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Middle East - Mobile Network Operators and MVNOS

  • March 2016
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 95 pages

Mobile communications in the Middle East critical to progress
There are a number of countries across the Middle East offering progressive and increasingly competitive mobile markets. Saudi Arabia, Jordan and Israel, for example, offer highly competitive mobile markets while Kuwait, Qatar, Bahrain and the UAE have high mobile penetration leading to an increased focused on mobile broadband offerings. On the whole, mobile communications has become critical to progress in the region – it has become a key sector for attracting foreign and public investment; it contributes roughly 4% to GDP each year and generates a large amount of employment.

Kuwait has one of the highest mobile penetrations in the Middle East and represents a bright spot amongst a region marred by civil tension. The mobile operators in Kuwait are forging ahead and developing both infrastructure and services, with the three major operators of Zain Kuwait, VIVA and Ooredoo all offering LTE services and deploying or exploring LTE-A services.

Bahrain’s mobile market is serviced by three Mobile Network Operators (MNOs) and subscriber numbers continue to show strong growth despite a highly penetrated market, indicating multiple SIM card ownership among consumers. The saturated mobile voice market has led to the mobile operators increasingly concentrating on mobile broadband, content and application services for revenue growth.

Iran has seen huge growth in mobile subscriber numbers in response to competition, and current penetration levels indicate room for continued revenue growth. Mobile data services are available but still account for a small proportion of total revenue.

Overall, the ongoing civil conflict has created a challenging environment for operators in Iraq with the destruction of infrastructure, fluctuating subscriber bases and resulting revenue declines all adding significant pressure. However in the longer term - the Iraq telecoms market offers many opportunities once the civil unrest stabilises and the government and operators are able to focus again on telecoms and digital growth. Mobile data services will increasingly underpin future revenue growth and in 2016 operators are beginning to make more attractive service offerings available.

Factors that have helped drive competition in Israel include full mobile number portability and regulatory barriers that encourage competition. This has led to operators to focus on mobile data and content opportunities as well as on operating costs, resulting in a number of infrastructure sharing agreements. Cellcom, Pelephone, Orange, Golan Telecom, Hot Mobile, and Marathon Mobile all won spectrum in a 4G LTE auction concluded in January 2015.

Competition in Saudi Arabia’s mobile market has increased significantly with both the introduction of MVNOs; along with a reduction in Mobile Termination Rates (MTRS). It has become one of the most competitive mobile markets in the Middle East, and as a result the pre-existing operators are all feeling the pressure with Saudi Telecom Company (STC), Mobily and Zain all reporting profit losses during 2015.

Jordan also offers a very progressive and competitive mobile market. In 2015 mobile broadband development took a further step when 4G LTE services became available. Zain Jordan was the first operator to be awarded a 4G license and has installed over 1,000 sites. Orange Jordan also launched 4G LTE in mid 2015.

Mobile penetration in the UAE is among the highest in the world, largely due to the country’s affluence as well as to a significantly sized and fluid population of expatriate workers. Often, consumers own more than one SIM card to take advantage of promotional offers. The mobile market is served by a duopoly comprised of incumbent Etisalat and competing operator du. Both operators are majority owned by the government and Etisalat is the mobile market leader, with around 54% of the country’s mobile subscribers.

Mobile services in Lebanon are provided by Alfa and MTC Touch over the government owned networks. Both operators launched 3G/HSPA services in October 2011, followed by 4G LTE networks more recently – however 4G is yet been deployed nationwide.

Oman citizens enjoy access to a well established mobile sector. Improvements to 4G infrastructure are underway with both operators; Omantel (Oman Mobile) and Ooredoo Oman recently acquiring spectrum in order to continue expansion plans throughout the country. LTE services have been available in Oman since 2012. Competition is set to increase with Oman’s Minister of Transport and Communications announcing in 2016 it was looking to license a third mobile operator.

Mobile penetration is high in Qatar and while such levels might suggest that there is little room for new competitors in the mobile market, the very fluid and rapidly expanding population due to the large number of expatriate workers creates considerable opportunity.

Prepaid services have been instrumental in encouraging mobile take up by the mass market in Syria. However penetration rates are still relatively low and Syria has been in the midst of civil war for a number of years.

The mobile penetration rates in Yemen also indicate there is much room for growth, with prepaid services accounting for the majority of subscriptions. However, similar to Syria, in 2016 mobile services are being impacted upon by the ongoing civil unrest which has seen attacks on various telecoms towers and communication outages across the board.

Turkey possesses one of the largest mobile markets in the region due to its large population. Mobile penetration has reached levels indicative of a mature market. Healthy infrastructure-based competition exists between three mobile network operators that have built GSM/HSPA networks. In 2015 the three incumbent operators, Vodafone, Avea and Turkcell all obtained LTE licenses across the various frequencies.

