Telecoms & ITC

Egypt: Internet investment

For the past decade, the Egyptian government has pursued the development of a knowledge economy via the expansion of its information and communications technology (ICT) sector, now a major economic breadwinner. Now Egypt has cemented its position at the forefront of Arabic content expansion by becoming one of the first three countries in the world to receive a domain name in non-Latin script. In May 2010, the Internet Corporation for Assigned Names and Numbers activated the top-level Arabic domain name ".masr" for three Egyptian companies (TE Data, InTouch and Vodafone Data). The Arabic domain name may be used in addition to the standard ".eg" and other Latin character names. "Introducing Arabic domain names is a milestone in Internet history," the Egyptian communications and IT minister, Tarek Kamel, wrote in a statement. "It will boost the number of online users in the country and enable internet services to penetrate new market segments by eliminating language barriers." Saudi Arabia and the UAE received Arabic domain names at the same time as Egypt, while Russia was assigned the Cyrillic ".rf" the following week. ICANN reported that 21 requests have been filed for domains in 11 different languages since November, when the organization began accepting applications. It was high time for the inclusion of Arabic domains, as the internet currently underserves the world’s 320 million Arabic speakers. According to the Arab Media Outlook report by the Dubai Press Club and PricewaterhouseCoopers, broadband usage in the Middle East and North Africa region is expected to grow 25 per cent annually until 2013. "Arabic content creation is set to increase drastically, with 5 per cent of the world's population speaking Arabic and yet only 1 per cent of internet content available in that language," Wael El Fakarany, the regional manager for Google Egypt, Saudi Arabia and North Africa, told OBG. When it comes to putting Arabic content on the web, Egypt has assumed a leading role regionally. The Egyptian Ministry of Communications and IT's ICT Strategy 2007-10 includes an e-content program aimed at producing Arabic internet content, with an emphasis on the cultural and intellectual. For example, in conjunction with IBM, the ministry began digital processing of Egypt's National Archives in December 2009. The ICT sector has played a major role in the growth of the Egyptian economy during the global crisis, expanding 14.6 per cent in the 2008-09 financial year. In contrast, the overall growth rate for the economy was just under 5 per cent in the same period. Foreign investment into the sector has reached over US$1 billion annually, due in part to developed infrastructure, including the 3m-sq-metre technology park Smart Village in Cairo. In addition to courting international IT players, the government has focused on building up a more computer-literate populace as the foundation of an information society. In February 2010, internet penetration reached 22.2 per cent, representing more than 17 million internet users, while the state has made efforts to increase this rate by lowering internet costs. (Source: OBG)

Qatar signs deal to launch first satellite

Qatar is set to launch its first satellite by the end of 2012 as part of a deal signed between its Supreme Council of Information and Communication Technology (ictQatar) and Eutelsat Communications of France. The satellite project, named Eshail, will cost more than US$300 million, of which Qatar's share is more than 50 per cent, the companies said in a statement. Dr. Hessa Al Jaber, ictQatar secretary general, said the agreement was important because it would "secure its strategic interests in communications capabilities" in terms of broadcasting, communications and government services. Prime Minister and Foreign Minister, Sheikh Hamad bin Jassem bin Jabor Al Thani, said: "The project is a Qatari investment that has two dimensions. The first is financial investment and the second is media in view of the possession by Qatar of a lot of stations and satellite channels." To be launched at the end of 2012 by an Ariane rocket, the satellite will provide superior coverage across the Middle East, North Africa and Central Asia, the paper reported.

Mobinil to complete LinkDotNet deal before July

Egyptian mobile operator Mobinil will conclude its acquisition of the country's largest ISP, LinkDotNet, deal before July as the recent agreement between its shareholders Orascom Telecom and France Telecom will speed the deal, said CEO Hassan Kabbani. Kabbani said Mobinil would focus on providing data transfer services as a starting point to its business in the local telecom market, especially after FT chairman Stephane Richard statements that competition will concentrate on broadband services in the period ahead.

