Leading industry analyst and forecaster BIS Shrapnel, and partner of Strategy Analytics, has launched the latest editions of its Regional Mobile Communication studies. These reports analyse the outlook for the cellular market in the Middle East and the Asia-Pacific, and forecast that the Middle East will surpass the Asia-Pacific in terms of the mobile penetration rate, by the end of 2006.
Mr Joe Leong, Asia-Pacific analyst at BIS Shrapnel and author of the Asia Pacific Telecommunications, 2005 to 2010 report, explains that last years 18 per cent growth of the cellular subscriber base across the Asia-Pacific was driven mainly by a handful of markets: India, Vietnam and Indonesia. These three countries enjoyed a robust growth rate of approximately 50 per cent each in 2005. Growth in the Indian cellular market surpassed even China over the three years to 2005, growing at 140 per cent in 2003 and 70 per cent in 2004, according to BIS Shrapnel research.
The growth potential in Indonesia's mobile market is immense, according to Mr Leong. A massive population base, coupled with low teledensity supports strong demand for wireless services in developing countries such as Indonesia. However, countries such as Australia, Hong Kong, Taiwan and Singapore have limited growth prospects due to market saturation, explains Mr Leong.
Mr Wisam Francis, Middle East and North Africa (MENA) analyst at BIS Shrapnel and author of the Middle East Telecommunications, 2005 to 2010 report, explains that significant government policy shifts and economic growth are the core factors contributing to the boom in the Middle East mobile market. The Middle East mobile market reached a new record in 2005, as a massive 20.6 million new subscribers took up a cellular service. This boosted mobile subscriber rates across the Middle East by 48 per cent, according to BIS Shrapnel research, bringing the total cellular subscriber base to 62.9 million by the end of 2005.
Summing up the prospects for the Middle East market, Mr Francis states: "growth is showing great promise in the Middle East, with at least a further 150 million people in the region currently living within range of a mobile network. It is conceivable that the cellular subscriber will double before the end of 2010."
Excluding Turkey, this promising outlook includes the following markets: Egypt, Iran, Palestine, Jordan, Kuwait, Lebanon, Oman, Qatar, Syria, Saudi Arabia, UAE, Yemen, Iraq, Israel and Bahrain. More broadly, commenting on the developments in the telecommunications market of the Arab MENA countries, Mr Francis explains that "Iraq and Algeria recorded triple digit growth in 2005. Egypt, Jordan, Oman, Saudi Arabia, Syria, Tunisia and Yemen, all recorded an average yearly subscription growth of 50 per cent or more".
Despite efforts exerted throughout the past few years to fully liberalise the telecommunication markets, none of the Arab MENA counties have yet reached the level of liberalisation of Jordan and Bahrain. Comparatively, the markets in Lebanon, Libya and Iran are particularly crippled, and struggling with high service tariffs or entry barriers, explains Mr Francis.
Currently all the markets in the MENA, with the exception of Qatar and the UAE, have two, three or even four mobile network operators. This will change in 2006. The Emirates Company for Integrated Telecommunications (EITC) should launch its UAE cellular network in mid-2006, becoming the second mobile service provider in the country. As for the longer term, the 2013 expiry date of Q-Tel's monopoly in Qatar is likely to be brought forward, hence ending all cellular monopolies in the MENA region.
Competition between network operators has been heated in Algeria and Saudi Arabia. In Algeria, Mobilis lost is pre-eminent position in to the new rival Djezzy. Mobily, the new mobile operator in Saudi Arabia was also another success story. The company managed to attract more than two million subscribers in less than six months, thrashing the incumbent STC in terms of new subscriber uptake for the same period (May to November 2005).
In terms of subscriber base size, at the end of 2005, Egypt had the largest cellular subscriber base in the MENA. The Egyptian mobile market experienced phenomenal growth during 2005. Cellular subscribers surpassed 14 million at the end of 2005 up from just 7.6 million the previous year and representing an 84 per cent growth rate. Nevertheless, with a penetration rate of around 19 per cent, Mr Francis believes there is still ample of room for growth.
Saudi Arabia is the second biggest mobile market in the MENA. This market has also experienced strong growth during the past three years. The number of mobile subscribers grew from 6.9 million in 2003 to nine million in 2004 and is estimated to have reached 13.4 million by the end of 2005. However, at the end of 2005, the mobile penetration rate will have reached 53 per cent - a figure which is well below its other Gulf Corporation Council (GCC) counterparts.
In 2005 Jordan experienced the biggest jump in mobile penetration rate compared with all the other Middle East countries. The cellular penetration rate rose from 28 per cent (1.6 million subscriptions) at the end of 2004, to 53 per cent (3 million subscriptions) at the end of 2005.
