computer installed base, with a penetration rate of 33.73%
44

G CC B R O A D B A N D P E N E T R A T I O N
BROADBAND INTERNET PENETRATION GCC, 2008
POPULATION
INTERNET
SUBSCRIBERS
BROADBAND
SUBSCRIBERS
BROADBAND/INTER
NET S UBSCRIBERS
BROADBAND PENETRATION
(SUBSCRIBERS )
Bahrain
1,156,114
114,502
109,994
96.06%
9.51%
UAE
7,338,140
1,153,000
528,900
45.87%
7.21%
Qatar
Saudi
Arabia
1,553,729
115,888
103,400
89.22%
6.65%
25,239,067
3,000,000
1,331,000
44.37%
5.27%
Kuwait
3,441,813
376,000
124,200
33.03%
3.61%
Oman
3,013,184
89,528
31,635
35.34%
1.05%
COUNTRY
Bahrain, the smallest market in the region with a population size of just 1.15 million, turns out
to be the most competitive state in terms of broadband penetration (9.51%) as at end 2008.
There were about 114,000 Internet subscribers in Bahrain, of which 96% were utilizing
broadband and 4% were using dial-up connections. The number of broadband subscribers in
Bahrain had increased by 50%, from 73,563 subscribers in 2007 to 109,994 in 2008.
Residential broadband customers represented 92% of the broadband market in Bahrain, with
majority of these opting for 256kbps Internet access speed.
UAE has the second highest broadband penetration in the GCC at 7.21%. It also has the
second highest number of broadband subscribers in the GCC next to Saudi Arabia with
total of 528,900 subscribers as at end 2008. Furthermore, its broadband to Internet subscriber
ratio, at 45.87%, trails those registered in Bahrain (96.06%) and Qatar (89.22%).
Notably Qatar offers the lowest broadband price according to a comprehensive broadband
study conducted in the region by management consulting firm Arthur D. Little. The study
conducted in 2008 asserts that Qatar offers [broadband services at a price point that is]
between 10% and 23% lower than that of the average of other GCC nations. As at end 2008,
Qatar had 103,400 broadband subscribers with a penetration rate of 6.65%.
With the highest population in the GCC, Saudi Arabia had a broadband subscriber penetration
of 5.27% as at end 2008. The number of broadband subscribers in Saudi Arabia has also grown
from 683,000 in 2007 to 1,331,000 in 2008.
Of the 1,331,000 there were 1,000,000 DSL and 331,000 wireless (WiMax & Mobile HSPA)
connections. The broadband to Internet subscriber ratio in the Kingdom stood at 44.37% in
2008. As at end 2008, household broadband penetration in the country stood at 23% or 23
broadband connections for every 100 households. Kuwait and Oman were the bottom
qualifiers on the list with only 3.61% and 1.05% broadband subscriber penetration,
respectively.
45

Kuwait had 124,200 broadband subscribers, with a broadband to Internet ratio of 33.03%. On
the other hand, Oman registered a 27.3% growth in its Internet subscribers from 70,290
subscribers in 2007 to 89,528 in 2008. It also achieved a 66.64% growth in terms of broadband
Internet subscribers in 2008, up from 18,984 in 2007.
46

IC T P E N E T R A T I O N I N L E V A N T 2008
ICT PENETRATION
LEVANT 2008
PENETRATION
MOBILE PHONE
PENETRATION
Jordan
Egypt
Lebanon
Syria
Iraq
8.87%
16.34%
11.94%
19.06%
5.75%
6 Palestine
0.85%
RANK
COUNTRY
1
2
3
4
5
FIXED LINE
IN
TOTAL
13.28
PENETRATION
COMPUTER
PENETRATION
ICT USE
INDEX
92.96%
72.79%
27.35%
48.01%
72.79%
24.63%
16.53%
28.43%
17.26%
10.09%
13.93%
5.65%
16.02%
7.19%
4.37%
1.4
0.96
0.91
27.35%
14.17%
5.01%
0.76
56.47%
INTERNET
15.85%
6.22%
0.82
0.8
0.92
Holding on to the trend seen last year, Jordan was ranked 6th in the Arab world on the 2008
ICT Use Index, just behind the five most powerful MENA economies, Jordan easily led all
competitors in the Levant, taken here as comprising Egypt, Syria, Lebanon, Palestine and Iraq.
The driver of Jordanian growth has been without doubt its competitive mobile phone market,
with the mobile phone penetration rate rising to 92.96% in 2008 as well as its ranking second
on Internet and computer penetration at 24.63% and 13.93%. Lebanon maintained its
regional lead, however, in Internet (28.43%) and computer penetration (16.02%), ranking
second in the Levant but 13th overall in the MENA region. Syria, meanwhile, topped the
region in terms of fixed line penetration (at 19.06%). Overall, the Levant region averaged a
score of 0.92 on the new ICT Use Index compared to the 0.70 in 2007, with average mobile
phone penetration registering a higher 56.47% compared to the 41.59% of 2007, fixed line
penetration was 13.28%, not much changed since the 13.12% in 2007, Internet penetration
15.85% and computer penetration 6.22%.
EGYPT
COUNTRY ICT PROFILE EGYPT
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Mobinil
Vodafone
Etisalat Misr
Internet Users
9,600,000
10,400,000
10,800,000
10,900,000
11,900,000
7,584,948
12,820,993
17,970,815
31,550,626
44,526,000
4,015,948
3,569,000
3,900,000
1,700,000
6,695,993
6,125,000
4,800,000
2,050,000
9,266,815
8,704,000
6,100,000
2,600,000
15,117,626
13,333,000
3,100,000
8,620,000
3,304,300
20,115,000
17,611,000
6,800,000
12,570,000
4,295,590
47

Egypt Mobile Operator Market Share , 2007
Egypt Mobile Operator Market Share , 2008
45.18%
47.92%
42.26%
15.27%
9.83%
Mobinil
39.55%
Vodafone
Etisalat Misr
Mobinil
Vodafone
Etisalat Misr
Egypt ranked in 12th place overall on the 2008 Arab ICT Use Index, scoring 0.96, which
represents a 37% growth over the countrys 2007 score of 0.70. The country witnessed strong
growth on all indicators, with mobile phone subscriptions and Internet users the strongest
drivers of this growth. Egypts Internet user sectors were the second fastest-growing in the
Arab world, with its mobile users sector the fifth fastest. Fixed line subscriptions grew at a
compound annual growth rate (CAGR) of 5.5% over the period 2004 to 2008, Internet users at
33.99% over the same period and computer installed base at 26.08%. Meanwhile, mobile
phone subscriptions grew at a CAGR of 55.7% over the period 2004 to 2008.
In August 2006, Egypt granted a 15-year $2.90 billion renewable license for GSM and 3G
mobile services to the countrys third operator, Etisalat Misr, a consortium formed by the
United Arab Emirates Etisalat (holding 66% of the shares) and three prominent Egyptian
institutions (Egypt Post, the National Bank of Egypt and the Commercial International Bank),
to provide services alongside Mobinil and Vodafone Egypt, both of which began operations in
1998. In addition to the license fee, Etisalat Misr is required to pay the National
Telecommunications Regulatory Authority 6.00% annual royalty on total revenues. The award
of a 3G license to Etisalat Misr compelled Mobinil and Vodafone Egypt to invest $610 million
each in their own 3G licenses, in addition to paying the countrys regulatory authority 2.40%
annual royalty on total revenues.
Mobinil shareholders comprise the Egyptian Company for Mobile Services (51.03%), Orascom
Telecom Holding (20%) and public shareholders (28.97%). The Egyptian Company for Mobile
Services is, in turn, jointly owned by Orange Group (71.25%) and Orascom Telecom Holding
(28.75%). On the other hand, Vodafone Egypt is 44.79%-owned by Telecom Egypt, the
countrys monopoly fixed-line provider, but the majority of shares (55.04%) are held by
Vodafone Group.
Etisalat Misr launched commercial operations in May 2007, Etisalat Misrs subscribers had
reached 6.8 million, a 119% increase from the previous year and totaling a 15% market share.
Its subscriber base appears to have created erosion to the two existing mobile phone
operators subscription figures, with Vodafone Egypt losing market share from 42.26% to
39.55% in 2008, while Mobinils market share dropped from 47.92% to 45.18% over the same
period. Despite the loss in market share, both operators witnessed strong growth in mobile
48

phone subscriptions, with Mobinils subscriber base grew by a slower 33.06% to over 20.11
million subscribers by end 2008 compared to the 63.14% growth of 2007, while Vodafone
Egypts subscription base grew by 32.09% to 17.61 million. Total mobile phone subscriptions
in Egypt numbered over 44.52 million by end 2008 the highest number of mobile phone
subscriptions in the Arab world in absolute figures. The figure represents a growth rate of
41.13% from 31.55 million in 2007 the third fastest growth rate in mobile phone
subscriptions in the Arab world behind Yemen and Qatar. Egypts mobile phone penetration
rate, as a result, rose to 58.5% from 39.59% in 2007, ranking the country in 14th place among
Arab countries on the penetration indicator.
Fixed line growth in Egypt accelerated to 4.39% in 2008, up from 0.92% in 2007, due to an
increase in subscriptions from 10.90 million to 11.40 million. The countrys placement for
fixed line penetration ranked it 8th in the MENA region dropping from the 7th position it held
in 2007 with 14.99% in comparison to the 15.14% of 2007. Egypt continues to hold the lead in
fixed line subscriptions in absolute terms, with Saudi Arabia a far second with 4.50 million
subscriptions.
Telecom Egypts monopoly over the fixed line sector expired at end 2005 and the National
Telecommunications Regulatory Authority expressed interest in inviting bids for a second
license. Conditions for the licensing of a second fixed line operator were developed in 2007,
with the license to be offered in 2008. Originally slated for July 2008, the bid has been
postponed by TRA for the next year due to volatility in the market conditions. In the
meantime, Telecom Egypt announced new fixed line tariffs effective July. These included 50%
reductions in installation charges, as well as reductions in call rates, in a bid to boost Telecom
Egypts position ahead of the entry of a second fixed line operator into the market. In
September, however, the National Telecommunications Regulatory Authority announced its
decision to defer the bid for the countrys second fixed line license for another year, citing
international market instability. Notably, 12 international and Egyptian service providers had
expressed interest in the license.
Egypt added an additional 3,950,000 Internet users to its tally (12,570,000) for 2008, at a
growth rate of 45.82%, the second fastest growth rate in MENA region for the year. Internet
penetration rose from 11.15% in 2007 to 16.53% in 2008, driven largely by the countrys Free
Internet initiative, which gives users access to dial-up connections without Internet
subscriptions. Moreover, effective February 2006, Egypts regulator made it unnecessary for
the countrys Internet service providers to go through carrier-level and data service providers
to obtain international bandwidth.
By end 2008, Egypts broadband subscriptions numbered 718,847 growing at a rate of 68.31%
over end 2007s 427,085 subscriptions. Eight licensed service providers offer ADSL services in
the country, with TE Data, a subsidiary of Telecom Egypt, dominating the market. A new
policy framework developed by the Egyptian Ministry of Communication and Information
Technology in September 2007 enables broadband services through wireless
communications, especially High Speed Packet Access (HSPA) and WiMAX. The move is
expected to further boost the fast-growing broadband market in Egypt.
Egypts biggest challenge, however, is in the low number of installed computers. Despite
significant growth (30%) for 2007, the total computer installed base was only 4,295,590 and
the penetration rate a mere 5.65%.
49

IRAQ
COUNTRY ICT PROFILE IRAQ
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
MTC Atheer and
Iraqna (Zain)
AsiaCell
Korek Telecom &
Others
Internet Users
850,000
1,000,000
1,100,000
1,400,000
1,653,348e
1,288,400
4,572,300
8,842,057
12,777,000
18,287,470e
7,287,000
9,681,000
4,290,000
6,106,470
1,200,000
2,500,000e
1,990,000
935,000
3,084,500
1,337,050
450,000
480,000
1,200,000
680,000
1,500,000
795,000
Source: Madar Research, e = Estimates
Iraq Mobile Operator Market Share , 2007
Iraq Mobile Operator Market Share , 2008

13.67%
57.03%
52.94%
33.39%
33.58%
9.39%
MTC Atheer
AsiaCell
Korek Telecom & Others
MTC Atheer
AsiaCell
Korek Telecom & Others

