Like much of the economy, Jordan’s media sector has been affected by the global recession, with revenue down and a round of belt tightening the order of the day, though even in difficult times the industry has been looking to improve both its quality and its bottom line.

The global economic crisis is having an impact on the Jordanian media sector, with advertising revenue for the first nine months of the year down by 20% compared to the same period in 2008, according to industry figures. This is a sharp turnaround from the past few years, which have seen double-digit earnings growth. If the current trend carries through to the end of the year, advertising revenue could fall to around $240m, down from the $303m of 2008.

In mid-November, the Jordan chapter of the International Advertising Association (IAA Jordan) announced it was launching a media awareness campaign to promote optimism in the economy and, just as importantly for the sector, the importance of maintaining advertising during the downturn.

According to Karim Abu Khadra, the president of IAA Jordan, the campaign will put the spotlight on firms that achieved growth thanks to continued advertising. Rather than reduce spending on advertising, as was so often the case in times of recession, studies showed that increasing promotional outlays could help a company weather hard economic times, he said in an interview with local press on November 15.

“We were able to take advantage of this global crisis to stop, think and carefully plan for future and the changes that we, as an industry, will face in the coming years,” said Abu Khadra. “We were also able to co-operate, exchange ideas and expertise to come up with this campaign – which we believe – is crucial for creating the behavioural change needed to face economic challenges.”

While the crisis has focused attention on the need to strengthen advertising income and revenue streams in the media sector, another initiative has been launched to improve the quality of Jordan’s media offerings, through the inauguration of a new training complex for media professionals in the Arab world.

The vehicle for this endeavour is the Jordan Media Institute (JMI), the brainchild of Princess Rym Ali, wife of Prince Ali Bin Al Hussein, but better known to many as Rym Brahimi, a producer and reporter with CNN following stints with the BBC and the Bloomberg news agency.

Located in central Amman, the JMI will focus on training and refining the next generation of media professionals in the Middle East, with plans to have two main streams, a masters programme and journalism training programmes, both of which will predominantly be taught in Arabic.

The year-long master’s programme, which will have its first intake in early 2010, will offer cross-media platform training in print, online, television and radio journalism, equipping students with the skills to meet the changing needs of the industry. Along with mandatory courses in reporting, writing, media law and press ethics, there will also be specialised training in investigative journalism, together with business, scientific and social affairs journalism.

The lower-level training courses, being developed in cooperation with local media and other academic institutions, are intended to offer those already working in the industry supplementary courses, while newcomers will receive introductory lessons.

Founded in 2007, the idea for the JMI grew from industry demands for quality media personnel, according to Princess Rym, with the shortage of qualified staff having been driven, in part at least, by the rapid growth of media across the Middle East.

“A lot of people complained of not being able to hire people at the highest levels – good journalists, critical thinkers who were able to write properly in Arabic,” she said in an interview with regional media in mid-October.

Jordan is by no means alone in putting in place media training facilities, with a number of universities offering courses in journalism and production across the Middle East. However, with the planned initial intake for its masters course being just 20 students, the emphasis of the institute’s programmes will be quality, Princess Rym added.

Despite the difficult economic times, the JMI has been successful in gaining support from a range of sources, both local and international. In May last year, the European Commission and the Ministry of Planning and International Co-operation inked an agreement under which the commission would provide $1.4m to support the JMI.

In mid-October, Zain Jordan – part of the Kuwait-based mobile telephone corporation Zain – announced it would fund a postgraduate scholarship for a Jordanian journalist studying at the JMI, while the institute has also been given support by advertising and international media consultancy agency Saatchi & Saatchi.

Both the positive press and a focus on knowledge within the industry will likely provide a much-needed boost to the Jordanian media sector, considering the challenges the country, and indeed the region, has faced over the past year. On a more practical note, by establishing Jordan as a centre for journalistic educational excellence, the JMI could well attract more investments in the local media sector, serving to improve quantity and quality.

Bahrain’s crowded telecommunications sector is about to get even busier, with mobile phone operators Bahrain Telecommunications Company (Batelco) and Zain set to face increased competition in the coming year.

