The GCC countries have benefited to differing degrees, depending on their reserves, from the very high oil and gas prices. Even countries with less oil such as Bahrain or the emirate of Dubai have benefited from the wealth coming into the region. All countries realise the need to use the bonanza to upgrade their infrastructure. They are also keen to increase the 'knowledge component' of their economies as a bulwark against a potentially less profitable future. All of these factors have had a strong bearing on their telecoms industries. In addition, all the GCC countries have liberalised their markets to a greater or lesser degree, resulting in much greater competition, particularly in the mobile sector. This trend towards greater competition is still continuing, extending into the fixed-line and Internet sectors.
The markets of Iraq, Yemen and Iran are much less developed but are all quite exciting. In Iraq, the mobile market has been one of the great successes of the post-war period, growing from nothing to 44% penetration in four years. This is partly a result of very little fixed-line infrastructure. Three quite equal operators were competing in the market but after the award of longer-term licences there are now three much less equally sized players, which will possibly result in a less competitive and more expensive market. The lack of development in Iran is government induced rather than a result of economic factors. Since the launch of a second mobile operator in September 2006, this sector at least has been transformed with annual growth of over 100%. The broadband and Internet sectors are very different due to government restrictions on competition, speeds and services. The government is intending to introduce a level of private ownership into the incumbent operator and it will be interesting to see what effect this will have. Yemen, with GDP per capita of only around US$1,000 is nevertheless also experiencing healthy growth in its mobile market.
*The GCC countries are investing in NGN infrastructure, with FttH becoming a reality, particularly in the smaller and more urban countries. Broadband penetration levels do not appear high but improve once larger household sizes are accounted for. Household broadband penetration in the UAE is at least 40%.
*Zain of Kuwait and Etisalat (News - Alert) of the UAE have continued their expansion abroad. Zain now operates in 20 countries and Etisalat in 16, in the Middle East, Africa and Asia. Etisalat claimed to be the fastest growing mobile operator in the world in 2008, with a proportional mobile subscriber base of 24.2 million, an annual increase of 106.41%.
*Qtel (News - Alert) of Qatar is also expanding rapidly abroad, also with interests in 16 countries (most of them acquired in 2007), although as yet with a smaller subscriber total than Etisalat or Zain. STC of Saudi Arabia has aspirations to join the club, with new interests in Kuwait, South Africa and Turkey.
*The remarkable regional DTH satellite TV market continues unabated, with around 300 FTA channels plus pay TV operators. Despite many channels being launched for political rather than commercial reasons, the competition is generating some very interesting players ¨C news channels Al Jazeera and Al Arabiya and more entertainment-oriented channels from Rotana and others.
*The launch of services by MTN (News - Alert) Irancell has transformed the Iranian mobile market, causing annual growth of over 100%, hugely greater availability of services and introduced a degree of transparency to the market.
*All countries have licensed at least two mobile operators. A third licence has been granted for Kuwait, while in Bahrain an auction for a third licence in imminent.
*Saudi Arabia¡¯s third mobile operator, Zain, is about to launch operations into an already very competitive market. Saudi Arabia will see major players STC, Etisalat and Zain go head to head.
*Of the many new licences auctioned in the region in the past few years, the second Qatari mobile licence was the first to go to a European operator. Vodafone (News - Alert) Qatar expects to launch services early in 2009.
*Since the introduction of competition to the UAE mobile market, penetration rates have leapt to nearly 170%. Growth rates in all countries tend to reflect the degree of competition in the market rather than the penetration levels.