Despite its dire security situation and ongoing conflict in the country, Iraq witnessed strong
growth on the 2007 Arab ICT Use Index, its index score rising 29% to 0.80. Growth was largely
driven by the expansion in the mobile phone sector. Iraqs mobile subscribers grew by a
strong 43.13% in 2008 the fastest growth rate in the sector among Arab countries. Total
subscribers were estimated to be 18,287,470 by end 2008, up from 12,777,000 in 2007.
Iraqs mobile phone sector has been the scene of a number of sales, mergers and acquisitions
since its official launch in 2003. Although MTC Atheer attracted 2.3 million new subscribers
boosting its existing total subscriber base , it had lost significant market share to its
competitors to reach 52.94% compared to its 2007 market dominance of 57.03%.
In August 2007, five companies entered the bid for three 15-year mobile phone licenses which
would replace three short term contracts awarded in 2003, soon after the United States
invasion of Iraq. Bidding for the licenses were existing mobile phone service providers,
50

Orascom Telecoms Iraqna, Zains Atheer and Qtels AsiaCell, as well as Korek Telecom
operating in the Kurdish city of Erbil and outsider Turkeys Turkcell. Following the withdrawal
of Iraqna and Turkcell from the bidding, the countrys telecommunications and media
regulator, Iraq National Communications and Media Commission awarded the contracts to
Korek Telecom, Asiacell and Atheer for US$1.25 billion each. Under the terms of their
contracts, the operators must pay 18% of their revenues to the Iraqi government, in addition
to the license fee.
In December 2007, Zain paid $1.2 billion for Orascom Telecoms Iraqna network, merging the
two networks and acquiring the Egyptian providers existing subscribers in the process. The
merged network was rebranded in January 2008 as Zain. By end 2008, Zain had 9,681,000
mobile phone subscribers in the country, with 52.94% market share. Meanwhile, Asiacell,
majority-owned by Qatars Qtel, ended the year with 6,106,470 subscriptions (33.39% market
share) to Korek Telecoms 2,500,000 subscriptions (13.67% market share). Iraqs mobile
phone subscriptions grew at a CAGR of 94.1% for the period 2004 to 2008. Mobile
penetration, on the other hand, changed from 46.63% in 2007 to 59.08% in 2008, causing Iraq
to rise one spot to 13th place among Arab economies on the indicator, behind Morocco.
In September 2006, the Iraq Telecommunications and Posts Company (ITPC) lost its status as
the countrys sole fixed-line provider with the successful conclusion of a tender by the Iraq
National Communications and Media Commission to award licenses for local
telecommunications services through Wireless Local Loop (WLL) technologies. Six WLL
licenses, bundled with WiMAX licenses, were issued, three of which are national and three
provincial, including one national license awarded to ITPC. The remaining five licenses were
awarded to local and foreign investors.
The entry of new fixed line service providers boosted the fixed line sector considerably. The
country witnessed the third highest growth in the Arab region in 2008, with estimated fixed
line subscriptions rising by 25.36 % to register 1,755,000. The figure reflects a CAGR of 19.9%
over the period 2004 to 2008.
However the growth in fixed line subscriptions did little to boost the countrys penetration
rate, which dropped to 5.74% from the 5.11% in 2007 the second lowest rate among Arab
countries, ahead of Sudan.
Iraqs Internet users, meanwhile, grew by 55% during 2008, with numbers rising from
1,990,000 to 3,084,500 users. This reflected in a slight rise in Internet penetration to 10.29%
from 7.26% in 2007. Computer penetration was even more modest, merely 4.37%. Iraq
experienced the highest growth rate in the MENA region, with 43% growth in Iraqs computer
installed base and 55% growth in Internet Users in 2008. The country ranked in 1st place
among MENA economies on both indicators (growth rate) for 2008.
51

JORDAN
COUNTRY ICT PROFILE JORDAN
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Zain-Jordan
Orange Mobile
Umniah
638,000
628,200
614,000
559,000
519,000
1,594,491
2,872,800
4,156,600
4,772,000
5,438,000
1,139,191
455,300
-
1,757,000
750,800
300,000
1,961,100
1,405,500
700,000
1,858,000
1,711,200
1,000,000
2,345,000
1,608,000
1,430,000
500,000
420,000
65,000
645,000
520,000
90,000
840,000
610,000
202,800
1,100,000
708,400
55,000
1,441,000
814,660
Xpress
Internet Users
Jordan Mobile Operator Market Share , 2007
Jordan Mobile Operator Market Share , 2008
35.86%
43.12%
38.94%
29.57%
1.01%
4.25%
26.30%
20.96%
Zain
Orange Mobile
Umniah
Xpress
Zain
Orange Mobile
Umniah
Xpress
Jordans drop in fixed line penetration was the main driver behind the countrys lower
performance on the 2008 Arab ICT Use Index, ranking it first in the Levant region on the
indicator. With four mobile operators, Jordan still is among the most competitive
telecommunications market of all MENA economies. Unlike its 2005 , 2006 or 2007 rank of 6th
place, Jordan was placed 8th overall this year, ranking lower than Libya on the ICT Use Index
2008, with a score of 1.40. Jordans compounded annual mobile subscriber growth rate was
about 35.9%.
Zain (formerly Fastlink, Jordans incumbent provider) continued to dominate the market, the
companys share rose from 38.94% in 2007 to 43.21% in 2008, a substantial gain considering
that the mobile sector grew by 13.96% during the same period. Although Zains total
subscribers had decreased in 2007, 2008 was a blissful year for Zain with an accelerating
growth rate of 26.21% attracting an additional 487,000 subscribers, ending the year with a
total subscriber base of 2,345,000 subscribers. Jordan Telecom subsidiary, Orange Mobile
(rebranded from MobileCom) which attracted 94,000 additional customers in 2008, for a total
52

of 1,608,000 subscriptions or 26.3% of the market. The latter was privatized through a series
of share sales that saw the Jordanian government reduce its stake in Jordan Telecom from
100% in 2000 to only 3.00% in January 2008. In February 2009, Jordans telecoms regulator
noted that two regional companies had expressed interest in acquiring 3G licenses in Jordan.
Although the regulator had planned to auction 3G licenses before the end of January, the
process has been delayed.
Batelcos Umniah (96% stake) also made excellent progress in 2008, rising 43% to 1.43 million
subscriptions in 2008 and increasing its market share to 26.03% from 20.96% in 2007. Jordans
fourth competitor, XPress, which introduced iDEN technology to the Arab world in 2004,
achieved depressing results, decreasing its largely business-oriented customer base from
202,800 to 55,000 in 2008, at a growth rate of -72.8%. By end 2008, Jordans overall mobile
subscriptions had risen from 4,772,000 to 6,730,000 with mobile phone penetration rising
from 83.38% to 92.96%.
However, in May 2008, Jordans Telecommunications Regulatory Commission instructed the
countrys four mobile phone service providers to disconnect some 200,000 unregistered
anonymous subscriptions, in a crackdown on unregulated sale of prepaid subscriptions. The
reduction in subscriptions will be reflected in subscription figures and penetration for 2008.
FixedLine Trend - Jordan
700,000
638,000
628,000
614,000
600,000
559,000
519,000
500,000
400,000
300,000
200,000
100,000
0
2004
2005
2006
2007
2008
Fixedline
Although TRC is making substantial investments in the fixed line sector of the country ( 23
million JD in 2008) Jordans fixed-line sector still gaily continued its downward trend it had
fallowed since 2005 to decline further by -7.16% in 2008, with subscriptions dropping down to
519,000 from 559,000 in 2007. Consequently, fixed line penetration for this country also
dropped from 9.77% in 2007 to 8.87% in 2008. Internet users, meanwhile, rose 31% to
1,441,000 from 1,100,000 users in 2007. Internet penetration rose to 24.63%. Twelve Internet
Service Providers offer various Internet access services to the Jordanian public.
Growth in computer installed base rose to 15% in 2008 as the country added 106,260 new
computers in 2008 to the 2007 base of 708,400. Jordans computer penetration rate, at
13.93%, ranked it 7th in the Arab world, between Oman and Lebanon.
53

LEBANON
COUNTRY ICT PROFILE LEBANON
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
MTC Touch
Alfa
Internet Users
630,000
600,000
670,000
693,000
527,500
880,000
1,011,000
1,124,000
1,216,000
1,436,000
441,200
438,800
610,000
430,000
509,000
502,000
700,000
490,000
565,000
559,000
805,000
530,000
630,000
586,000
935,000
586,400
836,000
600,000
1,196,800
674,360
Lebanon Mobile Operator Market Share ,

2007
Lebanon Mobile Operator Market Share ,

2008
48%
42%
58%
52%
MTC Touch
Alfa
MTC Touch
Alfa
The long-awaited liberalization of the Lebanese telecommunications sector has yet to be

realized owing to a number of factors, few of them business-related. The July/August 2006
war with Israel caused widespread destruction to Lebanons infrastructure, including mobile
and other communications networks. Total network damage was estimated at US$15 million,
which seems like a modest amount until compared with the overall value of the countrys
outdated mobile infrastructure approximately US$100 million. After the war concluded, an
earlier power struggle between the government and opposition was quick to resume, bringing
the country to a standstill. The consequences of these developments for the Lebanese
telecommunications sector included delays in naming a chairman and board of commissioners
for the countrys Telecommunications Regulatory Authority (TRA), which was seen as the first
step toward the privatization of state-owned mobile and fixed line networks. The TRA,
established in 2002, effectively started operations in February 2007 following the longawaited nomination of its board members.
54

In January 2007, Lebanon pledged to privatize its telecommunications sector at the Paris III
donor conference in a bid to raise grants and soft loans to the government, which is trying to
reduce the countrys spiraling public debt. In November, the country announced the official
launch of the mobile phone network privatization process, setting February 2008 as the
deadline for the public auction of the 2o-year licenses. By year-end 2007, some 10 regional
and international telecommunication providers had expressed interest in acquiring the
licenses. According to the license terms, winning bidders would be required to create a joint
stock Lebanese company, and transfer one third of the equity of this company to the
government as part of the payment for the license tender. The government would then sell
part of its shares through an Initial Public Offering with share ownership restricted to
Lebanese citizens.
Furthermore, the Lebanese government announced that the privatization plan included the
creation of Liban Telecom, a new operator that would receive Lebanons third mobile phone
license, while inheriting the operational functions of the Ministry of Telecommunications and
of Ogero (Organisme de Gestion et dExploitation de lex-socit Radio Orient), the stateowned company that runs the countrys fixed line network.
Currently operated by Kuwait-based Zain (as MTC Touch - only network where the operator
did not rebrand as Zain) and the German-Saudi consortium Fal Dete (as Alfa), Lebanons two
mobile networks were originally established through 10-year build-operate-transfer (BOT)
contracts that were prematurely terminated in 2002 by the government, which compensated
the two private firms involved (Cellis and Libancell). According to the terms of the new
agreement, all mobile revenues go directly to the state, which pays the new operators a
monthly fee of approximately US$4 million. Although the government earns some US$1.30
billion a year (approximately 40% of total state income) from the networks, it hopes to collect
as much as US$5-6 billion from the sale of the two licenses.
However, the countrys ongoing political crisis has set back the privatization process
repeatedly. Sale of controlling stakes in the two operators is now expected to be delayed until
mid-2009, following Lebanons parliamentary elections. In the interim, Zains and Fal Detes
four-year licenses expired in June 2008, but the Lebanese government is set to renew them
until the privatization process is complete. Furthermore, Liban Telecom has yet to be
established.
Until the fate of the mobile networks is decided, growth is expected to remain stagnant
despite the promise held out by the Lebanese market. In 2008, the number of Lebanese
mobile subscribers grew by 18.09%, reaching 1,436,000 from 1,216,000 in 2007. In 2007, the
two mobile operators shared the market in almost equal measure with Zain having a slight
advantage over Fal Detes Alfa, with 51.81% market share. But in an environment where the
Lebanese government sets the prices and the two operators receive a fixed annual amount,
regardless of the revenue they may generate, both Zain and Fal Dete lack incentives to invest
in their networks or expand their subscription base. In 2008, MTC Touch added 206,000 new
subscribers to its base resulting in a subscription growth of 32.7% from the 11.5% in 2007.
Alfa on the other hand lost considerable market share (16%) in 2008 to its regional competitor
and had a limited subscribers growth of 2.39% in 2008.
Lebanon experienced the third-lowest mobile penetration in the MENA region behind Syria,
despite its poor penetration rate 34.1% up significantly from it even lower rate of 25.87%
55