In January, the Kingdom’s Telecommunications Regulatory Authority (TRA), the body charged with overseeing and controlling Bahrain’s telcoms sector, announced that the Saudi Telecommunications Company (STC) had been awarded the country’s third mobile phone licence, having bid $231m. On top of its licence fee, STC is investing some $100m to develop the required infrastructure to carry out its activities, including base stations, repeaters and relay masts.

While the new entrant into the market will boost competition, there was not much of it for the licence itself, with STC being the only bidder. Three other firms did register for the tender process and the TRA twice extended the deadline for bids.

This apparent lack of interest is probably a reflection on the already congested market, with mobile penetration rates running at 131% as of the beginning of this year. It is unlikely that STC will be able to increase this penetration level, rather it is expected to try to eat into the market shares of Batelco and Zain, with company officials saying they were looking to acquire a 20% slice of the market within 10 years. Currently, the two existing service providers have a roughly equal share of Bahrain’s client base, both with around 700,000 subscribers.

There is another competition being played out in the sector, that between the TRA and Batelco, with the former claiming the service provider is acting to restrict rivals’ access to the market, allegations the latter has rejected.

On November 24, the TRA announced it had fined Batelco $13.27m for failing to provide other firms sufficient access to an international cable. Two months previously, the TRA had ordered the company to comply with its obligations to provide the services necessary to allow other licensed operators direct access to Reliance Globalcom and the Falcon undersea cable system.

According to Alan Horne, the TRA general director, by denying access to the cable to competitors, Batelco had acted to the detriment of Bahraini citizens, businesses and the economy by restricting international and broadband internet services.

“Direct access to the international capacity of the Falcon submarine cable system has been identified as a key issue for the further development of competition within the telecommunications sector and the Kingdom’s economy,” Horne said in a statement accompanying the ruling against Batelco. “The TRA firmly believes this order and the opening up of international capacity on a competitive basis will be a watershed in the development of the telecommunications sector. Internet usage will grow, prices decrease and speeds increase.”

Batelco is appealing the decision with chief executive officer Peter Kaliaropoulos saying the company would do all that it could to persuade the TRA to reverse its ruling by submitting additional information to support its case.

“Whilst we are investigating the required initiatives to comply with the order, we will also be submitting further information relating to this matter,” said Kaliaropoulos after the ruling was handed down. “We are hopeful that the TRA will reconsider this ruling in the coming weeks.”

It its defence, Batelco has accused other firms of preferring to rely on its own sizeable existing investments in infrastructure rather than building up their own networks, leaving the former telecoms monopoly saying it has to help prop up its direct rivals.

Kaliaropoulos also warned of the effecr the fine, if enforced, would have on the company’s financial results for 2009. In the first nine months of the year, Batelco posted consolidated revenue of $676m, up 4.4% on its results for the same period in 2008, with net profit up 1.5% to $208m.

Given that the company’s net profits of last year were a record $276m, fines and economic downturn notwithstanding, Batelco is still looking to call in a good end-of-year result.

It is unlikely that STC’s entry into the Bahraini market will prompt sharp cuts in the costs of many mobile phone and related telecommunications costs, as happened when Zain burst on the scene at the end of 2003. In the past year, the cost of broadband subscription packages has fallen by up to 50%, while service speeds have been increased. Mobile phone rates have also been pared back and both Zain and Batelco have launched new service options. With limited scope for movement, the Saudi newcomer will have to engage with clients through a smart phone policy, rather than adopting a cheap ring tone.

Tata Communications, one of India’s leading companies & one of the largest converged telecoms operators globally has signed  strategic partnership agreements with several of the major telecommunications operators in the Middle East to construct a new cable system in the Gulf.

The new cable will connect the region directly to the world’s major business hubs and city centres via the Tata Global Network (TGN).

The partners, Bahrain Internet Exchange in the Kingdom of Bahrain, Nawras of Oman, Qatar Telecom of Qatar, Mobily of the Kingdom of Saudi Arabia & Etisalat of the United Arab Emirates will each be the exclusive landing party for the TGN Gulf cable system in their respective geographies. The cable &the relationships with the landing parties will be further developed to provide an extended VAS product portfolio for both local & global enterprise customers in what is rapidly becoming the fastest growing market for new telecoms services.

