Market Brief for Egypt
The communication and information technology (CIT) market has grown rapidly in the last few years. The formation of a dynamic and ambitious Ministry of Communications and Information Technology (MCIT) (www.mcit.gov.eg) in 1999 gave this sector a visible, and much-needed, boost. Egypt has a strong presence in the international IT scene. It had a substantial presence at ITU Telecom World 2003 and in the first World Summit on the Information Society (WSIS), also in 2003. In the latter, President Mubarak personally headed Egypt’s high-level official delegation to show Egypt’s determination to create an IT society and to bridge the “digital divide.”
The Egyptian telecommunication sector is one of the most developed in the MENA region. Telecom Egypt (TE) (www.telecomegypt.com.eg) , Egypt’s state telecommunications company, expects to add one million telephone landlines each year through 2007. The capacity of local public switching exchanges is 11.7 million lines. Telephone main lines in operation are 9.2 million. The Telecommunication Regulatory Authority (TRA) (www.tra.gov.eg) is the governmental regulatory arm for the country’s telecommunications sector. Two private sector companies Mobinil (www.mobinil.com) and Vodafone (www.vodafone.com) provide services for the country’s GSM 900 cellular telephone system. As of May 2004, cellular phone users numbered 6.5 million. There are 48,971 public pay phone cabins operated by three companies. The Internet has been active since the early 1990’s, and after free Internet access was announced in January 2002, many additional Internet-related services were introduced and the number of Internet subscribers rose to 3.3 million by May 2004. The international bandwidth is 2 Mbps.
On the legislative front, in June 2002 the Egyptian Parliament passed an Intellectual Property Rights Law, although some implementing regulations remain unwritten or loosely enforced. In early 2003, Egypt signed the Information Technology Agreement; accordingly, Egyptian Government will abolish all duties and customs on IT-related products by 2005. The Unified Telecommunication Law passed in February 2003 regulates the different services provided by the Telecommunication Regulatory Authority, Telecom Egypt, and service providers - and protects national interests and users’ rights. E-signature law passed in the beginning of 2004.
Telecommunications equipment and services is a best prospect sector for U.S. businesses, which account for 87 percent of Egypt’s import market. Business opportunities are in wireless networks and solutions, Wi-Fi, Wi-Max, Voice over Internet Protocol (VoIP), once approved by TE, CDMA, DSL, GSM solutions and applications, and call centers.
For more information, please contact Senior Commercial Specialist Hend El Sineity, US Embassy Cairo, Hend.El-Sineity@mail.doc.gov .
Market Brief for Israel
The Israeli telecomm market is valued at $5 billion annually. Spurred on by an ever-increasing level of market penetration by cellular and Internet providers, the Israeli telecomm market has experienced a phenomenal growth rate of 91.8% since 1996. In 2003, high-speed Internet grew 14% and the wireless market grew 7%. Opportunities exist for U.S. exporters in almost all areas of the wireless and broadband industry. Many Israeli companies are active in developing and manufacturing telecommunications and networking equipment. Still, Israel imports over $1 billion of telecommunications equipment each year, of which $300 million is imported from the United States. In addition, over $100 million in telecom services are imported from the United States.
The Israeli Ministry of Communications is responsible for the implementation of telecommunications policy and regulation. The government recently approved a proposal for the establishment of the National Telecommunications Authority. This new intra-governmental body will be charged with regulating both the telecomm and broadcasting sectors. This new authority is expected to actually reduce regulation and inefficiencies within the industry, bringing the regulatory process more in line with that of most Western countries
Israel has 3.5 million direct exchange lines (a 50% penetration), using a 100% digital network belonging to Bezeq, the local carrier. There are 6.2 million mobile customers covering 90% of the population on four networks. All four cellular operators provide countrywide coverage and modern network services. Israel’s cellular market continues to grow. Text and data services are now available in SMS, WAP and IP formats, on GPRS and EDGE technologies.
Bluetooth and WiFi (Wireless Fidelity) have been in use by communications companies throughout the world, with the exception of a few countries including Israel. The frequency needed for these services, 2.4 ghz, had been used by Israel’s electronic warfare systems. However, the Israeli government recently approved the use of Bluetooth and WiFi and is spending around $2.5 million in order to protect its systems and allow this new technology to enter the marketplace.
As the cell phone market is reaching a level of saturation, the major cellular companies are now moving towards providing their customers with the latest in value-added services, such as content, news, data and the Push-To-Talk (PTT) service. Bluetooth and WiFi technologies which were only recently approved for use by the government, will grow exponentially as Israeli companies seek to provide location-based services in cafes, airports etc. Opportunities will emerge for suppliers of Bluetooth and WiFi compatible devices.
