Owing to competition between Jordan’s two GSM (Global System for Mobile Communications) operators, penetration rates exceeded 15 percent in 2001, when the number of GSM lines exceeded the number of fixed lines for the first time ever, asserts a newly released report from the Arab Advisors Group.
In the past few years, Jordan has managed to advance its communications infrastructure and services considerably, owing mainly to the partial privatization of the fixed monopoly operator and the entrance of effective duopoly competition on the GSM front—all in line with Jordan's commitments to the WTO (World Trade Organization) of which it has membership.
The report shows that since its partnership with strategic investor France Telecom, Jordan Telecom has acquired local datacomm operator and ISP (Internet Service Provider) Global One and launched subsidiaries MobileCom, e-dimension and Jordan Wide—clear moves to further position itself as an integrated communications services provider.
The operator has worked aggressively to improve its services launching an advanced Customer Care and Billing Service (CCBS) and a number of points of sales to better handle customer needs.
“Fixed subscriber penetration has only grown marginally since the privatization of Jordan Telecom. Yearend 2001 penetration stood at 13 percent, as opposed to 12 percent in 2000. This is mainly owing to the fixed to mobile substitution apparent in the market due to the competitive pricing of the GSM operators” Arab Advisors Group’s analyst Sarah Alalul said.
“The cellular market saw huge growth upon the entrance of the second GSM operator MobileCom in late 2000. The market grew by 462,000 GSM subscribers in 2001. This was close to double the rise in subscribers in 2000 and resulted in more than doubling the GSM penetration rate from less than seven percent in 2000 to 15.7 percent in 2001.”
“This was the year when GSM lines in Jordan exceeded the number of PSTN (public switched telephone network) lines for the first time,” Aloul added. “The Arab Advisors Group projects PSTN revenues to exceed the $460 million mark by 2006, up from $378.8 million in 2001, while GSM revenues will reach $673 million in 2006 up from $261.8 million in 2001,” Alalul explained.
Competition in the cellular market has been quite aggressive, with Fastlink flooding the market with many postpaid and prepaid packages and undertaking a sophisticated customer care platform as well as fierce marketing and sales campaigns. Its efforts have not gone in vein as Fastlink still commands a majority market share.
MobileCom, on the other hand, despite its competitive pricing and distinctively simpler packages—plus the launch of its Smart service, a cross between postpaid and prepaid—is still perceived as the poor man's operator. Having said that, the second GSM operator is offering tailored packages to the corporate sector and has made impressive inroads into the corporate market.
The report shows that the Jordanian market will have yet more competition in the future. Jordan’s Telecommunications Regulatory Commission (TRC) has offered to issue a maximum of three digital radio trunking licenses to the two GSM operators and the paging operator provided they launch service before the end of 2004.
Also, the government reported in June 2002 that Jordan Telecom will issue an IPO (Initial Public Offering) in the local stock market by the end of the year as a means to sell some of the government’s stake in the operator. J.P. Morgan Chase & Co. has won the mandate to act as the operator’s leading financial advisor and underwriter for the IPO. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