Vinod Kumar, President and COO of  Tata Communications, said: “This partnership with the top operators in the Middle East to build the TGN Gulf cable system underscores our aspirations to be a key player in the emerging markets space. Each of these partnerships will create mutual benefits that will multiply steadily as companies in the Middle East expand out to the rest of the world and as global MNCs seek connectivity to expand their operations to this fast growing region.”

The TGN-Gulf cable system and its associated worldwide reach provide new dimensions to the infrastructure and unique service capabilities for each of the partners. Using their own cable station, each party will have access to a new high-speed route to the globe & bring in much needed resilience and diversity to the local networkk infrastructure in each country. Consumers in the Gulf region are set to enjoy real benefit, as the extra capacity will enable expansion in broadband penetration, internet usage & enterprise applications in each market served.

The total length of the cable system within the Gulf region will stretch nearly 5,000 km, spanning the Arabian Sea from Mumbai through to Oman and onto Kuwait. The segment will connect to Tata Communications’ global cable and backhaul network, which is one of the largest in the world. Building and installing the global submarine cable will take approximately 22 months, on completion, the cable will provide at least 1.28 TBit/s of additional international connectivity in the region.

This is a great follow on from Tata (NYSE: TCL), as they have already committed to the SEACOM project in East Africa, which links South Africa, Mozambique, Tanzania & Kenya to India & also Europe. By adding the Gulf circuit to the West bound cable, which lands in Marseille, the Gulf operators taking part will increase their access significantly. With many Gulf nations looking past hydrocarbon based economies to service lead, network infrastructure is one of the basic building blocks that they must get right.

Long a leader in the utilisation of information technology, Bahrain is working to hone its advantage, further building on its electronic services programme at home while spreading knowledge through cyber-space across the Arab world.

A recent report by the UN Development Programme (UNDP) revealed that internet use in the majority of Arab countries remains below the prevailing global rate of 21% of the population. In part this could be due to the low level of Arabic content on websites – presently around 1% of the total.

In its Arab Knowledge report 2009, issued at the end of October, the UNDP said there was an urgent need for further research to understand the interaction of the Arabic language with technological developments and to meet the growing demands of Arab users.

In its report, the UNDP cited Bahrain as one of four Arab countries ranked in the top-50 globally as being most ready for investment in the area of information and communications technology (ICT). That readiness, along with Bahrain’s strong commitment to ICT, may well have influenced the UNDP to partner with the Kingdom in a new project.

On November 2, Bahrain’s eGovernment Authority (EGA) and the UNDP formally signed an agreement to establish the Arab Centre for eContent Development, a $460,000 project that will be based in Bahrain.

The main objective of the centre will be to develop Arab e-content by increasing its presence on the web relative to other languages, improving Arab online search engine capabilities and building skills in the area of e-government. It will also audit the quality of e-content and issue accredited certifications, while serving the private and public sectors both locally and regionally. As part of Vision 2030, the long-term plan spearheaded by the Economic Development Board (EDB) that is guiding the economic future of the country, the centre is expected to help foster a robust business environment.

In part, this will be done by providing Bahrainis with IT training, thus helping to create further employment opportunities. Yet not only could the centre create many jobs locally, the expertise it helps generate will result in thousands of jobs all over the Arab world, said Sheikh Ahmed bin Ateyatala Al Khalifa, the cabinet affairs minister who signed the joint agreement on behalf of the government.

“Bahrain is quickly becoming a pioneer in world-class technical initiatives that serve the general public,” said Sheikh Ateyatala, who is also a member of Bahrain’s Supreme Committee for ICT. “This programme will further consolidate the Kingdom’s position globally in the area of e-content, and create a better tomorrow for Bahrain and our fellow Arab nations.”

Bahrain launched the e-government project in 2007, with the aim of effectively delivering government services to citizens, residents, businesses and visitors. By the end of 2010, the EGA intends to have some 200 basic services offered electronically, a target it is on the way to reaching, having crossed the halfway point at the end of October.

Almost a quarter of the services currently on offer, including electricity bill payment, flight information and school examination results, are already available through mobile phones, with another 10 to be activated by the end of the year.

According to Mohammed Al Qaed, the chief executive officer of the EGA, by next year Bahrain will be an e-government leader in the Arab world.

