Yemen’s Internet market registers high growth rates.
Despite the liberalization of the Internet market in Yemen, the Arab Advisors Group believes that the market has high entry barriers. The low tariffs of the governmental ISP, Yemen Net, compared to its rival, Y.Net which has majority government ownership as well, and the substantial difference in their market shares may hinder new entrants from seeking to operate in the country.
The Ministry of Telecommunication and Information Technology (MTIT) is the authorized body to award the Internet Service Providers licenses according to the Telecommunication law and according to the Ministry’s regulations. The Public Telecommunication Company (PTC) however, is a separate legal entity under the umbrella of the Ministry of Telecommunication and Information Technology (MTIT). It remains the sole body in Yemen that regulates the Internet and Datacomm markets.
The Internet service was first introduced in Yemen in 1996. During the period 1996 till April 2002, the Internet market was in a monopolistic status, where Y.net was the only Internet Service Provider. In April 2002, a second ISP, Yemen Net fully owned by PTC, launched its services in Yemen.
The two operating ISPs in Yemen, Yemen Net and Y.Net, operate according to two different perspectives. Y.Net is a commercial oriented ISP with higher rates, while Yemen Net is focused on the Yemeni Government’s push to expand the use of the Internet in the country with cut throat low rates. Both ISPs are owned by the public sector. Since the beginning of 2003, Yemen Net exempted its subscribers from paying the analog dialup connection monthly fees. The subscriber only pays for the setup fees (US$ 25.95) in addition to the local minute rate (1.5 YR/minute=0.008 US$/minute).
A new report, “Yemen Internet and Datacomm Landscape” was released to the Arab Advisors Group’s Telecoms Strategic Research Service subscribers on February 13, 2006. The 42-page report, which has 42 detailed exhibits, provides a detailed analysis of the Yemeni Internet and datacomm markets and profiles the two ISPs in the countries, Yemen Net and Y.Net. The report includes 5-year historical and 5-year projections on Internet uptake and revenues. The report provides, moreover, a detailed and comprehensive picture on the Internet market strategies and regulations, e-commerce, and online content and services landscape.
“The Internet penetration in Yemen is among the lowest in the Arab World region. By September 2005, Yemen’s Internet subscribers’ penetration stood at a very small 0.5%, The Internet users penetration was however 2.4% by end of September 2005. The Arab Advisors Group projects the Internet subscribers’ penetration to reach nearly 1.36% and the users’ penetration to reach nearly 6.81% by end of 2010.” Ms. Hadeel Sakkijha, Arab Advisors Research Analyst wrote in the report.
Yemen’s Internet accounts grew at a CAGR of 78% between 2000 and 2005. The Arab Advisors Group projects the subscriber base to grow at a CAGR of 23% between 2006 and 2010.
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