in 2007. Meanwhile,the country ranks 16th in the Arab world in terms of penetration, ahead
of only Sudan and Yemen. Another telling statistic is the countrys mobile to fixed ratio: at
only 2.72 mobile phone subscriptions for every fixed line in the country in 2008, Lebanon has
the second lowest mobile phone to fixed line ratio in the Arab world. The sale of the mobile
licenses is expected to revive competition, reducing the astronomical prices currently
charged, improving the aging networks and increasing the number of available lines. If all of
this occurs, the number of mobile subscribers in Lebanon may easily double.
At -23.8% reduction, Lebanon had the lowest fixed line growth rate in the MENA region, with
subscriptions numbering 527,500 in 2008. Growth slowed considerably, from 11.67% in 2006
to 3.23% in 2007 and to a further disappointing -23.8% in 2008, there appears to be no
marked improvement over 2006 and 2007 figures when fixed line subscriptions had witnessed
positive growth. In September 2008, the Ministry of Telecommunications announced its plans
to install over 4,000 payphones across the country, in an effort to boost overall fixed line
usage and revenues from the payphone segment for government coffers (US$43 million in
2007).
Lebanon ranked sixth in the Arab world in terms of both computer and Internet penetration.
At 15% growth in Lebanons computer installed base over the past year was a decided
improvement over 2007s 10.64%, growth rate. By end 2007, the country added 87,960
computers to reach a total of 674,360. Computer penetration improved, albeit slightly, to
16.02% from 12.48% in 2007. Meanwhile, Internet users grew by 28% in 2008 to register
935,000 users from 845,000 in 2006. Penetration rose, as a result, to 19.89%. Lebanon only
launched broadband ADSL services in May 2007, with subscribers reaching 58,000 by mid2008. Growth has been slow, with service providers complaining that state-owned Ogero is
controlling the market, since it owns key infrastructure, such as fixed lines. Lebanons
Internet market is served by five Data Service Providers and 17 Internet Service Providers,
most of who provide dialup services only.
PALESTINE
COUNTRY ICT PROFILE PALESTINE
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Jawwal
290,010
348,968
341,330
350,442
420,000
874,000
1,090,400
1,471,000
1,744,600
2,022,163
437,005
566,592
821,800
1,021,481
1,314,406
Other operators
Internet Users
436,995
390,000
523,808
490,000
649,200
525,000
723,119
552,500
707,757e
596,700
170,000
185,000
191,000
199,900
210,993
(Palestine Cellular Communication)
Source: Madar Research, e = Estimate
56

Palestine Mobile Operator Market Share ,
2007
41%
59%
Palestine Mobile Operator Market Share , 2008
65%
35%
Jawwal
Other Opeators
Jawwal
Other Opeators
Despite the countrys small market and the many constraints under which it operates,
Palestine dropped to 16th place ending a 2 year 13th position on the 2008 Arab ICT Use Index
after achieving 7.04% growth in 2008. Like most developing MENA economies, Palestines ICT
growth was largely dependent on the countrys mobile phone sector, which was controlled,
along with fixed lines, data services and Internet, by the Palestine Telecommunications
Company (Paltel), a public shareholding company traded on the Palestinian and Abu Dhabi
stock exchanges.
Palestines mobile phone subscriptions grew by 15.91% compared to the better 18.60%
growth of 2007 to register 2,022,163 subscriptions by end 2008. Financial constraints and
growing poverty in the Palestinian Territories are largely to blame for the decelerated growth
of the market. Paltels wholly-owned subsidiary, the Palestine Cellular Communications
Company (Jawwal) competes with several Israeli mobile phone service providers that operate
illegally in the Palestinian Territories. Jawwal acquired 65% of the mobile phone subscription
market in 2008, up from 58.55% in 2007, with the companys subscriptions numbering
1,314,406 by year end. Jawwals 2008 subscriptions figures reflect a growth rate of 28.68% in
total subscriptions and a net addition of 292,925 mobile phone subscriptions by year end.
In February 2006, Palestinian President Mahmoud Abbas rushed through a law creating a
telecommunications regulatory authority. However, in September 2006, it was still Palestines
Ministry of Telecommunications and Information Technology that announced Kuwaits
Wataniya Telecom had won the tender for the countrys second mobile phone license. The
US$354.3 million license was awarded in March 2007 to the newly established Wataniya
Palestine Mobile Telecommunications Company, owned jointly by Wataniya Telecom (57%
share) and the Palestine Investment Fund (43%). The structure of ownership of Wataniya
Palestine is due to change at a later stage, with 30% being offered to public shareholders in an
Initial Public Offering (IPO), while the Palestine Investment Funds share will be reduced to
30% and Wataniya Telecoms share to 40%. Originally planned for January 2008, Wataniya
Palestines commercial launch has been delayed until late 2008, due to limitations imposed by
Israeli authorities on the allocation of frequencies.
Mobile penetration rose from 43.45% in 2007 to 48.01% in 2007, ranking Palestine in 14th
place in the MENA region on the indicator, and sixth in the Levant behind Iraq and Syria. The
57

penetration rate represents quite an accomplishment given the challenges faced by both
service providers and the general population in a war grieved country.
Palestine witnessed much slower growth in the fixed line sector, albeit improving, at 1.84% in
2007, down from 2.60% growth in 2007. Fixed line subscriptions, exclusively provided by
Paltel, numbered 420,000 by end 2008, growing at a CAGR of 5.3% over the period 2004 to
2008. This reflected in a fixed line penetration rate of 8.48%, slightly lower than 2007s
penetration rate of 8.73%.
The country had the lowest Internet user growth of all MENA economies in 2008 for the third
year in a row, at 8%, with numbers rising from 596,700 to 552,500 users by end 2008. Internet
penetration rose slightly 13.46% to 13.76%. Paltels subsidiary Internet Service Provider
Hadara (the outcome of a merger of four ISPs: Palnet, Palestine online, PIS and Interpal)
dominates the Internet access market in Palestine.
In addition to registering the slowest growth in Internet users in 2008, Palestine also recorded
the slowest growth in computer installed base, at 5.55%
SYRIA
COUNTRY ICT PROFILE SYRIA
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Syriatel
MTN Syria
2,660,000
2,903,000
3,300,000
3,450,000
3,633,400
1,947,700
3,199,100
4,755,541
6,451,104
7,789,563
1,077,183
870,517
1,733,600
1,465,500
2,518,541
2,237,000
3,342,104
3,109,000
4,250,563
3,539,000
Internet Users
700,000
1,300,000
1,750,000
2,400,000
3,432,000
540,000
680,000
860,000
1,100,000
1,430,000
Syria Mobile Operator Market Share , 2007
Syria Mobile Operator Market Share , 2008
48%
45%
55%
52%
SyriaTel
MTNSyria
SyriaTel
MTNSyria
58

Syrias registered 26.15% overall growth on the 2008 Arab ICT Index, its score rising to 0.82
from 0.65 in 2007. The country ranked in 14th place among the MENA economies on the
index, ahead of Iraq, Sudan and Yemen. In a trend mirrored in most of the countries in the
region, mobile phone sector was the main driver in Syrias growth on the index.
Syrias mobile phone subscriptions grew by a smaller amount of 20.75% by end 2008
compared to the 35.65% growth of 2007, to rise in number from 6,451,104 to 7,789,563
subscriptions, ranking the country 11th overall in mobile phone growth among Arab
countries. The market was shared almost equally by the countrys two mobile operators,
Syriatel, which has been privately owned by local investors since Orascom Telecom Holding
was forced out of the original partnership, and MTN (formerly Areeba). Areeba became part
of South Africas MTN Group in July 2007, some six months after its owner, Investcom,
announced the merger of its Sudanese and Yemeni operations with the group.
Syriatel registered 4,250,563 subscribers by end 2008, a 27.18% increase (down from 32.7%
growth in 2007), while MTN counted 3,539,000, a rise of 13.83% (down from 38.98% growth
in 2007), appropriating less than 13.35% of Syriatels market share not quite similarly to its
performance in 2007. By year end 2008, MTNs share of the mobile phone subscription
market in Syria has dropped to 45% from its 48% market share of 2007, with Syriatel holding
on to dominant 55% of the market. As a result of the rise in subscriptions, the countrys
mobile penetration rose to 39.2%, a significant improvement over the 33.48% achieved an
year earlier.
Both mobile phone operators commenced operations in February 2000 as one-year pilot
projects before being awarded 15-year Build-Operate-Transfer (BOT) licenses a year later. The
licenses were granted by the Syrian Telecommunications Establishment (STE), a government
body that is both de facto regulator and monopoly provider of all fixed-line, Internet and data
services, and require the companies to hand over a significant share (30% to 60%) of their
revenues to the regulator. In December 2007, STE is expected to start formal talks with both
Syriatel and MTN over converting their existing BOT licenses to full licenses. Under the terms
of their contracts, both companies are guaranteed a duopoly over the market for seven years
from the date of network launch. According to STE, the companies launched operations in
April 2001, while Syriatel and MTN claim they received official approval for the launch of their
networks in April 2002. In all likelihood, both companies are expected to retain their
exclusivity over the sector until 2010.
The government of Syria intends to auction a third mobile operating license in the country
before the end of the year 2009, or by Q1 2010 at the latest, but it is not expected to do so
before it converts Syriatel and MTNs BOT licenses into full licenses. The authorities are in
talks with international Internet providers and other countries in the region concerning a plan
to construct a fibre-optic submarine cable from the Red Sea to the Mediterranean. In
November 2007, the two companies rolled out 3G mobile phone services on a trial basis in
Damascus and Aleppo, followed by the commercial launch of their 3G nationwide networks in
Q3 2008.
State-owned incumbent fixed line service provider, STE, has been putting considerable effort
into improving fixed-line coverage and services. With US$1.50 billion investments planned for
the network between 2008 and 2013, the company is targeting the expansion of its capacity
by four million fixed lines, especially in underserved and remote areas of the country. Syrias
59

fixed line subscriptions rose to 3,633,400 by end 2008, at 5.05% growth from 3,450,000 of
2007. The sector grew at a CAGR of 8% over the period 2004 to 2008. Penetration rose to
18.28% by end of 2008 from 17.90% in 2007, ranking Syria in third place among MENA
economies on the fixed line penetration rate indicator, right behind the United Arab Emirates
and Bahrain.
Syrias total Internet users grew by 43% to register 3,432,000 users by end 2008. Internet
penetration rose, as a result to 17.26%, ranking the country in 10th place among Arab
countries on the indicator. Access to the public is provided through seven active Internet
Service Providers, including two STE wholly-owned subsidiaries. The deployment of new
broadband ADSL networks has been hampered by a delay in the issuance of a regulatory
framework for the sector, while uptake of existing capacity has been greatly limited by high
prices and the lack of availability in many geographic locations. In an effort to expand limited
broadband capacity, incumbent STE awarded a contract to Chinas Huawei Technologies to
deploy 33,000 new ADSL lines. With broadband subscribers estimated at 17,000 at end 2007,
STEs expansion plans are expected to boost ADSL subscriptions considerably.
The increase in Syrias computer installed base was far stronger, at 30% in 2008, to register
1,430,000 computers. The growth is driven in part by an initiative launched by Syrias Ministry
of Communications and Technology in mid-2006, offering one million computers for sale on
monthly installments charged to subscribers fixed line bills. However, penetration was at
7.19%, ranking the country in 14th place overall among Arab countries on the indicator.
60

IC T P E N E T R A T I O N N O R T H A F R I C A - 2008
ICT PENETRATION
RANK
COUNTRY
1
2
3
4
Libya
Tunisia
Algeria
Morocco
TOTAL
FIXED LINE
IN
NORTH AFRICA 2008
PENETRATION
MOBILE PHONE
PENETRATION
14.31%
11.94%
10.65%
9.54%
10.67%
114.05%
81.06%
78.05%
72.79%
79.2%
INTERNET
PENETRATION
COMPUTER
PENETRATION
ICT USE
INDEX
15.20%
19.92%
11.45%
13.40%
13.54%
11.48%
8.70%
5.78%
6.07%
6.69%
1.55
1.22
1.06
1.02
1.10
North Africa has some of the most developed ICT markets on the continent. Despite having an
old style monopolistic approach to telecommunication, Libya has once again made great
inroads on the ICT Use Index in 2008, with an overall index score of 1.55 bolstered mainly by
the countrys phenomenal growth in the mobile phone and fixed line subscriptions markets.
Based on the market potentials of this country Etisalat and Turkcell had recently placed a bid
with Libyan General Telecommunications Authority to become selected as the third mobile
service provider. In addition to leading the region in mobile phone penetration, Libya also
topped the index in computer penetration at well, with an overall computer penetration rate
of 11.48%. Meanwhile, Tunisia, with an index score of 1.22 ranked second in the region. The
country led the North Africa region in terms of Internet penetration (19.92%).
Overall, North Africa scored 1.10 from the 1.00 of 2007 on the index, with 79.2% mobile
phone penetration. Internet penetration registered 13.54%, while fixed line penetration
registered below the 10.67%. The regions computer penetration rate, on the other hand,
was a low 6.69%.
61

