Given the existing conditions in the global communications markets, key global players are focused and will continue to focus, for the near and medium terms, on strengthening financials by reducing debt, selling non-core assets, cutting capital expenditure (CAPEX) and enhancing customer retention, asserts a newly released report from the Arab Advisors Group.
This environment will undoubtedly have an effect on Arab liberalization programs, although it could allow regional telecom players to enter and fill the void of the global players. These regional players will have the chance to capture opportunities in many Arab markets, which are, for the most part, still underdeveloped, profitable and growing markets.
The list of regional players include United Arab Emirates (UAE)’s Etisalat, Qatar’s Q-Tel, Bahrain’s Batelco and Kuwait’s mobile operators. These are all, profitable, secure in their home markets and able to grow regionally.
The report shows that Arab governments that are looking to raise money through license auctions or through other means this year may be faced with a bidding process that involves little competition and ultimately reduced license fees.
“The tough state of the global telecom vendors may have unexpected benefits for the Arab World’s communications markets. The vendors are suffering from a decreased demand for infrastructure by their global customers. This makes these vendors more likely to discount pricing for new networks in the Arab world in order to increase revenues. New operators therefore could have lower CAPEX costs, although it may be difficult to obtain vendor financing arrangements,” Arab Advisors Group’s President Jawad Abbassi noted.
Eight global operators already have stakes in major Arab operators from Morocco to Bahrain. These are: Cable & Wireless, Vodafone, France Telecom, Orange, Sonera, Vivendi, Telefonica and Portugal Telecom. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