If this goal were achieved, it would be fulfilling a prediction made even before the country launched its e-government project. Back in 2006, the UNDP issued a report that described Bahrain as possessing the fundamental elements enabling it to create a knowledge-based society, adding that this measure was “not only crucial for economic growth, but for sustainable development across the board”.

With the ramping up of the state’s e-government initiative, along with the potential offered by the Arab Centre for eContent Development, Bahrain is well placed to develop a knowledge-based society stretching far beyond its borders.

As 2009 draws to a close, Oman’s relatively underserved IT sector is preparing for the introduction of competition to the internet-service-provider (ISP) market, as QTel’s local subsidiary Nawras prepares to launch the Sultanate’s second fixed-line telecoms service.

Currently, internet service provision in the country remains the monopoly of Omantel, the predominantly state-owned national telecoms company. This is not for want of trying by the Telecommunications Regulatory Authority (TRA), the national telecoms watchdog. In 2007 it attempted to open the ISP market to competition by announcing the sale of licences to newcomers. However, perhaps as a result of the terms offered (which required potential new ISPs to lease infrastructure and bandwidth from the incumbent Omantel), no takers were found in the private sector.

As a result, a more ambitious approach towards introducing liberalisation and competition to the telecoms network was attempted. In April 2008 the auction of a second fixed-line telecoms licence was announced by the TRA, with the eventual winner, Nawras, announced in November of the same year.

Nawras has already proved extremely successful in Oman’s mobile telecoms market. A joint-venture between Qatar’s QTel, Danish operator TDC and a number of local investors, the company has captured around half the market share in Oman since launching services in 2005. Nawras has also served to shake up the market, often being the first operator to launch new services, and recently winning “superbrand” status in the Sultanate.

Having been awarded the contract for the second fixed-line telecoms network, Nawras will begin offering services in 2010. The company is building a backbone infrastructure of over 5000 km and will be providing fixed broadband coverage to more than 80% of the Omani population.

The government and regulator, not to mention the average consumer, will be hoping that Nawras’ entry to the fixed-line market will inject some dynamism to the ISP sector in particular. While Oman’s internet penetration figures have picked up in recent years, they still lag in comparison with the wider Middle East. According to internetworldstats.com, a website which monitors penetration rates by country and region, Oman’s current internet penetration level places it near the bottom of the regional table, with only Yemen and Iraq posting lower figures. There are currently an estimated 469,000 internet users in the Sultanate, representing penetration of 13.7%, compared with a regional average of 23.7%. Moreover, the majority of connections remain dial-up, with the government estimating a single subscription is shared between four or five people.

Some analysts and commentators have argued that there is an underlying antipathy towards the internet in parts of Omani society. As Jawad Sultan, the director of Jawad Sultan Enterprises, a private e-solutions company, told OBG, “We still occasionally read articles in local newspapers and magazines about how the internet is a bad influence. This needs to change.” However, it is possible to overstate such antipathy – other statistics seem to prove conversely that there is great potential for internet services in Oman, with a recent Arab Advisors report claiming 40% of Oman’s adult internet users spent a combined $236m via e-commerce in 2008. When analysed on a per-user basis, this comes to nearly $1500 – an impressive figure.

Oman naturally presents some challenges to expanding internet penetration – not least its sheer size, and the relatively low density of its population outside of major urban centres. However, with GDP per-capita figures of just under $20,000 at purchasing power parity, it is clear that Oman’s current level of internet penetration is well below potential. The entry of a second fixed-line network should go some way towards remedying that – both increasing the number of subscribers and the quality of provision, thus opening Oman’s economy to an e-future.

Syria is set to unveil a long-awaited new telecommunications law that could see the creation of an independent regulator and the creation of a new licensing regime for mobile operators.

Due to be introduced by early next year, the new law will also see state-owned Syrian Telecommunications Establishment (STE) restructured to become a commercially driven player, as well as pave the way for the possible arrival of a third mobile operator that should lead to increased competition and ultimately result in lower tariffs and increased penetration.

The STE is currently set-up as a public enterprise and holds a monopoly over the provision of fixed-line services and infrastructure. The STE also serves as the sector’s regulator, a function which, according to its general manager, Nazim Bahsas, is becoming increasingly burdensome. “Fulfilling the regulatory role is not our core business and consumes more than 30% of our management time, detracting from our ability to focus on and dedicate resources to the operational side of our business,” he told OBG.

