Liberalisation does not equate to deregulation – on the contrary, countries liberalising their telecom sector have a stronger need for increased regulation, says Dr. Marwan Al Ahmadi, MTC’s CEO for Strategic Affairs and IT, at the Mobile Telecommunications Company, Kuwait (MTC)*.
Governments should make an effective transition from operator to regulator for reform efforts to succeed, and to attract risk averse strategic investors. It is also critical to establish a legal framework for fair and consistent regulatory decision-making; regulatory models also have to be adapted to fit individual markets.
Market analysts predict an 85 per cent growth in the Middle East telecom sector by 2010. While Kuwait, Saudi Arabia, Iran and Oman have already issued licenses to a second operator for telecom services, second licenses will be issued in UAE and Qatar in 2005 and 2006-07. Third licenses will be issued in Kuwait in 2006-07, in Saudi Arabia in 2006, and in Oman in 2007. A third GSM operator is also expected to operate in Jordan by June this year. “Regional governments need to demonstrate they are willing to adapt,” explains Dr Al Ahmadi. “Countries that attend to regulatory reforms first have experienced the best successes with telecom reform. Such reforms include the establishment of a regulatory authority with clear lines of jurisdiction and essential policies to support the introduction of competition.”
According to Dr Al Ahmadi, each operator will have to define its own positioning based on the services offered and pricing that will ultimately deliver better choice and service levels to the customer. Telecom prices have dropped by approximately 10-15 per cent in Oman and eight per cent in Bahrain as a result of competition. While competition will drive down prices, this drop will be more dramatic in a less developed market.
With multiple telecoms operators to choose from, customers will demand improved applications functionality, ease of access of multiple services, price competitiveness, and overall network performance. Technology progress will also drive increased accessibility, and, more importantly, affordability of telecommunications services. “Future converged networks are expected to offer a plethora of benefits versus traditional network with deployment costs lower by up to 50 per cent and, similarly, operational costs lower by 25 per cent,” predicted Dr Al Ahmadi at the first Mena Mobile Forum held in Dubai recently.
“Mena regulators are becoming more competent and market orientated and have already played a role in driving competition and growth. MTC is committed to becoming an international player with an estimated customer base of five million subscribers by the end of this year and 15 million subscribers by 2011. We are also committed to working with regulators in different countries,” he added.