ALGERIA
COUNTRY ICT PROFILE ALGERIA
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Djezzy
Mobilis
Nedjma
Internet Users
2,486,720
2,572,000
2,841,297
3,068,409
3,687,603
4,882,414
13,661,355
20,997,954
25,500,000
27,031,474
3,418,367
1,176,485
287,562
1,500,000
590,000
7,276,834
4,907,960
1,476,561
1,850,000
825,000
10,530,826
7,476,104
2,991,024
2,365,000
1,110,000
12,000,000
9,500,000
4,000,000
3,050,000
1,482,000
14,108,859
7,703,689
5,218,926
3,965,000
2,000,700
Algeria Mobile Operator Market Share , 2007
Algeria Mobile Operator Market Share , 2008
37%
28%
16%
47%
Djezzy
Mobilis
Nedjma
19%
53%
Djezzy
Mobilis
Nedjma
Algerias mobile phone subscriptions grew only 6.01% in 2008, to register 27,031,474
subscriptions overall in 2008, the pace of growth was slowing down from 53.70% growth in
2006, 21.44% in 2007 and now the 6.01% growth in 2008. Mobile phone subscriptions growth
reached at 53.4% CAGR over the period 2004 2008, from 4,882,414 subscriptions in 2004.
The lower growth rate may be attributed to the fact that majority of Algerias mobile phone
subscriptions are prepaid compared to post paid. Moreover, subscribers need to have bank
accounts and provide deposits or other guarantees, in order to set up working post-paid
contracts. According to the countrys regulator, the Autorit de Rgulation de la Poste et des
Tlcommunications (ARPT), 97.01% of all subscriptions were prepaid subscriptions at end
2007, a share that has remained consistent over the past few years (97.06% in 2006 and
96.80% in 2005).
Even thought Algeria lags behind other countries of the Arab world in the area of new
information and communication technologies such as Internet and broadband, but mobile
services have made remarkable progress ever since the sector had been opened up to
competition in 2002. The authorities are aware of this gap the country has when compared to
62

other economies and has created an NICT (new information and communication technologies)
development program called e-Algeria 2013. There are three operators in Algerias mobile
marketplace, making it the most competitive in North Africa. Mobilis, the countrys oldest
mobile operator and a subsidiary of state-owned Algerie Telecom had lost market share
considerably to its dominant regional competitors. ATM Mobilis faced a negative growth in
2008 with their total mobile subscribers base decreasing from 9,500,000 to 7,703,689. This
decrease in total subscriber base could be attributed to the fact that while Algerie Telecom
maintained a high connection fees and fixed monthly subscriptions, their competitors lowered
the entry barriers and introduced easier prepaid services to subscribers. ATM Mobilis had lost
9% of its market share which was gained by their competitors, with a subscribers reduction of
-18.91%. Launched in early 2002, the largest operator in the country, Djezzy, is majorityowned by Egypts Orascom Telecom (49.60%). With 14,108,859 subscriptions in 2008,
Djezzys market share rose to 53% in 2008 from the 47% in 2007. The countrys third and
newest mobile phone service provider, Nedjma, picked up on the lost shares of Mobilis, to
climb to 19% share from 16% in 2007. Nedjma, launched in 2004, registered 5,218,926
subscriptions by year end 2008, growing at cumulative rate of 106.4% from 287,562 in 2004.
Nedjma is majority owned by Kuwaits Wataniya Telecom (71.00%). The total turnover for the
three mobile operators in 2008 was DZD 200 billion.
Market size and share as expected, has changed considerably in 2008, following a decision by
the ARPT to oblige mobile phone service providers to register anonymous-identity
subscriptions or disconnect them. The proliferation of anonymous subscriptions has given
rise to a black market that the ARPT is unable to regulate. Furthermore, anonymous
subscriptions pose a security risk in the countrys fight against terrorism, where several
bombings were traced to detonations by anonymous-subscription mobile phones. In early
2008, some nine million subscriptions were deemed anonymous, but by June the number had
been reduced to three million.
Algeria maintained its position, 10th on the Arab ICT index, and was also placed at the tenth
spot in terms of mobile penetration, despite insignificant growth. The countrys mobile phone
penetration rate dropped slightly in 2008 to 78.05% down form the 81.4% in 2007. In
absolute figures, Algerias mobile phone subscriptions ranked it first in North Africa, over 27
million subscribers ahead of second-place Morocco, and third in the MENA region behind
Egypt and Saudi Arabia.
Algerie Telecom dominated the fixed line market in spite of the short lived competition from
the Egyptian backed Consortium algerien des telecommunication (Lancom) which focused on
wireless local loop systems. Lancom had recently ceased all its operation as it did not have
networks of its own and had to depend on the networks provided by the dominant public
operator. One of the prime reasons regarded by analysts for the poor development of fixed
line telephone services in Algeria lies in the lack of competition and the persistent monopoly
held by the public operator which ironically cant meet the public demands. However,
Algerias fixed line sector witnessed 20.18% growth in 2008, with total subscriptions rising
from 3,068,409 to 3,687,603 by end 2008. Of the 3,687,603 around 697,603 are wireless local
loops (wll). The countrys fixed line market has grown at a compound annual growth rate
(CAGR) of 10.4% over the period from 2004 to 2008.
Incumbent operator, Algerie Telecom, accounts for the majority of subscriptions, with a
98.54% market share. In 2006, the sector was liberalized with the launch of a second fixed line
63

provider - Consortium Algrien des Tlcommunications (CAT), branded Lacom. CAT, a joint
venture of Telecom Egypt and Orascom Telecom, inaugurated its new Wireless Local Loop
(WLL) network based on CDMA technology in Algiers in February 2006 and announced
ambitious plans to cover the rest of the country before long. However, by the end of its first
year in operation, the new entrant had signed up only 44,619 subscribers. Its market share
dropped in 2007 to 1.46% from 1.57% in 2006, the company adding only 297 subscriptions by
year end 2007.
By mid-2007, both Orascom Telecom and Egypt Telecom indicated their interest in exiting the
Algerian market, their joint venture having sustained heavy losses and nearing bankruptcy
(Telecom Egypts financial reports indicate the company incurred losses greater than its
original investment). Both companies accused Algerias telecommunications regulatory
authority of favoring state-owned Algerie Telecom. In March 2008, Orascom Telecom pulled
out of the venture, selling its 50% share to Telecom Egypt.
Meanwhile, Algerie Telecom has been earmarked for privatization since 2006 but the process
has been delayed repeatedly. In October 2008, its CEO announced that the privatization of the
Algerie Telecom would be put on hold for another two to three years, to allow it to become
competitive at the regional and international level ahead of the sale of 35% to 51% of the
companys shares in an Initial Public Offering (IPO). Companies that have indicated an interest
in the stake include Emirates Telecommunications Corporation, France Telecom, Qatars Qtel,
Portugal Telecom and Kuwaits Zain.
Algerias overall fixed line penetration rose to 10.65% up from the 9.06% in 2007, ranking the
country in 11th place in the MENA region for 2008. Algeria ranked third in North Africa
behind Tunisia in terms of fixed line penetration, and slightly ahead of Morocco in fourth
place.
Algeria made dramatic gains in the number of Internet users, registering the highest growth in
the MENA region for 2007. Internet users rose 30% from 3,050,000 in 2007 to 3,965,000 users
by end 2008. The latter figure represents a CAGR of 27.51% over the period 2004 to 2008.
Some 76 Internet Service Providers provide Internet access to the Algerian market, including
two Algerie Telecom subsidiary Djaweb and EEPAD who provide ADSL access. In a move
that is expected to further boost Internet users in the country, Algerie Telecom halved its
Internet access prices in May 2008. However, the move is also expected to adversely affect
competition in the sector, as private ISPs in the country cannot cope with state-owned
providers price cuts.
Algerias Internet market is also served by a large number of Internet cafs, numbering 6,200
at year end 2007. Internet penetration was 11.45% by the end of 2008, placing the countrys
rank on the indicator to 15th place in the MENA region.
Growth in computer installed base was also reasonable ranking seventh in the MENA region
at 35%. However, the addition of 372,000 computers did little to increase penetration,
which registered a low 5.78% ranking the country in 13th place among Arab countries, ahead
of only Egypt, Iraq, Sudan and Yemen. Algerias overall computer installed base registered
2,000,700 computers by end 2008.
64

LIBYA
COUNTRY ICT PROFILE LIBYA
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Libyana
Al-Madar
485,000
495,000
506,608
517,750
910,000e
420,000
1,690,000
3,383,632
5,105,073
7,250,000
245,000
175,000
1,455,000
235,000
3,132,379
251,253
4,500,000
605,073
6,000,000
1,250,000
Internet Users
260,000
612,000
700,000
805,000
966,000
220,000
340,000
410,000
517,500
729,675
Libya Mobile Operator Market Share , 2007
Libya Mobile Operator Market Share , 2008
88%
83%
17%
12%
Libyana
Al-Madar
Libyana
Al-Madar
Libya led its North Africa counterparts on the 2007 Arab ICT Use Index, with a score of 1.55,
and sixth overall among MENA economies. As in 2006, Libyas strongest performance was in
mobile phone subscriptions, which increased in number from 5,105,073 to 7,250,000 in 2008,
at a strong growth rate of 42.02% - the fourth highest growth rate in the MENA region behind
Yemen and Iraq. Furthermore, Libyas mobile phone subscriptions grew at a CAGR of 103.8%
over the period 2004 to 2008.
The Libyan telecommunication network is the core of the ICT sector for the country. The
telecommunication network however is poor and has suffered significantly from lack of
competition and essential experience. Consumers complain of low coverage, poor
connections and dropped calls at peak times. The impressive rise in mobile phone
penetration from 87.72% by end 2007 to 113.3% in 2008, driven largely by Libyana , one of
the countrys two-state controlled mobile phone service providers. Libyana, which entered
the market in September 2004, added 1,500,000 new mobile phone subscriptions to its
subscriber base in 2008 to a total of 6,000,000 subscriptions. However, it lost market share
due to phenomenal growth in its competitors subscriber base for the past two years. AlMadar Al-Jadeed (which rebranded from Al-Madar Telephone Company in 2007) registered
65