The new law will remove the regulatory function from the STE, allowing the company to focus on boosting its commercial operations. The subsequent, more competitive and independently regulated market should provide a boost to the industry. According to Bahsas, “Looking at global trends, in nearly every market where a separate regulator was established, tremendous progress was achieved for the sector as a whole, so the new telecoms law is a must for the country.”

Eventually, the government will also consider ending the STE’s monopoly over fixed-line services, but this will not take place for a few years. Bahsas justified the delay to OBG, explaining, “If we all of a sudden open the market and issue new fixed-line licences, we will be unable to compete under our current public sector structure, which does not afford us the flexibility to move with the pace of new technologies. So we need a grace period to restructure ourselves and build the necessary commercial and financial competencies to compete with any new arrivals.”

Pressure to end the STE’s monopoly over infrastructure is coming from abroad as well. A stipulation in the pending EU-Syria Association Agreement, which is likely to be signed next year, states that infrastructure ownership will be opened up six years after the agreement takes effect.

Some of the biggest changes will come about in the mobile sector, where the country’s two current private providers – Syria-owned SyriaTel and South Africa-owned MTN – operate under a somewhat restrictive BOT that has been in place since 2002.

While the two operators enjoy a consolidated market, both have expressed concerns over the restrictions the BOT model places on competitive behaviour, especially in the area of tariff flexibility and promotions. They also argue that the BOT model places significant pressure on margins, as they each have to pay out substantial royalties (50%), as well as a 20% charge to cover the costs of infrastructure. This, they argue, reduces the funds available for investments in further capacity and service upgrades.

For a population of 20m, two mobile operators is considered inadequate and the country has been considering a third participant for a number of years. Some of the region’s largest players, including the UAE’s Etisalat, Kuwait’s Zain, Qatar’s Q-Tel and Turkey’s Turkcell, have all been rumoured to have expressed an active interest in joining the market at one point in time.

Most agree that if a third entrant were to join the field, it would have to be under a licensing format. Having the new arrival operating under a licensing system while the incumbents competed under a BOT model would lead to an uneven playing field, which indicates that the new telecom law will see the entire system changed to a licensing regime for all participants.

When factoring in the average spending power of the population (the average monthly salary is around $200), most agree that having some of the highest tariffs in the region makes mobile services disproportionately expensive. And in May of this year, a group of subscribers organised themselves to carry out a one day boycott to express their discontent against what they perceive as unaffordable services.

Both MTN and SyriaTel have told OBG that they would welcome a new competitor, and are preparing themselves to become leaner and more efficient in anticipation. With present tariff rates in the country nearing their saturation point, there remains a substantial portion of the population that cannot afford services at existing prices. Should a licensing regime emerge, competitors would have more flexibility to compete and lower costs.

Ismail Jaroudi, the CEO of MTN, told OBG, “While we have accomplished a lot over the past few years within the boundaries of the BOT, we have now reached a point where we are stuck, and growth is not what it should be without the ability to lower tariffs. Overall, a new telecoms law that can formalise the sector and define the scope of the operators will have a great impact on mobile growth and the economy at large.”

Overall, while Syria’s telecommunication’s sector remains one of the most heavily regulated in the world, changes are afoot as the country sets to open up the competitive landscape and provide further opportunities for private sector participation. While year-over-year growth for 2009 has so far been impressive at around 30%, overall penetration, around 38% according to the Mobile World Database, is still substantially lagging behind the Middle East and North African countries’ average of 75.6%, with Syria ranking 15th out of the 20 countries surveyed. However, with a young and growing population (2.4% annual growth rate and 60% of the population below the age 65) and an expanding economy (the projected GDP growth rate for 2009 is 3%, according by the IMF), the country’s low penetration rates point to a sector poised to experience significant growth for many years to come.

Qatar is planning to further improve its information & communications technology (ICT) services through a public access government portal, while encouraging the wider use of advanced technological applications by the public in their dealings with the state, business & leisure.

Qatar has long been a regional leader in promoting the use of ICT in government services, establishing the Supreme Council of Information and Communication Technology (ictQATAR) in 2005 to oversee the development of the country into a fully integrated information-based society.

ictQATAR, which also serves as the country’s independent telecommunications regulator, is fostering the state’s Integrated E-Government Programme (i-Gov), which aims to improve the provision of state services, raise levels of transparency and accountability, and reduce costs through the use of ICT.