Oman: IT to the fore

Oman's burgeoning IT sector has been in focus again this month, as the Sultanate played host to the COMEX exhibition, the IT, telecoms and technology show. The event was held on April 26-30 at the Oman International Exhibition Centre (OIEC), hosted over 100 companies from across the region and further afield, and included a pavilion specializing on e-government and e-business in the Sultanate held on the 27th, where the CEO of the Information Technology Authority (ITA), Dr. Salim Al Ruzaiqi, was keynote speaker. The Omani authorities have made a significant push in recent years to improve their e-government offering, including the creation of an internet portal for government services and, most recently, the inauguration of the Sultanate's first cyber centre. The latter facility, based in the capital, Muscat, and known as the Oman National Computer Emergency Readiness Team (CERT), was opened earlier in April to provide the Sultanate with enhanced security for its information assets, as well as coordinating emergency responses to incidents relating to the internet. Reflecting the government's growing capacity in the field of IT, one of the highlights of COMEX this year was a stand dedicated to "e.oman", which as well as showcasing CERT and the official eGovernment Services Portal also included other elements of government support for the sector. The Oman Government Network, ePayment Gateway, National Data Centre, Innovation and Support Centre, eTransactions Law, National IT Training and Awareness, Oman National CERT, and the e.oman Awareness Campaign were all included in the stand, which was hosted by the ITA. In some respects, Oman's public IT infrastructure currently outstrips demand from the Sultanate's population, as internet penetration continues to remain relatively low. According to Internet World Stats, an online agency that monitors global internet penetration statistics, Oman had 557,000 internet subscribers in September 2009, representing a penetration rate of 16.3 per cent. By comparison, the current average penetration rate for the Middle East is 28.8 per cent. One reason for the relatively low figure is Oman's widely dispersed population, which naturally presents a challenge for telecoms providers. However, developments in both technology and market organization look set to gradually overcome this. On the one hand, 3G and WiMAX technology means that remote locations can now be serviced without the need to lay down cable infrastructure. On the other, 2010 has seen the emergence of a new fixed-line operator in the form of Nawras, which is currently in the process of laying 5000 km of fiber-optic cables and hopes to serve 81 per cent of the population by next year. Nawras, a joint venture involving Qatar's QTel, Danish firm TDC and several local partners, has been a mobile service provider since 2005 and hopes to enhance the market offering of integrated telecoms services in Oman, as well as developing the wholesale market through resellers and partnerships. The company will also be using WiMAX for its fixed services. (Source: OBG)

Kuwait: Telecoms competition

As the first market in the Gulf to allow competition between private operators, Kuwait's mobile sector is considered relatively mature and advanced, with high penetration rates and per capita spending on mobile services. While Kuwait's mobile companies enjoy solid earnings, they cite increased competition and burdensome restrictions as causes for a steady erosion of revenue earnings from voice services. As a result, they are continually rolling out and focusing on new services and technologies as a means of ensuring growth. Until the arrival of Viva as a third entrant in late 2008, Kuwait's mobile market was divided between two operators, Zain and Wataniya, both well-established global players that ploughed their domestic profits into aggressive expansion efforts across the Middle East and Africa. Zain was operational in 24 countries, with a global subscriber base in excess of 70 million, until the recent sale of much of its African assets to India's Bharti Aircell. While Wataniya, majority owned by Qtel since 2007, has a presence in Algeria, Saudi Arabia, the Maldives, Tunisia and the Palestinian Territories, with a subscriber base of 11 million. Despite both operators' significant geographic footprint, Kuwait still remains an important revenue earner for each, accounting, for example, for 43 per cent of Wataniya's group earnings. Kuwait's penetration rates and average revenue per user (ARPU) levels are considered high by global standards, standing at around 115 per cent and US$30-US$35 per month, respectively. However, by regional standards, penetration is behind other Gulf markets such as Bahrain (199%) and the UAE (193%), pointing to opportunities for further growth potential. ARPU, similarly, needs to be considered in the context of Kuwait's high disposable income levels: based on a percentage of national income, prices for fixed, mobile and broadband access ranked fourth lowest in a survey of 159 countries conducted by the International Telecommunications Union. (Source: OBG)