140.82% growth in mobile phone subscriptions, in 2007 and 106.59% in 2008 gaining
considerable market share from 12% share in 2007 to 17% in 2008.
The mobile phone, fixed line and data services sectors have traditionally been controlled by
one monopoly player, state-owned General Posts and Telecommunications Company (GPTC),
headed by Mohammed Gaddafi, the eldest son of the Libyan leader. Telecommunications
infrastructure development is the responsibility of this state-owned GPTC. GPTC was
restructured in September 2007 into one holding company, the Libya Post,
Telecommunication and Information Technology Company (LPTIC). Mobile phone penetration
was quite high in 2008 reaching 114.05%, placing Libya 5th among the Arab countries.
In early 2007, the country announced that the privatization of Libyas mobile phone sector
was imminent. The Libyan Economic and Social Development Fund, a public investment
vehicle in charge of domestic investment, proceeded to partially privatize Al-Madar Al-Jadeed
and Libyana by allocating a 30% share of the two companies to the LPTIC, while a further 25%
were allocated to impoverished Libyan families in the form of equities. The remainder of the
shares was retained by the fund. A second phase of privatization is expected in the sector but
no specific date has been set. In January 2008, the Chinese firm ZTE announced a deal with
LTT to build a commercial WiMAX network that will cover eight major cities in Libya, including
the capital Tripoli.
GPTC has expanded landline coverage to many parts of Libya, although the quality of its
infrastructure and service as mentioned previously needs substantial improvement. Libyas
fixed line subscriptions rose to 75.76% in 2008 to reach an estimated 910,000 subscriptions
up from 517,750 in 2007. The country has sustained a low growth rate in the sector for
several years, but as expected witnessed a strong boost in 2008 and 2009, mainly due to
network expansions and reductions in pricing. In September 2008, Mohammed Gaddafi
announced that the annual fee for fixed line subscriptions would be reduced to under US$15,
while fixed line to fixed line calls would be free of charge. Furthermore, network capacity was
increased by 800,000 lines nationwide in early 2008, based on CDMA technology. Fixed line
penetration gained dramatically from 8.90% in 2007 to 14.31% in 2008. The fixed line
penetration rate placed Libya on 8th place in the MENA region, ahead of Tunisia, Morocco
and Algeria with strong potential to grow given the countrys comparative wealth.
In addition to managing the countrys fixed line sector, LPTICs monopoly effectively extends
to Internet services for, although there are some seven licensed ISPs in the country,
international connectivity is in the hands of the state-owned provider, the Libya Telecom and
Technology Company (LTT). The latter dominates the Internet access market, which
numbered 966,000 users in 2008. Internet users rose by a slow 20% in 2008, from 805,000
users, with Internet penetration rising to 15.20% by end 2008. While low, the penetration
rate ranked Libya in 12th place in the MENA region on the indicator, and second in the North
Africa region behind Tunisia.
Libyas Internet users are expected to get a strong boost in 2009, following the deployment of
a commercial WiMAX network in a deal signed in January 2008 between LTT and Chinese
telecommunications company, ZTE Corp. The latters network will cover eight major cities in
the country, including the capital Tripoli and is expected to enter into service by end 2008. In
May, LTT followed up the deal with a second contract awarded to Alcatel-Lucent for another
WiMAX network. The service is expected to be launched in early 2009 for an estimated
66

300,000 users and will support Voice over IP (VoIP) and high-speed Internet access, as well as
complement LTTs existing fixed base broadband services.
Meanwhile, Libya registered 41% growth in its computer installed base, to list 729,675
computers up from 517,500 in 2007. This boosted penetration to 11.48%, slightly higher than
the 8.89% attained in 2007. Libya maintained its position in 9th place among MENA countries
in terms of penetration for the forth year in a row.
MOROCCO
COUNTRY ICT PROFILE MOROCCO
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Maroc Telecom
Medi Telecom
Wana
1,308,500
1,341,156
1,266,119
2,393,767
2,991,185
9,337,000
12,393,000
16,005,000
20,029,000
22,816,000
6,306,000
3,031,000
-
8,237,000
4,156,000
-
10,707,000
5,298,000
-
13,327,000
6,702,000
-
14,456,000
7,925,000
435,000
Internet Users
1,600,000
2,500,000
2,950,000
3,500,000
4,200,000
1,240,000
1,365,000
1,510,000
1,700,000
1,904,000
Morocco Mobile Operator Market Share , 2007
Morocco Mobile Operator Market Share , 2008
35%
67%
63%
33%
2%
Maroc Telecom
Medi Telecom
Maroc Telecom
Medi Telecom
Wana
The World Information Technology Report (a joint report of the ITU and UNCTAD) in 2007 had
applauded Moroccos efforts and the progress the country had made in the field of new
information and communication technology (ICT) development. Liberalization of the telecom
sector along with the added competition and providing viable laws and opportunities by the
authorities for FDI (foreign direct investments) had helped Moroccos rapid development of
this sector. Morocco this year gained 0.14 points on the 2008 Arab ICT Use Index to a score
of 1.02 from 0.88 in 2007, but maintained its rank in 11th place overall in the MENA region for
a second year in a row. The country registered 22,816,000 mobile phone subscriptions by end
67

2008, with net additions numbering 2,787,000 subscriptions. Growth in the sector slowed
down to 13.91% in 2008, compared to 25.14% growth in 2007. Mobile phone subscriptions
grew at a CAGR of 25% over the period 2004 to 2008. The introduction of better customer
loyalty plans, the downward trend in prices and the enhancement of service offerings over
the last two years have further boosted mobile telephony. Moroccos resulting mobile phone
penetration has risen to a rate of 72.8% (63.81% in 2007) ranked it last in the North Africa
region on the indicator.
The mobile telephony segment comprises three operators: Maroc Telecom (63% of the
market), Mditel (35%) and, since April 2007, Wana (2%). Despite a slight drop in market
share (from 67% to 63% in 2008) incumbent Maroc Telecom, which is 51%-owned by Vivendi
Universal and listed on the Casablanca and Paris stock exchanges, continued to be the
countrys dominant mobile operator, with total subscribers rising from 13,327,000 to
14,456,000 at end 2008. Taking 35% of the market was its only competitor, Medi Telecom,
which saw subscriptions grow by 18.25%, from 6,702,000 to 7,925,000. Medi Telecom, whose
primary shareholders are Telefonica Moviles and Portugal Telecom, purchased its GSM license
in 1999 for US$1.1 billion and has invested over twice that sum in its mobile network since its
launch. In July 2006, both mobile operators and Wana (formerly Maroc Connect), an Internet
Service Provider, were awarded 3G licenses. The number of subscribers for Wana reached
435,000 in 2008.
Morocco has a higher number of prepaid than postpaid users. From the 22,816,000 mobile
subscribers, 21,894,000 were prepaid or about 95.96% of all Moroccos mobile phone
subscriptions were prepaid subscriptions in 2008, lower from 96.01% in 2007. The remaining
4% of the subscribers were postpaid.
100%
459,000
800,000
690,000
612,000
922,000
90%
80%
70%
60%
50%
40%
30%
2004
2005
2006
Prepaid
2007
21,894,000
0%
19,229,000
10%
15,315,000
11,781,000
8,878,000
20%
2008
postpaid
In 2006, Morocco had the highest mobile-to-fixed line ratio in the Arab world at 12.64 mobile
subscriptions for every fixed line subscription, indicating a weak fixed line sector. However, in
2008, the sector had improved dramatically, resulting in a drop to ninth place in the mobileto-fixed line ratio, with 6.19 mobile phone subscriptions for every fixed line.
68

In the fixed-line telephony segment, new-generation telecommunications licenses have been
granted to two operators, Mditel and Wana. Morocco registered the third highest growth in
the MENA region in fixed line subscriptions, even though at a lower 24.96% in 2008,
compared to the highly explosive growth of 89.06% in 2007. Fixed line subscriptions rose to
2,991,185 up from 2,393,767 in 2007. Of these, 1,681,819 were restricted mobility fixed line
subscriptions. Restricted mobility fixed line services were introduced to the Moroccan market
in Q2 2007 and are a major driver for the sectors strong growth since 2007. The majority of
fixed line subscriptions are residential, accounting for 87% of total subscriptions at end 2008.
87%
86%
14%
Residential Lines
Business Lines
13%
Residential Lines
Business Lines
Meanwhile, the total number of public payphones dropped to 174,890 from 175,645 in 2007.
Maroc Telecom held the greater share in the public payphone market, accounting for 91.53%
of total payphones at end 2008, while Medi Telecom accounted for 8.47%. Total fixed-line
penetration for 2008 rose to 9.54% from 7.63% in 2007, ranking Morocco in 12th place among
Arab countries on this indicator, way up from 17th in 2006.
Although Medi Telecom and Wana were both awarded new fixed line licenses in 2005, Maroc
Telecom remained, for all intents and purposes, the countrys sole fixed-line operator during
2006. Medi Telecom announced the launch of residential and business services over a WiMAX
fixed wireless and fiber optic network in June of 2006, but concentrated on marketing
business and data services, particularly international traffic between Morocco and France. By
end 2007, Medi Telecom had registered 0nly 4,731 fixed line subscriptions. Meanwhile,
Wana, owned by Groupe ONA (one of the countrys largest conglomerates) and the Socit
Nationale dInvestissement, launched CDMA fixed line and Internet services in February 2007
under the brand name Bayn.
While Maroc Telecom continued to dominate the fixed line sector in 2007, its market share
fell in 2008, due to strong competition from Wana. By end of 2008, the latter accounted for
56.35% of the fixed line market in Morocco, while Maroc Telecom accounted for 43.42% and
Medi Telecom for a low 0.24%.
Moroccos Internet users grew by 20% in 2008, to 4,200,000 users, from 3,500,000 in 2007.
Internet penetration rose to 13.40%, ranking the country second last in the North Africa
region on the indicator and 14th in the MENA region, ahead of Algeria, Iraq, Sudan and
Yemen. According to the ANRT, there were 757,453 Internet subscribers in Morocco by end
2008, up from 526,080 in 2007. Broadband ADSL connections accounted for 63.74% of total
subscriptions, down from 90.60% in 2007. The ADSL access mode lost market share to
wireless Internet access provided by Wanas Bayn, which accounted for 25.08% of the total
subscriber market.
69

Meanwhile, growth in the countrys computer installed base rose to 12% by end 2008,
bringing the total number of computers up to 1,904,000 from 1,700,000 in 2007. At 6.07%
penetration, Morocco ranked in 12th place in the MENA region on the indicator, and third in
North Africa, ahead of Algeria.
TUNISIA
COUNTRY ICT PROFILE TUNISIA
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Tunisie Telecom
Tunisiana
1,204,000
1,257,000
1,268,000
1,273,000
1, 239,000
3,735,695
5,680,726
7,339,047
7,842,619
8,411,630
2,688,179
1,047,516
3,423,064
2,257,662
4,269,733
3,069,314
4,190,806
3,651,813
4,256,573
4,155,057
Internet Users
835,000
953,800
1,294,910
1,722,190
2,066,628
472,000
568,000
660,000
767,500
902,521
Tunisia Mobile Operator Market Share , 2007
Tunisia Mobile Operator Market Share , 2008
49%
47%
53%
51%
Tunisie Telecom
Tunisiana
Tunisie Telecom
Tunisiana
In 2008 Tunisia was ranked 36th by the World Economic Forum above Bahrain and below
Kuwait. It came fifth among the Middle Eastern countries, after Kuwait. Tunisia slipped from
the highest ranking North African country on the 2006 Arab ICT Use Index to second place
among its regional counterparts, with Libya taking the lead. The country scored 1.22 on the
index, up from 1.11 in 2007. Tunisia witnessed the slowest growth in the mobile phone
subscriptions sector in the MENA region (above Algeria that witnessed negative growth) in
2008, growing at a low 7.26%, (2.42% higher than 2007) with only 569,011 net additions in
mobile phone subscriptions by year end. Mobile phone subscriptions grew at a CAGR of
22.5% over the period 2004 to 2008.
Tunisia Telecom enjoys total monopoly on the fixed line segment. Tunisia mobile sector
however is a duopoly shared by incumbent Socit Nationale des Tlcommunications
70

(Tunisie Telecom) and Tunisiana. The two mobile phone operators Tunisie Telecom (which has
51% market share) and Tunisiana (49% market share) share some cell towers, but the basic
infrastructure is still owned by Tunisia Telecom. Tunisiana entered the market in 2002. In a
move that signaled the start of the privatization of state-owned Tunisie Telecom, TECOM
Investments and Dubai Investment Group, both members of Dubai Holding, jointly purchased
a 35% stake in Tunisie Telecom in March 2006 from the Tunisian government for US$2.25
billion. Tunisiana, on the other hand, is jointly owned by Orascom Telecom (which has a 50%
interest in Tunisiana through two wholly owned subsidiaries) and Wataniya Telecom. The two
local operators are expected to maintain market exclusivity until 2010, as indicated by
Tunisias regulatory authority, LInstance Nationale des Tlcommunications.
Total mobile subscriptions numbered 8,411,630 in 2008 and 7,842,619 subscriptions in 2007.
Tunisie Telecom remained the dominant operator with 51%, but lost considerable market
share to its regional competitor. Tunisiana is fast gaining ground, its market share rising from
46.56% in 2007 to 49% in 2008. Stagnant growth in the sector reflected on the countrys
mobile penetration rate, which rose to only 81.06% from 74.76%, ranking the country in 9th
place in the MENA region.
Slow growth was also endemic to the countrys fixed line sector. Fixed line subscriptions fell
by -2.96% which reflected in a drop in penetration rate from 12.14% to 11.94% in 2008. Most
of the rural areas in Tunisia still relies on wireless local loop (wll) for communication. Tunisie
Telecom, the exclusive provider of fixed line services in the country, had registered 1,239,000
fixed line subscriptions by end 2007 which dropped to 1,239,000 in 2008, a decrease for the
year numbering 34,000 subscriptions. Fixed line monopoly and the lack of competition has
resulted in slow growth as the prices remain high for the end user. This is also reflected in
fixed line subscriptions growing at a low CAGR of 0.7% over the period 2004 to 2008.
Tunisias Internet user and computer installed base markets fared better than its fixed line
sector in 2008, with Internet users rising by 20% to register 2,066,628 from 1,722,190 users in
2007. The sector is serviced by 11 Internet Service Providers, six of which are public sector
providers including the Agence Tunisienne d'Internet (ATI) run by the Ministry of
Communication Technologies. Tunisias Internet penetration rose to 19.92% by end 2008,
ranking the country in first place among its North Africa counterparts on the indicator and in
8th place overall in the MENA region.
Finally, 17.59% growth in computer installed base increased the number of computers from
767,500 in 2007 to 902,521 in 2008. The rise can be attributed to the continued success of the
Family Computer initiative launched by the Ministry of Communication Technologies, which is
working to introduce one million computers in Tunisian households by 2009. Computer
penetration increased to 8.70% by end 2008, the third highest penetration rate in North
Africa behind Libya.
71