Key developments:
In September 2015 Batelco announced it had successfully launched the first VoLTE services in Bahrain, in conjunction with Ericsson.
With 3G networks in place and 4G LTE also on offer in Iran; the focus for mobile data is beginning to shift to mobile broadband offerings.
Iraq’s telecommunications sector began on a positive note in 2015 with the roll-out of 3G services by the three major mobile operators – Zain Iraq, Asiacell and Korek Telecom. In late 2015 the regulator invited potential bidders to submit applications for a mobile fourth license.
The Israeli mobile market has seen a decline in the number of MVNOs in recent years. In January 2016 Partner Communications opted to terminate its licensing deal with Orange.
The introduction of higher mobile taxes in the past couple of years did not please Jordan’s major operators, which include Zain Jordan, Orange Jordan and Umniah – and this change has been partly blamed for declining revenues.
In February 2016 Saudi Arabia’s STC gained the majority ownership of Kuwait’s VIVA.
Etisalat and du have both deployed sophisticated HSPA+ and LTE networks across the UAE. Smart phones are becoming increasingly popular, accounting for close to two thirds of the country’s mobile handsets.
In January 2016 Batelco announced it had received a non-binding offer for Umniah.
An open international tender announcement was made by the Lebanese government in June 2015 for the management contracts of Alfa and MTC Touch. However in December 2015 the tender had passed without a decision being reached and the existing contract holders (Zain and Orascom) were given renewed short term contracts in 2016 while the matter is resolved.
In 2016 Oman’s Minister of Transport and Communications announced it was looking to license a third mobile operator.
Prior to the current civil crisis; Yemen was making strides to improve its telecoms infrastructure. For example, new transmission stations were being installed to support WiMAX. However the status of much of this infrastructure is now unclear, given the reported destruction that has taken place across the war-torn country.
In June 2015 the CRA announced Qatar would have mandatory reductions to roaming charges for voice calls, SMS, and mobile data coming into initial effect on the 1st of April 2016.
In January 2015, both Syriatel and MTN Syria were awarded long-term freehold licences by the Syrian authorities, valid until December 2034. These replace the previous build, operate and transfer arrangement.
Turkcell trialled VoLTE in conjunction with Ericsson in Turkey during 2015.

Companies mentioned in this report
Mobile Telecommunications Co (MTC) / Zain, Ooredoo Kuwait (previously National Mobile Telecommunication Co (NMT) / Wataniya Telecom), Kuwait Telecom Company (KTC) / Viva, Batelco, Zain Bahrain, Viva Bahrain, Telecommunication Company of Iran (TCI), Mobile Communications Iran (MCI), MTN Irancell, Tamin Telecom (Rightel), Mobile Telecommunications Company of Isfahan (MTCE), Telecommunication Kish Company (TKC), Iraqi Telephone and Postal Company (ITPC), Asiacell, Zain Iraq, Korek Telecom, Regional Telecom, Cellcom, Orange (Partner), Pelephone (Bezeq), HOT Mobile, Golan Telecom, Rami Levy, Jordan Telecom Group/Orange, Zain Jordan, Batelco/Umniah, Saudi Telecom Company (STC)/Bravo, Integrated Telecom Company (ITC)/Bayn Consortium, GO Telecom/Etihad Atheeb, Mobily/Ettihad Etisalat/Bayanat Al-Oula, Zain KSA, Lebara KSA/Etihad Jawraa, Virgin Mobile Middle East & Africa (Virgin Mobile MEA), Axiom Telecom, VIVA, Etisalat, du, Jordan Telecom Group/Orange, Zain Jordan, Batelco/Umniah, MTC Touch, Alfa Telecom, Ooredoo Qatar, Vodafone Qatar, OmanTel, Ooredoo Oman, FRiENDi, Majan Telecom (Renna), Samatel, Syrian Telecommunication Establishment (STE), MTN Syria, Syriatel, Turkcell, Vodafone Turkey, Avea.