UAE sees 20pct annual growth in telecoms market, smart phones to drive sales in 2010

According to Mohamed Nasser Al Ghanim, Director General of the Telecommunications Regulatory Authority (TRA), the UAE's AED60 billion telecoms market is set to grow 20 per cent annually, with smart devices at the leading edge. Al Ghanim was addressing industry leaders at Mecom, the region's leading event for next generation ICT solutions. "The UAE telecoms market has grown from AED30 billion to AED60 billion since 2005. The market will continue to grow by 20 per cent annually, which will be driven, in part, by sales of smart phones and devices which will double this year," said H.E. Mohamed Nasser Al Ghanim, Director General of TRA. Al Ghanim was clearly making reference to the new Andriod smart phone software, which is due to launch in the UAE later this year. Indeed he went on to say that it would be these types of smart application that would drive the market and he saw the TRA's role to encourage investment and to provide regulation only where necessary. "We want the market to thrive and we will only create regulation where there is dominance. We want to develop a flexible competitive framework, which encourages the development of new products. However, when new packages are launched, we will ensure that complete transparency is in place to avoid misleading claims," added Al Ghanim. According to US-based company, CommScope, an exhibitor at Mecom, Abu Dhabi is the ideal location for the event, particularly now that it had unveiled its vision for 2030 that bodes well for the ICT industry, especially infrastructure.

Jordan: ICT blooming

Jordan may have little in the way of oil or gas, but the country is overcoming nature's shortfalls by building resources of its own, creating an information and communications technology (ICT) sector that is fast becoming a mainstay of the economy. The importance of the ICT industry, and the progress made by the sector over the past decade, were underscored in a report commissioned by the government at the end of last year. Prepared by Y-Consult and Dajani Consulting for the Ministry of ICT, the study showed the sector represented 14.3 per cent of GDP in 2008, making it one of the largest single contributors to the economy. Just as significantly for an economy that has to provide enough jobs to meet the demands of a growing labor force, the expansion of the ICT industry had resulted in some 80,000 new positions being created between 1999 and 2008. Of these, the report said, 16,650 were direct jobs within the industry, a further 49,852 were indirect jobs and the remaining 15,365 were listed as induced positions. While highlighting the successes of the industry, the report also stressed the need for additional measures to ensure the advantages created by Jordan's ICT sector flowed on to other segments of the economy. These measures included steps to further integrate the ICT sector with other fields, increasing the awareness on how ICT can play a greater role in boosting revenues, and encouraged e-content creation and e-commerce practices. The need to increase the take up of ICT across the economy is one of the challenges facing Jordan's new minister of ICT, Marwan Juma. Appointed in mid-December, Juma held a series of senior positions in the private sector, serving as chief executive officer of mobile phone company Xpress Telecommunications, chairman of industry lobby int@j and founder and chairman web development firm Dot.Jo. The ICT minister understands that several issues must be tackled in order to optimize the sector. "We need to address the national capacity, work on the national broadband network, lower the price of WiMAX, lower the price of frequency outside the capital city for wireless technologies, and bring in NTE and 4G as well," he told OBG Although the government is firmly committed to promoting the use of IT, a recent report by the World Economic Forum (WEF) suggests that the country's business community is lagging somewhat in adopting and adapting these new solutions to its existing problems. (Source: OBG)

Qatar’s Qtel signs US$2bn refinancing loan

Qatar Telecommunications Co (Qtel) has signed 17 more banks into its US$2 billion syndicated loan, scaling back commitments provided by senior lenders already on the deal, the arranging banks announced. As previously reported, 14 senior banks fully subscribed the deal in April and then launched the loan to general syndication to scale back their exposure. The arrangers said more than US$1.1 billion was raised in general, and in excess of US$3.8 billion overall. The loan will result in Qtel reducing its borrowing costs, refinancing a US$2 billion forward start loan agreed last September. The new deal is split between a US$1.25 billion, three year tranche that pays a fully drawn margin of 125 basis points (bps) over LIBOR and a US$750 million, five year tranche that pays a fully drawn margin of 155 bps, bankers told RLPC in April. That compared with a margin of 250 bps over LIBOR on last year's US$2 billion forward start loan and 22.5 bps over LIBOR for the original three year, US$2 billion revolving credit facility agreed in November 2006. Initial mandated lead arrangers and book-runners on the new loan are BNP Paribas, DBS, Qatar National Bank, Societe Generale and Royal Bank of Scotland.