OTHER ARAB COUNTRIES
ICT PENETRATION
RANK
1
2
COUNTRY
FIXED LINE
IN
LEVANT 2008
PENETRATION
MOBILE PHONE
PENETRATION
5.75%
0.85%
3.30%
27.35%
26.06%
26.71%
Yemen
Sudan
TOTAL
INTERNET
PENETRATION
COMPUTER
PENETRATION
ICT USE
INDEX
6.76%
8.32%
7.54%
2.55%
3.09%
2.82%
0.41
0.4
0.41
Despite Yemens rank in 17th place on the overall ICT Use Index, it was the only Arab country
to witness strong growth in both mobile and fixed line subscribers. Its score on the 2008 index
rose to 0.41, while Sudan scored 0.40. The latters main advantage over Sudan was its fixed
line penetration, at 5.75% to Sudans 0.85%. However, overall, Sudan achieved low
penetration rates on all other indicators, even thought there are no major challenges facing
the telecommunication infrastructure development in Sudan. The low penetration rates could
be deemed to happen from the limited demand for services other than telephones and
disposable income available for registering with other services, relegating the country to last
place on the ICT Use Index.
SUDAN
COUNTRY ICT PROFILE SUD AN
INDICATOR
2004
2005
2006
2007
2008

Mobile Phone
Subscriptions
Sudani (Sudatel)
Zain- Sudan
MTN Sudan
1,029,000
570,000
499,000
345,200
356,500
1,050,000
2,230,500
4,820,176
9,860,474
11,437,000
1,050,000
-
1,962,000
268,500
1,000,176
2,754,000
1,066,000
3,887,474
3,883,000
2,090,000
3,600,000
5,190,000
2,647,000
Internet Users
650,000
1,350,000
1,750,000
2,450,000
3,479,000
630,000
770,000
905,000
1,080,000
1,292,562
72

Sudan Mobile Operator Market Share , 2007
Sudan Mobile Operator Market Share , 2008

46%
39%
21%
23%
31%
40%
Sudani
Zain Sudan
MTN Sudan
Sudani
Zain Sudan
MTN Sudan
According to certain secondary references, over 80% of Sudan has telecom service availability,
covering all major urban and rural settlements. Three companies provide mobile services in
Sudan namely Sudani (with 31% market share), Zain Sudan (with 46% market share) and MTN
Sudan (with 23% market share). Sudans public operator Sudatel provides its mobile service
through a separate sister company called Sudani. Sudan registered the lowest score on the
2008 Arab ICT Use Index, having a growth of mere 17.65%. Mobile phone subscriptions in the
country grew only by a mere 15.9% in 2008 compared to the triple digit growth of 104.57%
in 2007, which then was the only instance of its kind among the MENA economies. The
decline in Sudatels subscription at, -7.39% in 2008 (from 288.68% in 2007), was a major
driver for this decline in growth compared to its growth rate for previous years. The
companies mobile phone subscriptions fell from 3,887,474 in 2007 t o 3,600,000 in 2008.
Sudatels regional market share also fell to 31%, to give way 9% of the market to its
competitors in 2008. The company was established by incumbent fixed line operator, Sudatel,
following the sale of the latters interest in Mobitel to Kuwaits Zain. A CDMA technologybased voice and data service, Sudani was licensed by the countrys regulatory authority, the
National Telecommunications Corporation, at a cost of US$230 million and began limited
operations in April 2006.
In February 2006, Kuwait-based Zain, which already owned 39% of Mobitel, purchased the
companys outstanding shares from the Sudanese government for US$1.3 billion, taking
ownership in the countrys second mobile phone operator to 100%. Mobitel was rebranded as
Zain in September 2007. The companys mobile phone subscriptions grew by33.66% in 2008,
from 3,883,000 to 5,190,000. It also accumulated substantial market share from 39% in 2007
to 46% in 2008. The increase in Zain market share has propelled Zain to become the market
leader for mobile subscription in the region, less than two years after it began operating in the
Sudanese market.
Meanwhile, Sudans third mobile phone network, MTN Sudan, was originally branded Areeba
and established on the basis of a 15-year license awarded to Bashair Telecom Company,
which was partly owned by the Lebanese company, Investcom. In 2006, Investcom bought out
Bashair Telecom only to be itself purchased by the South African telecommunications
provider, MTN Group, in a complex series of acquisitions and mergers finalized at the end of
the year. By end 2008, MTN Sudans mobile phone subscriptions had risen to 2,647,000 from
73

2,090,000 at end 2008. The network registered the second-fastest growth rate among
Sudanese mobile phone service providers in mobile phone subscriptions, at 26.65%
MTN Sudan and Zain have exclusivity over GSM-based networks until 2011, but the country is
reported to be interested in awarding a second CDMA-based license. The United Arab
Emirates Canar Telecom has been involved in long-standing negotiations with the countrys
regulatory authority for a fourth mobile phone license. Additionally, there is one small
operator providing services in the semi-autonomous South Sudan region. Gemtel, however,
uses Ugandas national dialing code, despite being a Sudan-based company.
Total mobile phone subscriptions in the country numbered 11,437,000 at end 2008, reflecting
a CAGR of 81.7% over the period 2004 to 2008. As a result of all of this activity, Sudans
mobile penetration rose from 23.65% to 27.4% by end 2008. Although at the bottom of the
list among Arab countries the growth had pushed the country up in rank from last place on
the Arab ICT Use Index in 2007 to 17th place in 2008, outranking Yemen on the indicator.
The countrys fixed line sector is served by two fixed line service providers Sudatel and
Canar Telecom. The latter began operations in February 2006, and is majority owned by the
United Arab Emirates Etisalat (the company raised its stake in Canar Telecom from 37% to
82% in late 2007). Canar Telecom provides voice, data and wireless broadband Internet based
on next-generation network (NGN) and CDMA technologies. By end 2008, the total number of
subscriptions in the country was up to 356,500. The figure reflects a significant growth rate of
3.27% from 345,200 fixed line subscriptions at end 2007. Despite the growth in subscriptions,
Sudans fixed line penetration registered a low 0.85% in 2008, ranking the country last among
the Arab countries on the indicator.
By end 2007, the total number of Internet users in Sudan was 3,479,000 an increase of 42%
over the countrys estimated 2,450,000 users a year earlier. This resulted in a rise in Internet
penetration to 8.32% from 5.88% in 2007, outranking only Yemen on the indicator. The
countrys computer installed base rose to 19.68% in 2008 from 1,080,000 computers to
1,292,562. Computer penetration registered 3.09% at end 2008, ranking Sudan in 17th place
on the indicator among MENA economies.
74

YEMEN
COUNTRY ICT PROFILE YEMEN
INDICATOR
2004
2005
2006
2007
2008
750,000
901,400
968,328
1,021,988
1,337,122
Mobile Phone
Subscriptions
MTN Yemen
Yemen Mobile
Sabafon
Y-Telecom
Internet Users
1,084,739
2,132,900
3,022,629
4,107,000
6,059,000
441,239
55,000
588,500
_
210,000
195,000
824,846
310,000
998,054
_
750,000
290,000
1,161,000
800,000
1,061,629
_
880,000
360,000
1,507,000
1,400,000
1,200,000
_
1,122,000
448,800
1,859,000
1,900,000
2,000,000
300,000
1,570,800
592,551
Yemen Mobile Operator Market Share , 2007
Yemen Mobile Operator Market Share , 2008

33.0%
34%
29%
31.4%
5.0%
30.7%
37%
MTN Yemen
Yemen Mobile
Sabafon
MTN Yemen
Yemen Mobile
Sabafon
Y-Telecom
Yemen bottomed out on the 2008 Arab ICT Use Index on three out of the four indicators,
namely mobile phone, Internet and computer penetration, rising two places above last place
on only fixed line penetration to rank in 16th place. The country score on the index rose by
36.6%, but the growth did little to improve Yemens rank. However, in terms of fixed line
growth, the country fared well; Yemen had the second highest growth rate in the region with
30.84% growth.
Mobile phone subscriptions rose 47.53% to register 6,059,000 subscriptions by end 2008,
from 4,107,000 subscriptions. The countrys growth rate ranked it 2nd among MENA
economies in terms of growth of mobile phone subscriptions. MTN (formerly Spacetel),
Yemens largest operator, lost its market share, and remained one of the dominant providers
with 1,859,000 subscriptions (30.7% in 2008 form 37% market share in 2007). Sabafon
displaced Yemen Mobile as the countrys largest mobile phone provider in terms of
subscriptions, its market share rising from 29% in 2007 to 33% in 2008. The fast-growing
Sabafon registered 2 million subscriptions by end 2008, at a growth rate of 66.67% from
75

1,200,000 in 2007. Yemen Mobile, meanwhile, lost considerable market share, from 34% to
31.4% in 2008. Net additions to Yemen Mobiles subscription base registered about 500,000
subscriptions during the year, reflecting a slow growth rate of 35.71%. By end 2008, Yemens
mobile phone penetration rose to 26.1% from 18.35%.
Notably, Sabafon and MTN Yemens networks were launched in 2001, with Yemen Mobile
entering the market in 2004. In an important development in the Yemeni mobile phone
sector, Bahrains Batelco purchased a 20% interest in April 2007, worth US$258 million, in
Sabafon directly from Al Ahmar Group, which remained the single largest shareholder in the
local and regional consortium that owns the operator; Batelco has indicated that it will
exercise an option to increase its share in the company to 26% by end 2008.
Originally expected to enter the market in 2006, a fourth mobile phone operator the United
Yemeni Telecommunications Services Company (Y-telecom) finally launched commercial
services in January 2008. After winning its license through competitive bidding in 2005, Unitel,
then a Chinese/Yemeni venture, apparently experienced difficulty in gathering the capital
needed to pay the US$149 million license fee and develop the network. In March 2006, the
Yemeni authorities invited the second-highest bidder, Omantel, to resume license
negotiations, but Omantel withdrew and Unitel succeeded in attracting the interest of Saudi
Arabias House of Integrated Technology and Systems (HITS). The newly-named HITS-Unitel,
75%-owned by Al-Dar Telecommunications, sold a 10% interest in the alliance to Syriatel in
October 2006 at about the same time it received its license. Within one year of operations Ytelecom attracted around 300,000 subscribers.
Yemen remains one of the few Arab countries without an independent telecommunications
regulatory authority. The countrys Ministry of Telecommunications and Information
Technology (MTIT) acts as the de facto regulatory authority for the sector.
While the mobile phone sector has been fully liberalized, Yemens fixed line sector remains a
monopoly controlled by state-owned fixed line service provider, the Public
Telecommunications Corporation. Yemens fixed line subscriptions rose to 1,337,122 by end
2008, at a growth rate of 30.84% from 1,021,988, resulting in a penetration rate of 5.75%.
Meanwhile, Yemen registered 40% growth in Internet users, to register 1,570,800 users by
end 2008, up from 1,122,000 in 2007. This reflected in a rise in Internet penetration to 6.67%.
Yemens computer installed base sustained steady growth in 2007, growing at 32.03% to
register 592,551 from 448,800 computers in 2007. Penetration remained marginal, however,
at 2.55%, the lowest recorded penetration rate among MENA economies for 2008.
76