Internet usage continues to grow, currently reaching around 2.5 million people; high-speed Internet became the fastest growing segment of the telecommunications market. This has been a successful year with over 650,000 new high-speed Internet subscribers so far in 2004. Industry sources predict that 900,000 households will have high-speed Internet by year-end.
For more information about export opportunities please contact U.S. Commercial Specialist Sigal Mendelovich at sigal.mendelovich@mail.doc.gov
The U.S. Commercial Service in Tel Aviv, Israel, Phone: 972-3-5197491, Fax: 972-3-5107215
Market Brief for Jordan
Jordan’s telecommunications sector offers ample opportunities for U.S. companies. Investment opportunities exist in several operating units of Jordan Telecom for fixed lines. U.S. firms may also find equipment sales opportunities in Jordan’s growing mobile phone sub-sector. Jordan’s telecommunications services and equipment market grew to around $70 million in 2004 and U.S. telecommunications-related exports in 2003 totaled around $ 250-300 million. Jordan is aiming for a 50% mobile telephone penetration rate by 2013.
Jordan Telecom is the only operator of fixed lines, although the monopoly ends on December 31, 2004. A public consultation is currently underway on the licensing regime that will apply in the liberalized environment. Out of a population of 5.6 million, there are about 680,000 fixed line subscribers in Jordan, a figure, which is growing at 2-3% per year on average. Significant mobile substitution has cut into growth of the fixed line. France Telecom owns a significant minority share of Jordan Telecom and controls the firm’s day-to-day management. In addition to fixed line service, Jordan Telecom also provides mobile service (below), Internet service and content integration through wholly-owned subsidiaries. Jordan seeks investors for services currently provided on a monopoly basis by Jordan Telecom, including international bandwidth provision and international voice gateways. The country is also interested in finding investors for international call centers and the establishment of alternate links connecting Jordan with Europe and beyond. The only existing cable link is through a Flag landing in Aqaba. It should be noted that 100% foreign ownership is permitted in Jordan.
There are currently around 1.4 million mobile phone subscribers in Jordan, and experts expect this number to increase significantly over the next several years. There are currently two mobile phone operators in Jordan, MobileCom (a subsidiary of Jordan Telecom which is 40% owned by France Telecom) and Jordan Mobile Telephone Services Company - Fastlink (wholly-owned by Kuwait/UK MTC-Voda fone). A third mobile operator is expected to be announced in the summer of 2004. Jordan’s Telecommunication Regulatory Commission (TRC) has initially licensed Umniah Telecommunications Company as the Kingdom’s third mobile operator. Around 67% of Jordan’s mobile phone customers subscribe to Fastlink with the remainder subscribing to MobileCom. XPress, Jordan’s new Integrated Digital Enhancement Network Technology (iDEN)-based network (radio communication and mobile services) began operation on June 6, 2004. This network uses push-to-talk communications through one-to-one or one-to-many calls that allows group communications of up to 100 subscribers with a push of a button. In addition to ordinary mobile phone services, such as telephone connectivity, SMS, and data exchange. XPress currently has 5,000 subscribers in a niche market focused on the trucking industry and the security sector among others.
According to FY 2003 figures, Jordan has 866,000 GSM/Cellular subscribers, resulting in 16.7 GSM subscribers per 100 inhabitants, 56.6% ot total telephone subscribers are GSM subscribers. Jordan has 680,000 fixed lines subscribers, resulting in 12.76 - fixed line subscribers per 100 inhabitants. Growth of subscriber 1995-2002 is 102.9%. Total number of internet users 234,000, users per 10,000 inhabitant is 451.56, estimated number of PCs per 100 inhabitant is 3.28
The Ministry of Information and Communications Technology (MoICT) is the Jordanian governmental entity responsible for articulating policy in the area of ICT, including telecommunications, post and information technology. Jordan’s Telecommunications Regulatory Commission (TRC) is responsible for the implementation of policy and regulation of the sector, including spectrum management, standards, and licenses. Jordan’s regulatory environment is advanced, particularly for the region. For updates about business opportunities and detailed information about the sector, U.S. companies are encouraged to visit the MoICT website and the TRC website .
For additional information, please contact, Commercial Specialist Muna Farkouh, Tel 962-6-590-6057, Fax: 962-6-590-0146, E-mail: Muna.Farkouh@mail.doc.gov
Market Brief for Lebanon
Lebanon has many advantages in the telecommunication sector (ICT), including a multilingual, entrepreneurial and skilled workforce, world-class advertising firms, multilingual media content providers and web portals, a "computer culture” connected to seven competitive Internet Service Providers, a robust 2,000 km fiber-optic PSTN backbone and two well-developed GSM cellular networks. Still, Lebanon has not developed adequate legal infrastructure for telecommunication. The government investment in telecom remains weak and there is no clear strategy.
Lebanon’s telecom penetration rates are relatively high: 23% for fixed and mobile line subscribers, 7% for internet users and 7% for installed computers. Additionally, adult literacy rate is estimated at 90 percent.