Central to the i-Gov initiative is Hukoomi, Qatar’s online government portal, launched in February 2008. Currently, more than 300 online services can be accessed through Hukoomi, a total Qatari officials intent to expand significantly over the coming year, with up to 80% of all public services scheduled to be available online by the third quarter of 2010.

According to a government White Paper issued in June this year, there is a growing acceptance by the public and private sectors for conducting official transactions online. In the 11 months of 2008 in which Hukoomi was operational, some 1.4m e-service government transactions were carried out, more than the 1.3m processed in the previous five years.

Though the White Paper said that Qatar’s i-Gov programme was still in its early stages, it has already, “established itself as integral to the national development of Qatar through its use of ICT, helping to realise the country’s ambitions”.

Thanks to the state initiative, and the resulting pick up by the private sector, the country’s ICT industry is expected to maintain high levels of growth for the foreseeable future. Estimates are that Qatar’s ICT sector could expand by up to 11% a year between now and 2012, with the size of the market reaching $550m by the middle of the decade.

Qatar’s advances in increasing access to and promoting the better use of ICT was acknowledged in the World Economic Forum’s (WEF’s) latest Global IT Report, with the country moving into the top-30 for the first time. The report, released at the end of March, ranked Qatar 29th out of the 134 countries assessed, and showed that the emphasis being put on ICT was having an impact in both the public and private sectors.

Significantly, the report placed Qatar eighth in the category of successful government promotion of ICT, while as far as importance of ICT to the state’s vision of the future, Qatar scored even better, coming in sixth globally.

One area where Qatar did not score highly was capacity for innovation – the ability to develop new applications or usages for systems, rather than relying on existing ones – where it was ranked 60th.

However, this is expected to change, according to Chan Meng Khoong, the executive director (ICT development) at ictQATAR. There is going to be an increased push to provide content in Arabic, rather than in English as is often the case, Khoong said in an interview with theGulf Times on October 1.

“We recognise the fact that there is a huge opportunity to develop online content in Arabic and use it for competitive advantage,” he said. “From there we can develop moves, games and analytical tools for business intelligence that are based on Arabic content. All of these are new opportunities. We have to look ahead quickly because we are not alone. Everyone else will be thinking along the same lines.”

Not only is Hukoomi going to be made more innovative, its already strong interactivity with the private sector is going to be reinforced in the coming year, said Khoong. With further changes to the platform, tourism services such as locating hotel accommodation or restaurants will be made available through the portal. Though many of these services are already available online, Khoong said by integrating them on the Hukoomi portal, access will be improved.

Though generally a leader in ICT utilisation, one area where Qatar could be doing more, and that is in combating the notoriously tricky area of cyber-crime according to Ranjit Rajan, senior research manager for software of information technology firm IDC Middle East.

There was a need to put in place stronger laws to deal with cyber crime in Qatar, Rajan said during a seminar on IT security in Doha on October 14.

IctQATAR, however, is moving towards strengthening measures against ICT crime, and has set up QCert, Qatar’s centre for information security, to monitor and improve ICT security systems, address cyber security risks and protect sensitive information.

While there may be a possible weakness in legislative protection, this would not be a problem only experienced by Qatar. With the explosion of ICT usage over the past decade, many states have struggled to ensure their rules and regulations keep pace with changes in technology and applications. Having moved quickly to comprehend the implications of the new wave of ICT, it is likely that the Qatari government and its agencies will bring the country’s laws up to the level required.

If so, and if the state continues to implement reforms at the rate it has been following to date, Qatar could further climb up the WEF’s rankings next year.

The Oxford Business Group’s series of publications are renowned as the leading source of economic information for nearly 30 countries across The Middle East, Africa, Asia, Eastern Europe and the Caribbean.

Ericsson & Emirates based operator du, have signed a three-year managed services agreement which will enable du to continue develop operational efficiency of nationwide GSM/WCDMA network operations.

The Ericsson (NYSE:ERIC) partnership provides UAE upstart du with a long-term sustainable operating model, reducing its operational expenses & enabling the operator to focus further on providing attractive new services to its subscribers. The network operations agreement also guarantees the performance and quality of du’s multi-vendor network.