Etisalat to invest US$1.4bn in Egypt

"Our investment in the network has reached (Egyptian pound) EG£8 billion to date, and we expect that we will invest EG£8 billion more in the coming three years as networks expansion is a 'priority' for the company," Mohammad Hassan Omran said in a statement. Omran said the customer base for Etisalat Misr reached 14 million within three years of operation that started in May 2007. "The company's achievements exceeded all expectations in terms of subscription rates and what was targeted in the bid conditions and feasibility studies in terms of network coverage," he said. Etisalat Misr achieved during the first two years what was planned to be achieved in the five years. "We built a state of the art network and started working in a very limited time," he said. Etisalat now operates in 18 markets serving 107 million customers covering around two billion customers. "Etisalat's strategy is to develop a significant international footprint and to benefit from economies of scale. This will serve for the future and provide satisfying returns for our investors,” he said. However this desired growth cannot be achieved by having a presence in one market only and requires more operations and investments in markets that are open for growth and development.

Dubai: Telecoms competition

Dubai's homegrown telecommunications operator, Emirates Integrated Telecommunications Company (Du), is looking to step up competition with the long-established market leader, Emirates Telecommunications Corporation (Etisalat). Du is seeking to expand the range of services it offers in an effort to woo new customers and retain the loyalty of its existing client base. Du announced in April that it intended to increase its capital through a US$272 million issue of shares to its present stockholders, a move the firm said would allow it to bolster its existing networks. According to Du chairman Ahmad bin Byat, the issue was part of the long-term process of developing the company into a major player in the telecommunications sector. "One of our goals is to transform Du from a high-growth, early-stage venture to a more mature company with efficient management of future funding requirements," bin Byat told local media when unveiling the planned issue. "The capital raised through this rights issue will provide the necessary first step." The company intends to use most of the capital it raised to improve its internet and social networking platforms rather than seek to expand beyond its home market, the chief executive officer, Osman Sultan, said in an interview with local media. "We will focus on growing within the UAE, and for the time being have no plans to speed up growth through overseas forays or acquisitions," Sultan said. "We have no plans to move outside the UAE in our core businesses of telecoms. The timing and existing scene wouldn't allow us to create the right value for our shareholders." (Source: OBG)

e-Reader could revolutionize Arabic content

The e-Reader revolution has brought about a quantum shift in digital content creation worldwide, promoting the sharing of knowledge. This digital content revolution is not limited to popular mainstream content, but is also contributing to the academic e-reader usage, according to A.T. Kearney, one of the world's leading consulting firms. "Writing and publishing a book using the digital publishing platform is much easier, giving access to the budding authors to create new content in an inexpensive manner and still find a wide audience," said Anshu Vats, Head of A.T. Kearney's IT Practice in the Middle East. As textbooks become more available on-line, the range of books available to students becomes wider and easier affordable. Adopting and promoting this revolution of e-Reader and digital content creation could benefit the GCC region significantly. It will allow for Arabic content to be created and distributed in a cost effective manner. Despite 250 million Arabic speaking people in the world only 1 per cent of digital content is produced in Arabic. "Open adoption and promotion of these new technologies by the government and regulatory authorities in the GCC region will encourage current initiatives to create more Arabic content and may spur a growth of regional entrepreneurs in this area," commented Vats. Microsoft's recent efforts in creating new Arabic translation technologies or the Egyptian initiative Sarmady, partnering with NBA.com to create Arabic content for the regional market, are at the forefront of these developments. However, according to A.T. Kearney, the key benefactors in the region could be the traditional newspapers and community publications, which are well read but suffer due to poor distribution infrastructure. E-Reader based distribution could boost the media market in the region by 20-25 per cent.