Lebanon’s telecom market size is estimated at USD 245 million. The telecom market has grown by an average 23% over the last five years. Lebanon's total telecom imports reached $47,707,019, $78,966,858 and $44,934,123 in 2000, 2001 and first seven months of 2002 respectively. Lebanon's total telecom exports reached $1,107,969, $2,182,656 and $1,549,740 in 2000, 2001 and first seven months of 2002 respectively.
Many American companies may capitalize on Lebanon’s labor and consumer strengths to provide consulting for communications infrastructure. Local expertise is limited when it comes to the design of infrastructure for broadband, security and physical connectivity and network management. Local development of telecom and computer consulting services may lead to additional purchases of computers, peripherals and communications equipment related to switching, routing, hubs and nodes. High-tech computer and telecom trade fairs in Lebanon also offer many opportunities for U.S. firms to expose their wares to a wider audience in the region.
The availability of superior and relatively cheap human resources offers the opportunity for U.S. companies to open software production facilities or outsource software development. Lebanese software developers are very good communicators, transparent and highly exposed to the outside world.
For more information about export opportunities please contact U.S. Commercial Specialist Naaman Tayyar at TayyarNA@state.gov
Market Brief for Turkey
Turkey’s telecommunications services and equipment market will be shaped with the recent introduction of full liberalization. Telecommunications Authority awarded 27 new long distance telephony service provider licenses in May 2004. These new operators will be competing with Turkey’s major fixed-line telecommunications provider, the state-owned and operated company, Turk Telekom http://www.turktelekom.com.tr . The full liberalization of telecom services in 2004 will increase the size of the market.
Turk Telekom has almost 20 million subscribers. It offers services in fixed line (voice), mobile, data and cable TV. A new telecom law has enabled the sale of 51% of Turk Telekom to foreign companies and the Privatization Administration (www.oib.gov.tr) will privatize majority of the shares of Turk Telekom in the near future. 11 foreign and local firms have already showed interest in Turk Telekom’s privatization. Turk telekom ranks 13th in the world in terms of telecom operator size and 5th in Europe. Furthermore, the value of the Turkish telecommunications market is estimated to be over USD 9 billion by the end of 2004. It is expected to grow to USD 16 billion in the next three years.
All regulation and supervision of Turkey’s telecommunications sector is done through the Telecommunications Authority (www.tk.gov.tr) . The Telecom Authority also issues licenses for the new operators, allocates frequency and approves telecommunications equipment imported into the country.
The GSM cellular services sector has gained a lot of popularity in Turkey. Penetration and subscriber rates for the Public Switch Telecommunications Network (PSTN) are dwindling while the GSM sector is experiencing growth. The PSTN sector experienced remarkable growth in the 1980’s in terms of subscriber numbers and coverage area. This growth has stagnated with the introduction of GSM services. The current penetration rate is 30% in PSTN services and is expected to increase with the introduction of fixed-line competition. The number of mobile subscribers, while 692,779 in 1996, has skyrocketed 40 times in 8 years to a total of 29,000,000 subscribers. The penetration rate in mobile services is almost 40%.
Currently, there are three cellular service operators in Turkey, Turkcell, Telsim, and AVEA (which is a merger of Aria and Aycell). Turkcell Authority (www.turkcell.com.tr) and Telsim (www.telsim.com.tr) and operate at 900 MHz GSM systems while AVEA (www.avea.com.tr) operates at a1800 MHz GSM frequency.
There are many commercial opportunities for interested U.S. telecommunications equipment and service providers especially related to the demand of the new private long distance carriers. Best prospects in Turkey include ADSL, voice and data transmission services, new fixed-line networks and Voice over Internet Protocol (VoIP) equipment as well as Wireless Local Loop networks. Third generation GSM networks, intelligent network management centers, operational and business support systems, billing, usage tracking, customer relationship management and call center systems, data network management systems, network security and disaster recovery systems are also on top of the list as export potential for U.S. businesses.
For more information, please contact Senior Commercial Specialist Serdar Cetinkaya, US Embassy Ankara, Turkey, Serdar.Cetinkaya@mail.doc.gov.
Market Brief for Morocco
The Moroccan telecommunication sector is one of the most developed in Africa. To become globally competitive, the Moroccan government placed information and communication technologies in the forefront of its national socio-economic development. The telecommunications industry has seen tremendous improvements through major structural reforms, including the separation of postal activities from telecommunications activities, and establishment of regulation, control and arbitration bodies for the telecommunications sector. The sector opened to competition with the award of GMPCS and VSAT licenses and of the second GSM license.