Valter D’Avino, Vice President and Head of Managed Services, Ericsson, says that the deal confirms Ericsson’s position as the industry leader in managed services & underscores a shift toward managed services in the region.

“Managed services have become a key to the success of operators in the Middle East, as well as in the wider industry,” D’Avino says. “With Ericsson running network operations, du can devote even more attention to providing its customers with the latest mobile services with excellent network quality.”

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Qatar’s telecommunications sector is becoming increasingly competitive, both domestically and on the international stage.

The recently released Global Competitiveness Report 2009-10, prepared by the World Economic Forum (WEF), ranked Qatar as the most competitive economy in the Middle East and North Africa region, and 22nd overall out of the 133 countries assessed.

The country scored highly in the category of technological readiness, the ability of an economy to adopt existing technologies to enhance productivity. In particular, the WEF cited Qatar’s embrace of new communications technology as a factor that enhanced its competitiveness, saying, “The country has made great strides in harnessing the latest technologies, such as mobile telephony and broadband.”

Those great strides have seen Qatar ranked second in the world for per-capita mobile phone ownership, 37th for broadband internet subscriptions and 33rd for the total number of internet users.

While the willingness of Qataris to make use of the latest technological advances has helped to improve the country’s economic competitiveness at the international level, it is on the domestic stage where things are really heating up.

On March 1, a new era dawned, with Vodafone Qatar launching a limited mobile phone service, thus marking the end of Qtel’s monopoly on the market. Full services covering around 99% of the country were launched in July.

Not surprisingly, Vodafone Qatar has experienced some teething problems, partly due to having to share some of Qtel’s infrastructure and in part as a result of the unexpectedly high levels of client pick up. In mid-September, Vodafone Qatar announced it passed the 100,000 subscriber mark. Though well ahead of the company’s own projections, and a good start towards its target of taking a 40 to 60% market share within 10 years, Vodafone Qatar still has a long way to go before it can truly rival Qtel, which has 1.9m subscribers on its books.

Despite having just a fraction of Qtel’s subscriber numbers, Vodafone has set out its stall, seeking to challenge the incumbent with different products and pricing packages. And it is the appeal of the new that is attracting at least some of Qtel’s existing customers to its rival, with the two companies basically providing similar services on mobile and internet platforms. Both companies have reduced costs for some mobile phone services and stepped up special offers, including cut-price internet downloads and cheap international calls.

One area that Qtel still retains an advantage in is the fixed-line segment. Though Vodafone is also supposed to provide fixed-line services, a launch date for such an operation has yet to be set, with the company saying in early September it had not as yet been issued the required licence by the Supreme Council of Information and Communication Technology.

Though Vodafone (NYSE:VOD) may have to wait before it can mount its challenge to Qtel’s landline monopoly, the company has racked up a few impressive achievements in the past few months. The entrant’s initial public offering, which was concluded in April, raised $930m, with some 82,000 individual Qatari investors and 273 institutional investors taking a stake in the firm.

While Qtel is responding to the challenge offered by Vodafone, its domestic operations are just part of a much bigger corporate profile, with the company active in 17 separate countries across the Middle East, North Africa and Asia, maintaining a subscriber base of around 52m. The company has declared its objective of becoming one of the world’s top-20 telecommunications firms by 2020, an aim it seems on track to achieve.

Despite having raised its debt levels in recent years to fund an ambitious acquisitions programme, Qtel has had little difficulty in rolling this debt over, despite the generally tight liquidity situation. In mid September, it renegotiated a loan of $2bn, arranging a forward start agreement on a revolving credit facility maturing in November, extending the credit by two years.

According to Qtel’s chief executive officer, Nasser Marafih, the company is focusing on consolidating three years’ worth of growth, though it would always keep watch for any opportunities that would augment its portfolio.

Qtel may be an international firm, but much of its recent expansion has yet to be translated into revenue streams. Till they do, Qtel will rely on its original core market to underpin its operations, though now it will have to contend with a competitive Vodafone on the other end of the line.