APPENDIX:
1. Active mobile phone operators in the MENA Region
ACTIVE MOBILE PHONE OPERATORS, 2008
COUNTRY
ALGERIA
BAHRAIN
EGYPT
IRAQ
JORDAN
KUWAIT
OPERATOR
LIBYA
MOROCCO
OMAN
QATAR
SAUDI
ARABIA
NETWORK
LAUNCH
Mobilis
www.mobilis.dz
2004
Orascom Telecom
Djezzy
www.djezzygsm.com
2002
Wataniya Telecom Algerie

Bahrain Telecommunications
Company
Zain
Nedjma
www.nedjma.dz
1999
Batelco
www.batelco.com.bh
1995
Zain
www.zain.com
2003
Orascom Telecom
Mobinil
www.mobinil.com
1996
Vodafone
Vodafone
www.vodafone.com.eg
1998
Etisalat
Etisalat Misr
www.etisalat.com.eg
2007
Qtel
AsiaCell
www.asiacell.com
2003
Zain
Zain
www.zain.com
2004
Korek Telecom
Korek
www.korektel.com
2001
Zain
Zain
www.zain.com
1995
Jordan Telecom
Orange
Mobile
www.mobilecom.jo
2000
Batelco
Umniah
www.umniah.com
2005
XPress Telecommunications
Xpress
www.xpress.jo
2005
Zain
Zain
www.zain.com
1994
www.wataniya.com
1999
www.alfa.com.lb
www.mtctouch.com.lb
www.libyana.ly
1995
1995
2004
www.almadar.ly
1996
www.iam.ma
1994
Fal Dete Telecommunications

Zain
Libyana Mobile Phone Company
Madar Telecommunications
Company
Maroc Telecom
Wataniya
Telecom
Alfa
MTC Touch
Libyana
Al-Madar AlJadeed
Maroc
Telecom
Meditel
Meditel
www.meditel.ma
2000
Qtel
Nawras
Oman
Mobile
www.nawras.com.om
2005
www.omanmobile.om
1996
Jawwal
www.myjawwal.com
1999
Qtel
www.qtel.com.qa
1993
Etihad Etisalat
Mobily
www.mobily.com.sa
2005
Public Telecommunications
Company
Bravo
www.ptc.com.sa
2005
Oman Mobile
PALESTINE
URL
Algerie Telecom
Wataniya Telecom
LEBANON
NETWORK
NAME
Palestine Cellular
Communication Company
Qatar Telecommunications
Company
77
SUDAN
SYRIA
TUNISIA
Saudi Telecommunications
Company
MTN Sudan
Saudi
Telecom
MTN Sudan
www.stc.com.sa
1996
www.mtn.sd
2005
Zain
Sudan Telecommunications
Company
Zain
www.zain.com
1997
Sudani
www.sudatel.net
2006
MTN Syria
MTN Syria
www.mtn.com.sy
2001
Syriatel
Orascom Telecom
Syriatel
Tunisiana
Tunisie
Telecom
www.syriatel.com
www.tunisiana.com
2001
2002
www.tunisietelecom.tn
1998
Etisalat
www.etisalat.ae
1994
Du
www.du.ae
2007
MTN Yemen
MTN Yemen
www.mtn.com.ye
2001
Sabafon
Sabafon
www.sabafon.com
2001
Yemen Mobile
Yemen
Mobile
www.yemenmobile.com.ye
2004
Tunisie Telecom
Emirates Telecommunications
Corporation
Emirates Integrated
Telecommunications Company
UAE
YEMEN
2. Active Fixed line Operators in the MENA region

ACTIVE FIXED LINE O PERATORS, 20 08
COUNTRY
ALGERIA
BAHRAIN
EGYPT
IRAQ
OPERATOR
URL
Algerie Telecom
www.algerietelecom.dz
Lacom
www.lacom.dz
Batelco
www.batelco.com.bh
Telecom Egypt
Iraq
Telecommunicati
ons and Posts
Company
www.telecomegypt.com.eg
N/A
JORDAN
Jordan Telecom
www.orange.jo
KUWAIT
Ministry of
Communications
www.mockw.net
LEBANON
LIBYA
MOROCCO
Ogero
www.ogero.gov.lb
GPTC
www.gptc-libya.com
Maroc Telecom
www.iam.ma
Meditel
www.meditel.ma
Wana
www.wana.ma
OMAN
PALESTINE
OmanTel
www.omantel.net.om
PalTel
www.paltel.ps
QATAR
SAUDI ARABIA
Qtel
www.qtel.com.qa
Saudi Telecom
www.stc.com.sa
78

SUDAN
SYRIA
TUNISIA
UAE
YEMEN
SudaTel
www.sudatel.net
Canar Telecom
www.canar.sd
Syrian
Telecommunicati
ons
Establishment
Tunisie Telecom
www.ste.gov.sy
www.tunisietelecom.tn
Etisalat
www.etisalat.ae
Du
www.du.ae
TeleYemen
www.teleyemen.com.ye
79

he Population Qund its Impact on GCC Performance Indicators
The Population Question and its

Impact on GCC Performance
Indicators2
Due to very high population growth rates and unique demographics dominated by large expatriate
communities, especially unskilled transient labor forces, the GCC population figures are often
underestimated in global reports and the performance indicators of the GCC states are invariably
skewed
No doubt2, a countrys population figure is of primary importance for a nation in so many

ways, since it is the basis for calculating numerous key indicators, such as per capita gross
national product, tertiary enrollment ratio, technology adoption, or the number of physicians
per 1000 of population. While such indicators are most vital for governments to draw their
development strategy and adjust their policies, they are also important for international
organizations to benchmark the performance of world countries against each other in various
areas of development. Additionally, such indicators are invaluable for business planning and
development. If a population estimate has a significant deviation from reality, indicators
would be skewed or distorted and decision based on them may lead to catastrophes. A
census, if carried out properly, is the most accurate figure for the population in a given year,
while a growth rate is added to provide a reasonable population estimate for successive
years. Unless there is a dramatic change forced by war or natural disaster, a population figure
usually follows a more or less steady growth pattern based on new births rate, mortality rate
and migration.
The six Gulf Cooperation Council (GCC) member states represent a population case whose
growth rate and peculiar demographics have defied the norms and have led to largely
overlooked or underrated misrepresentation of the population and the numerous indicators
that depend on it.
Unlike most countries of the world, the GCC states have for the past three to four decades
been relying on a large expatriate workforce to fuel one of the largest and fastest
construction and development booms in the world. This workforce, which covers the whole
spectrum of skills, from none to highly qualified professionals, has grown over the years to
constitute anything from 20 percent to 80 percent of individual countries populations in the
GCC by end 2008.
Supplementary from June 2009 Edition of Madar Research Journal
80

Census carried out in individual GCC countries provided the first official population figures to
be used widely, nationally and internationally, regardless of their varying degrees of reliability.
Reliability became more of an issue when population breakdown was considered, especially in
GCC countries with the highest expatriate populations, due to a number of reasons including
political sensitivity
I M P A C T O N I N T E R N A T I O N A L P E R F O R M A N C E I N D I CA T O R S
Internationally, census figures were adopted by all organizations whether the United Nations,
the World Bank, International Telecommunications Union, research institutions or nongovernmental organizations. While an overall population figure based on census may have
been reliable enough for the year it stood for, estimates used internationally for successive
years were often unreliable and at certain years differing by as much as 25 percent or more
from the best official or authoritative estimates thus, completely distorting all indicators
based on them. This applies mainly to the United Arab Emirates, and Qatar, followed by
Kuwait and Bahrain, which have the highest annual population growth rates in the GCC and
among the highest in the world.
There is more than one reason why the GCC populations can be so widely misrepresented at
global organizations. The United Nations usually uses the latest census figure available for a
country and then adds an annual growth rate as per world norms, which is too modest in the
case of the GCC countries. Year after year, and until the next census, the gap between the
actual population figure and the estimate becomes wider. These figures are often copied by
other organizations and used for calculating various indicators, leading to a wider
misrepresentation of a countrys performance against the rest of the world, where population
growth is modest. There are instances when old population figures are used (i.e.: the latest
available census figures) for all countries with the source year indicated. Again, indicators for
countries with the highest population growth suffer the highest inaccuracies.
Very rarely, an international organization may take up the time-consuming and thorny
challenge of seeking more reliable, updated population estimates from the countries
concerned to achieve higher accuracy for its indicators. While such a course of action would
generally yield more reliable figures, some countries may have more than one official
estimate, with significant differences between them, as in the UAE as detailed in the following
below.
81

U AE P OP ULA TI ON FIGUR ES
(USED BY UN VERSUS CONFLI CTING OFFICIAL/NATIONAL)
2004
2005
2007
2007
2008
Source
4,320,000
4,924,800
5,629,046
6,493,929
7,338,140e
Based on Statistics prepared

by the Federal National
Council for 2007 - end-year
Growth
14.00%
14.30%
15.36%
13.00%
3,933,000
4,089,000
4,233,000
4,364,000
4,485,000
UN Data - mid-year
4,011,000
4,161,000
4,298,500
4,424,500
4,542,000
UN Data - end-year (adjusted

by Madar Research)
Growth
3.74%
3.30%
2.93%
2.66%
3,761,000
3,986,000
4,229,000
4,488,000
4,765,000
3,873,500
4,106,427
4,358,500
4,626,500
4,915,500
Growth
6.01%
6.14%
6.15%
6.25%
Ministry of Economy - Central

Statistic Department - midyear
Ministry of Economy - endyear (adjusted by Madar
Research)
Since the population figures used by international organizations are always older i.e.:
smaller than the actual population figures they increase the value of the indicator based on
them. In other words, they make a countrys performance in a particular field looks better
than it really is, such as in the following examples.
According to the International Monetary Fund (IMF), Qatar has the highest GDP (PPP) per
capita in the world in 2008, calculated at US$85,868. This was based on a population of 1.10
million. However, using the official population figure of 1.45 million, released by Qatar
Statistics Authority for mid 2008, Qatars 2008 GDP (PPP) per capita becomes $65,092 more
than 24 percent lower than the IMF figure. Fortunate for Qatar, this correction despite the
big difference in outcome would bring down its global ranking by only one notch leaving
Luxembourg to lead the world in GDP (PPP) per capita.
Due to a high influx of expatriate workers, Qatar has the highest population growth in the
world, which can greatly impact its performance indicators from one year to the next. To
appreciate the weight of the population growth year over year, the table below shows the
official annual growth since 2004, compared with growth figures used by the UN. While the
official (actual) annual growth rate has been averaging at 17 percent, the rate adopted by the
UN has been ranging between 11 percent and 13 percent. It is not clear why the UN figures
are much lower.
82
QATAR POPULATION FI GURES (UN DATA VERSUS NATIONAL DATA)
2004
2005
2007
2007
2008
Source
760,946
888,451
1,041,733
1,226,211
1,448,446
824,699
965,092
1,133,972
1,337,329
1,553,729
Qatar Statistics Authority mid-year

Qatar Statistics Authority end-year (adjusted by Madar)
Growth
17.02%
17.50%
17.93%
16.18%
797,000
885,000
1,001,000
1,138,000
1,281,000
UN Data - mid-year
841,000
943,000
1,069,500
1,209,500
1,345,000
UN Data - end-year (adjusted

by Madar Research)
Growth
12.13%
13.41%
13.09%
11.20%
Another more striking example of how the use of a wrong population figure can affect a
countrys world ranking is mobile phone penetration in the UAE. According to the
International Telecommunications Union (ITU), the UAE had the highest penetration rate in
the world in 2007 at 176.52%. ITU based the calculation of its indicator on a UAE population
of 4,380,000 (end 2007) while the most realistic estimate for end 2007 (released by the
Federal National Council FNC) was 6,493,929. Using the FNC estimate to calculate the
indicator for 2007 makes the UAE mobile penetration stand at 119.06%. UAEs global ranking
would dramatically drop from first to 16th. The indicator as calculated by the ITU is about 57
percentage points higher than the one calculated by Madar Research, using best official
estimates published by government sources.
Recalculating the same ITU indicator for other GCC member states reveals differences as big
as 56 percentage points (Qatar), 46 (Bahrain), 16 (Kuwait), 8 (Oman) and -1.58 (Saudi Arabia),
as detailed in the table below. Except for Saudi Arabia, mobile penetration rates as calculated
by ITU using old population figures or under-estimates have been greatly blown up, thus
unintentionally or carelessly giving the world wrong or unreliable information about the
mobile phone scene in the GCC.
MOBILE PHONE PENETRATION RATES IN GCC, 2007
(ITU VERSUS MADAR RESEARCH)
Country
Mobile Phone Subscriptions Per 100 Inhabitants