During the years 2001-2002, the fixed-line market experienced a slight decline due to the explosion of the cellular telephony but resumed increase and posted a 2.9 % raise in 2004. Maroc Telecom http://www.iam.net.ma, which started privatisation process in 2000 with the award of 35% of its capital to the Vivendi Universal group for $2.2 billion dollars, is presently the sole fixed-line operator, and is serving 1.2 million subscribers. Although Morocco ranks second in Africa (after South Africa) and third among Arab countries (after Egypt and Saudi Arabia), there are excellent opportunities for growth in rural areas and a large unmet demand for fixed line telecommunications, particularly for business, Internet and data services with offers for high speed connections.
The upcoming license planned for the end of 2004 and entrance of a new operator is expected to help Morocco achieve its objectives of increasing the fixed-line teledensity by 10% and entering the country into the digital society, with a target of 10 million Internet users by 2010. The privatisation of the Moroccan telecommunication market and the award licenses are under the authority of the regulatory agency, Agence Nationale de Réglementation des Télécommunications “ANRT” http://www.anrt.net.ma. ANRT designed the second Moroccan GSM license, awarded to the Spanish-led consortium “Meditel” [www.meditel.ma] in 1999 for $1.1 billion, which introduced the first fierce competition in the telecommunications marketplace. Under this license, Meditel ---and the incumbent operator Maroc Telecom--- had until 2003 to deploy their infrastructure before the issuance of a third GSM license. ANRT also allocates frequencies, approves telecommunications equipment imported into the country and settles disputes.
The Moroccan cellular market is one of fastest growing worldwide. Since the entrance of the second GSM operator, Meditel, the cellular growth rate has exceeded 200%. The subscriber base of the two existing mobile telephone license holders, Maroc Telecom and Meditel, has been growing fast, but there is still plenty of growth potential in the market with an existing penetration rate of the mobile telephony of 25.48%.
Current VSAT, GMPCS and mobile license holders mainly use U.S. equipment. According the DOC, “U.S. SME’s generated more than 36% of the known value of total U.S. exports to Morocco (2001), which was well above the total SME share of U.S. exports to the world (29% in 2001).” With the recent approval of the U.S.-Morocco Free Trade Agreement by both houses of Congress (July 2004), and the upcoming enactment and elimination of tariffs, U.S. companies will have excellent opportunities to offer high-tech equipment at competitive prices. As a first FTA with an African country, and the second with an Arab country, U.S. firms have exceptional opportunities to enter the African and Middle East markets through Morocco.
Morocco outlines telecommunications as the country's most strategic sector. The aim to expand the network coverage to 80% of the population, develop the teledensity, bring new technologies within education, administration and the private sector, e-commerce and government on-line offer excellent opportunities to U.S. firms to provide equipment in a wide range of areas, including but not limited to ADSL, fixed-line and mobile networks as well as solutions.
For more information, please contact Commercial Specialist Ms. Najia Tourougui, US Commercial Service, Rabat, Morocco, Najia.Tourougui@mail.doc.gov .
Market Brief for West Bank & Gaza
The Palestinian telecommunications sector was privatized in 1996 when the Palestinian Authority awarded an exclusive license to the Palestine Telecommunications Company (PALTEL) to operate and develop telecommunications services in the West Bank and Gaza. In 1998, PALTEL established the only Palestinian cellular company known as Palestine Cellular Communications, Ltd. Jawwal that uses GSM cellular networks. PALTEL and JAWWAL have invested over $240 million in the telecommunications sector. The Palestinian Ministry of Telecommunications and Information Technology is the governmental body responsible for regulating and monitoring the telecommunications sector.
PALTEL is a public shareholding company that is publicly traded on the Palestine Securities Exchange. The company is the only fixed line operator in the West Bank and Gaza that uses state-of-the-art technologies to offer subscribers with a range of services including local and international telephone services, access to the Internet, data communications, value-added services, and payphone services. Out of the 3.7 million Palestinians living in the West Bank and Gaza, there are currently about 260,000 fixed line subscribers.
JAWWAL is the first and only cellular service provider in the West Bank and Gaza that currently has more than 300,000 subscribers out of a total of 700,000. The other 400,000 Palestinians are using cellular service which is provided by Israeli companies. JAWWAL aims at expanding its infrastructure network to increase subscribers to more than 500,000 and has so far invested over $140 million in establishing a cellular network that covers all of the West Bank and Gaza. The company has now entered phase three and is preparing to increase the number of transmission stations to service 420,000 subscribers.
Demand for cell phones and telecommunication equipment is expected to grow in the near future as JAWWAL tries to reach its 500,000 target and have its services expand to cover a wider geographic area. Also, the needs and benefits of opening the cellular service market for international bids and having a second cellular operator in the West Bank and Gaza are growing considerably.
For additional information, please contact, Commercial Specialist Assad Barsoum, Tel: 972-2-625-4742, Fax: 972-2-623-5132, or E-mail: Assad.Barsoum@mail.doc.gov