Citing mismanagement and underinvestment, the Nigerian government recently revoked the sale of Nigerian Telecommunications Limited (Nitel) and its mobile subsidiary, M-Tel. Despite this setback, the country’s telecommunications sector is booming and is primed to overtake South Africa as the continent’s fastest-growing market. Given the rising potential, it’s likely that the former telecoms monopoly will be re-privatised soon.

Indeed, although a new tender for the 51% stake in Nitel has yet to be scheduled, there is already interest in the ailing operator. Globalcom Limited’s CEO, Jameel Mohammed, told local press that Nitel’s infrastructure makes it an attractive company, and that Globalcom is eager to revive the network.

The revocation of the sale came on June 1, when state officials announced that Transcorp, the local company that paid $500m for its controlling stake in Nitel in 2006, had breached its contract and that the government would re-assume control of the operator. The government cited a number of concerns, including the failure to invest sufficient capital and to retain a technical partner, a drop in market share, and a decline in fixed-line and mobile subscribers.

According to the government, Transcorp had not been able to pay staff salaries in recent months, causing M-Tel workers to strike. The workers only called off their seven-month strike in early June, after the government stepped in. The non-payment may have been a result of Transcorp’s alleged underinvestment in the operator. The government claims that Transcorp failed to invest NG8.9bn ($57.4m) in the first 100 days of the takeover and that it has accrued debts of NG17bn ($110m). British Telecom (BT), Transcorp’s original technical partner, also cited a lack of funding as its primary reason for withdrawing from the operator in 2007.

In addition to the financial difficulties, Nitel/M-Tel’s market share has dropped from 15% to 0.03% over the past year. Fixed lines are losing subscribers worldwide as mobile telephony has taken off, but the drop from 500,000 to 100,000 in three years is unusual, despite the broader trend. Even more worrisome is the decline in mobile subscribers, down from 1.3m to a few thousand. Considering that Nigeria’s mobile phone market is growing rapidly, up 23% in 2008, according to analyst estimates, M-Tel’s inability to retain customers makes it an outlier.

Increased competition accounts for some of the decline, with MTN Nigeria, Zain’s Celtel Nigeria Limited and Globalcom jockeying for the majority of subscribers, but estimates suggest that there is a significant number of potential new subscribers. The Nigerian Communications Commission (NCC) reported that the total customer base reached 62.99m at the end of 2008, but with a population of over 140m, according to the government’s most recent census in 2006, there is room for growth. Telkom, a South African company seeking to expand its operations in Nigeria, calculated that Nigeria’s penetration rate is just 30%, compared with 76% in South Africa. This figure may be on the low end, but even taking possible discrepancies into consideration, there is potential to attract further subscribers.

One of the biggest hurdles to deepening penetration, however, is Nigeria’s lack of infrastructure. To address this problem, the government will redesign its current telecommunications policy, according to Dora Akunyili, the minister of information and communications. The new policy will focus on rural infrastructure development and connectivity. At present, there are not enough base stations to support the number of users, leading to network congestion problems. Ernest Ndukwe, the executive vice-chairman of the NCC, has suggested that operators share the existing stations, of which he estimates there are 14,000 for GSM operators and 2400 for CDMA operators, while approximately 40,000 more are rolled out across the country. He expects the new stations to be rolled out in 2010.

While these small-scale developments will certainly boost connectivity, the biggest improvements will likely be seen in 2010 and 2011, when two new undersea cables begin operations. The Nigeria-based MainOne Cable Company began construction on its 14,000-km, 1.92 terabits per second (Tbps) cable in early 2008 and plans to connect West Africa to Europe, North America and Asia. The submarine cable project will reduce the cost of telecoms services in Nigeria by between 10 and 20%, according to Funke Opeke, the chief executive of MainOne. The first phase, which will cost NG250m ($1.6m), is set to open in 2010. A year later, the 14,000-km West Africa Cable System is projected to launch operations. The $600m, 3.84 Tbps, undersea cable will land in Lagos en route to connecting Cape Town and London, and will also significantly increase telecommunications capacity while easing prices.

In line with these advancements, Nigeria’s telecoms revenues should increase from the $8.4bn earned in 2008. As the country works to diversify its economy from its dependence on oil and gas, which have been particularly hard hit during the global financial crisis, and the benefits of infrastructure improvements start to materialise, telecoms, and the Nigerian economy, will reap the rewards