2008
ITU
Change in Global Rank
Madar Research
Calculation *
Calculation
From
To
Country Population -2007

As Per ITU
As Per Official
Estimates
UAE
176.52%
119.06%
16
4,380,000
6,493,929
Qatar
150.52%
94.55%
54
840,000
1,337,329
Bahrain
Saudi
Arabia
Kuwait
148.80%
103.25%
45
750,000
1,080,869
114.76%
116.34%
26
20
24,730,000
24,395,000
97.32%
81.59%
53
78
2,850,000
3,399,637
Oman
96.15%
87.78%
55
68
2,600,000
2,848,000
*Based on official population estimates from government sources for end 2007 (or adjusted for end 2007)
83

The gravity of this problem can be better perceived when considering the large number of key
performance indicators, whether in the field of information and communication technology,
socio-economy or others, which are similarly affected, and all the decisions or opinions
influenced by them.
Madar Research examined the population figures used by UN organizations during the past
five years (2005-2008) and calculated the population growth rates for each of the six GCC
states. These were compared with the growth rates calculated as per the best official
estimates available for each year. The difference in growth rates was quite disturbing, as
detailed in the table below. For instance, the growth rate for the UAE in 2008 stood at a mere
2.66 percent according to UN data while the one based on official UAE figures stood at 13
percent. All UAE growth rates witnessed huge variations. Year after year the gap between UN
population data and government figures became larger. Difference in growth was also very
large for Kuwait and Qatar. The UN growth rate for Kuwait in 2005 was three percent,
compared to 8.62 percent as based on government estimates.
Growth rates for Saudi Arabia did not show big variation and in 2006 official estimates
indicated a growth as low as 1.84 percent even lower than the UN rate. In the case of Saudi
Arabia, however, several indicators suggest that government population figures over the past
few years were gravely underestimated. A census scheduled before the end of 2009 is
expected to rectify Saudi Arabias population figure.
PO PULATION GROW TH RATES IN G CC (UN D ATA VE RS US NATIONAL DATA)
Country
2005
2006
2007
2008
Source
UAE
14.00%
14.30%
15.36%
13.00%
UAE
3.74%
3.30%
2.93%
2.66%
Based on statistics prepared

by the Federal National
Council
UN Data
Qatar
17.02%
17.50%
17.93%
16.18%
Qatar Statistics Authority
Qatar
12.13%
13.41%
13.09%
11.20%
Kuwait
8.62%
6.41%
6.81%
1.24%
Kuwait
3.05%
2.76%
2.49%
2.32%
Bahrain
7.98%
8.14%
8.10%
6.96%
Bahrain
Saudi
Arabia
Saudi
Arabia
2.22%
2.17%
2.13%
2.02%
2.52%
1.84%
2.37%
3.46%
UN Data
Public Authority for Civil
Information
UN Data
Central Informatics
Organization
UN Data
Ministry of Economy and
Planning
2.34%
2.23%
2.15%
2.09%
UN Data
Oman
3.27%
4.60%
7.07%
5.80%
Ministry of National Economy
* Population figures used to calculate growth are for year end or adjusted to year end by Madar Research
84
OFFICIAL GCC COUNTRY POPULATION (2005-2008)
Country
2004
2005
2006
2007
2008
4,320,000
4,924,800
5,629,046
6,493,929
7,338,140e
824,699
965,092
1,133,972
1,337,329
1,553,729
2,753,700
2,991,200
3,183,000
3,399,637
3,441,813
856,284
924,625
999,861
1,080,869
1,156,114
Saudi
Arabia
22,825,000
23,400,000
23,830,000
24,395,000
25,239,067
Oman
2,462,500
2,543,000
2,660,000
2,848,000
3,013,184
UAE
Qatar
Kuwait
Bahrain
Source
Based on statistics
prepared by the Federal
National Council
Qatar Statistics
Authority
Public Authority for
Civil Information
Central Informatics
Organization
Ministry of Economy
and Planning
Ministry of National
Economy
* Population figures used to calculate growth are for year end or adjusted to year end by Madar Research
IMPACT ON NATIONAL LEVEL

While regularly updated figures or reasonable estimates for the high-growth GCC populations
is crucial for assessing these countries performance indicators, especially with respect to
their international peers, GCC countries unique population composition of exceptionally large
ratio of expatriate workers to nationals presents yet another complication that requires
special treatment to rectify how national performance indicators should be measured.
The ratio of nationals to expatriates ranges from 73:27 in Saudi Arabia to as low as 13:87 in
the UAE and Qatar, as shown in the table below. While in most countries around the world
part or most of these expatriate populations would turn into permanent residents and
eventually be naturalized, especially those who stayed in the GCC for several years, GCC
countries have very restricted naturalization laws which allow for only a trickle of expatriate
residents to gain local nationalities.
POPULATION BREAKDOWN IN GCC, 2008
Country
Nationals (%)
Expatriates (%)
UAE
13
87
Qatar
13
87
Kuwait
31
69
Bahrain
51
49
Oman
70
30
Saudi Arabia
73
27
Source: GCC government websites
The presence of such large ratio of expatriates to nationals affects national performance
indicators in so many ways and in such a dynamic manner from year to year.
85

The current world recession, for instance, has already triggered layoffs in the GCC and a
reverse influx of expatriates back to their countries, whose impact on the populations and its
demographics is yet to be seen and measured. Added to this is that many expatriates who had
brought their families from their home countries would under the current financial crunch be
forced to send them back home where life is often less costly. This would change the age
distribution, male to female ratio, among many other demographic, socio-economic and ICT
indicators to varying degrees in all GCC countries next year. In other words, the larger the
ratio of expatriates to nationals in a GCC country, the greater is the impact of any change
factor be it economic, political or other on the countrys population and demographics.
Putting aside the entire expatriate populations and recession scenario, what adds much
complexity and confusion to performance indicators is the presence among expatriates of
large transient population of unskilled or poorly skilled laborers. In 2008, these laborers,
which are brought mainly from south and south-east Asia, constituted up to 30 percent of the
total population in the UAE, 25 percent in Qatar and lower percentages in Kuwait and Bahrain,
followed by Oman and Saudi Arabia.
Unskilled laborers affect GCC indicators in countless ways. For instance, a high per capita GDP
is a good indicator on a countrys wealth, which is understood in the developed world to also
underline the relative wealth or high living standards for all or most of the people, since a
countrys wealth tends to get somewhat fairly distributed on the population at least in
terms of benefits rendered to the public. This is far from being the scene in GCC countries
with some of the worlds highest per capita GDP when a large portion of the population lives
in labor camps or group quarters and earns wages equivalent to US$150 or US$250 a month.
However, the impact is much stronger when considering ICT indicators. As the majority of this
labor force is illiterate or have limited financial resources, they hardly or never use a
computer or the Internet. Since they count as part of a countrys population despite that they
are transient (sent home after a projects completion), they bring down or skew the Internet
and PC penetration rates in the country. This means that when their numbers are reduced on
a given year Internet penetration surges, while in a construction boom their increased
presence brings down the penetration rate. Their impact on mobile penetration is less
negative since many workers use mobile phones.
Another important performance indicator is gross tertiary enrollment ratio, which is the total
number of enrolled students in higher education, regardless of age, as a percentage of the
population of the age group that officially corresponds to the level of higher education (18-24
years). As a majority of the transient unskilled labor in the GCC is in the age group 18-24, gross
tertiary enrolment in GCC countries appears much lower than it should be. The question is:
should this age group among the transient labor be excluded when calculating gross tertiary
enrolment, and thus arrive at a more representative indicator of the more permanent or
mainstream population that is fairly comparable with the rest of the world?
The transient labor population can also cause an apparent contradiction between indicators.
Internet penetration among households and Internet penetration among the population are
two indicators that differ in value marginally. In the European Union (EU-27), for instance,
household Internet penetration was 60 percent and Internet user per 100 inhabitants was 56
percent in 2008 with marginal difference of four percentage points between the two
indicators. In Qatar, on the other hand, household Internet penetration stood at 63 percent
86

while Internet user penetration was estimated at 38 percent a difference of 25 percentage
points. The reason for such a large difference is that Internet user penetration loses value
under the weight of one third of the population that lives in labor camps that are virtually all
none-Internet users. Meanwhile, since labor camps are not defined as households, and thus
are excluded from household surveys, and accordingly household Internet penetration
becomes much higher and more representative of the mainstream population of Qatar.
PROPOSED REMEDIES
An independent government body should be given the sole responsibility of generating and
regularly updating an official database of all statistics about the countrys population and
various demographics, using best international practices and standards. Such a body, which
has already started to be established in two or three of the GCC countries, would also be
responsible for using the proper channels to regularly communicate census results,
population estimates and relevant demographic data to the United Nations and other global
organizations. The body should also monitor global research reports to ensure accurate data
are used.
With respect to the distortion or misrepresentation of national performance indicators caused
by large expatriate populations, especially the transient unskilled labor force, the use of three
levels of population figures would provide a more realistic account of the population
demographics and a much higher level of accuracy for the relevant indicators. The first
population level would include only nationals in each GCC country, while the second level
would combine nationals and expatriates, but excluding transient labor force. The third would
include the entire population, including the transient labor force.
87

U AE POP ULA TI ON 20 07
Country
Nationals (%)
Expatriates (%)
Nationals
875,617
13.48%
Arab Expatriates
823,633
12.68%
2,367,732
36.46%
Pakistani
822,914
12.67%
Bangladesh
589,545
9.08%
Filipino
279,602
4.31%
Sri Lankan
104,623
1.61%
Iranian
100,309
1.54%
Nepalese
93,469
1.44%
Chinese
32,637
0.50%
Other Asians
151,234
2.33%
Other Africans
European and
Australian
72,453
1.12%
134,630
2.07%
North American
41,354
0.64%
South American
4,177
0.06%
6,493,929
100.00%
Indian
Total
Based on Statistics prepared by the Federal National Council for 2007 - end-year
88

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Penetration & Growth Trends

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Arab ICT Use Report - 2009

MADAR RESEARCH GROUP,

Copyright 2009-2010 Madar Research Group. All rights reserved.

Arab ICT Use Report - 2009

Arab ICT Use Report - 2009

Arab ICT Use Indicators 2008

Arab ICT Use Report - 2009

Source: Madar Research

Arab ICT Use Report - 2009

Arab ICT Use Report - 2009

Mobile Vs. Fixedline Growth Rate - 2008

Arab ICT Use Report - 2009

Arab ICT Use Report - 2009

M OBILE P HONE S UBSCRIPTIONS

ARAB MOBILE PHONE PENETRATION BY COUNTRY, 2007-2008

Arab ICT Use Report - 2009

ARAB MOBILE PHONE SUBSCRIPTIONS BY COUNTRY, 2007-2008

Arab ICT Use Report - 2009

Arab ICT Use Report - 2009

ARAB MOBILE PHONE SUBSCRIPTIONS

Arab ICT Use Report - 2009

Mobile Phone Subscription by Region, 2008

Yemen & Sudan

Sudan & Yemen

Arab ICT Use Report - 2009

ARAB FIXED LINE PENETRATION BY COUNTRY, 2007-2008

Arab ICT Use Report - 2009

ARAB FIXED LINE GROWTH BY COUNTRY, 2007-2008

Source: Madar Research

Arab ICT Use Report - 2009

Arab ICT Use Report - 2009

Arab ICT Use Report - 2009

FIXED LINE SUBSCRIPTIONS

FIXED LINE SUBSCRIPTION

Source: Madar Research

FixeLine Subscription by Region, 2007

FixedLine Subscription by Region, 2008

Sudan & Yemen

Sudan & Yemen

Arab ICT Use Report - 2009

Keeping its 2007 record, Sudan had the highest

Source: Madar Research

Mobile-to-Fixed line susbscribers, 2008

Arab ICT Use Report - 2009

INTERNET GROWTH FOR ARAB

Source: Madar Research

Arab ICT Use Report - 2009

Average Internet penetration for the 18

Source: Madar Research

Internet Users Penetration , 2008

Arab ICT Use Report - 2009

INTERNET USERS 2007

INTERNET USERS 2008

Arab ICT Use Report - 2009

COMPUTER INSTALLED BASE

Source: Madar Research

Source: Madar Research

Arab ICT Use Report - 2009

PC INSTALLED BASE 2008

PC INSTALLED BASE 2007

Source: Madar Research