Table Of Contents

Middle East - Mobile Network Operators and MVNOS
1. Middle East mobile overview
1.1 Mobile statistics
1.2 Market trends
1.2.1 Increasing competition
1.2.2 MVNOs
1.2.3 Number portability
1.2.4 LTE
2. Bahrain
2.1 Market analysis
2.2 Regulatory issues
2.2.1 Second mobile licence
2.2.2 Third mobile licence
2.2.3 Prepaid subscriber registration
2.2.4 Roaming tariff reduction
2.2.5 MNP
2.3 Major mobile operators
2.3.1 Batelco
2.3.2 Zain Bahrain
2.3.3 Viva Bahrain / STC Bahrain
3. Iran
3.1 Market analysis
3.2 Regulatory issues
3.2.1 Third Mobile licence Tamin Telecom
3.2.2 Second GSM licence Irancell
3.3 Major mobile operators
3.3.1 TCI/Mobile Communications Iran (MCI)/Hamrah-e-Avval
3.3.2 MTN Irancell
3.3.3 Tamin Telecom (Rightel)
3.3.4 Taliya/Rafsanjan Industrial Complex Islamic Cooperative Company (RIC)
3.3.5 Mobile Telecommunications Company of Isfahan (MTCE)
3.3.6 Telecommunications Kish Company (TKC)
4. Iraq
4.1 Market analysis
4.2 Regulatory issues
4.2.1 Temporary mobile licences awarded in 2003
4.2.2 Permanent licences awarded in 2007
4.2.3 Fourth mobile licence
4.3 Major mobile operators
4.3.1 Asiacell Communications
4.3.2 Zain Iraq (formerly MTC Atheer)
4.3.3 Korek Telecom
4.3.4 Regional Telecom / Fastlink
5. Israel
5.1 Market analysis
5.2 Regulatory issues
5.2.1 Connection charges
5.2.2 Licensing
5.2.3 LTE Spectrum
5.2.4 Roaming
5.2.5 MTRs
5.2.6 Early termination fee reduction
5.2.7 MNP
5.2.8 Network sharing
5.3 Mobile operator statistics
5.4 Major mobile operators
5.4.1 Cellcom
5.4.2 Orange (Partner Communications Company)
5.4.3 Pelephone (Bezeq)
5.4.4 HOT Mobile
5.4.5 Golan Telecom
5.4.6 MVNOs
6. Jordan
6.1 Market analysis
6.2 Regulatory issues
6.2.1 Third GSM licence
6.2.2 3G licences
6.2.3 4G spectrum
6.2.4 SIM card registration
6.2.5 MTRs
6.3 Mobile operator statistics
6.4 Major mobile operators
6.4.1 Zain Jordan
6.4.2 Orange Jordan
6.4.3 Umniah
6.5 MVNOs
7. Kuwait
7.1 Market analysis
7.2 Regulatory issues
7.2.1 Third mobile operator
7.2.2 Mobile Number Portability (MNP)
7.2.3 Roaming tariff reduction
7.2.4 Spectrum refarming for LTE
7.3 Mobile operator statistics
7.4 Major mobile operators
7.4.1 Zain Kuwait
7.4.2 Ooredoo Kuwait
7.4.3 Viva
8. Lebanon
8.1 Market analysis
8.2 Regulatory issues
8.2.1 Overview
8.2.2 Lebanon's current mobile contracts
8.2.3 Open international tender 2015
8.3 Mobile operator statistics
8.4 Major mobile operators
8.4.1 Touch (operated by Zain)
8.4.2 Alfa
9. Oman
9.1 Mobile market analysis
9.2 Regulatory issues
9.2.1 Second mobile licence
9.2.2 Third mobile licence
9.2.3 Reseller/MVNO licences
9.2.4 Roaming
9.2.5 MNP
9.3 Mobile operator statistics
9.4 Major mobile operators
9.4.1 Oman Mobile Telecommunications (OMTC)
9.4.2 Ooredoo Oman
9.4.3 MVNOs
10. Qatar
10.1 Market analysis
10.2 Regulatory issues
10.2.1 Second mobile licence
10.2.2 Mobile virtual network operator (MVNO)
10.2.3 Roaming tariff reduction
10.2.4 NP
10.3 Mobile operator statistics
10.4 Major mobile operators
10.4.1 Ooredoo Qatar
10.4.2 Vodafone Qatar
11. Saudi Arabia
11.1 Market analysis
11.2 Regulatory issues
11.2.1 Award of second GSM mobile licence
11.2.2 iDEN contract awarded
11.2.3 Award of Third Generation (3G) licences
11.2.4 Award of third mobile licence
11.2.5 Roaming
11.2.6 MTRs
11.2.7 Mobile Virtual Network Operators (MVNOs)
11.3 Mobile operator statistics
11.4 Major mobile operators
11.4.1 Saudi Telecom Company (STC)
11.4.2 Mobily (Etihad Etisalat)
11.4.3 Zain KSA
12. Syria
12.1 Market analysis
12.2 Regulatory issues
12.2.1 Third mobile licence
12.2.2 Current BOT contracts/Long term free hold licenses
12.3 Major mobile operators
12.3.1 Syriatel
12.3.2 MTN Syria
13. Turkey
13.1 Market analysis
13.2 Regulatory issues
13.2.1 Overview ( recent general laws and regulations)
13.2.2 Third Generation (3G) licences
13.2.3 Third and fourth GSM licences
13.2.4 Significant market power (SMP)
13.2.5 MTRs
13.2.6 Mobile Number Portability (MNP)
13.2.7 Telsim privatisation
13.3 Mobile operator statistics
13.4 Major mobile operators
13.4.1 Turkcell
13.4.2 Vodafone (Telsim)
13.4.3 Avea
14. United Arab Emirates
14.1 Market analysis
14.2 Regulatory issues
14.2.1 Roaming tariff reduction
14.2.2 MNP
14.3 Mobile opeator statistics
14.4 Major mobile operators
14.4.1 Etisalat
14.4.2 du (Emirates Integrated Telecommunications Company)
15. Yemen
15.1 Market analysis
15.2 Regulatory issues
15.2.1 GSM licences awarded
15.2.2 Third GSM licence
15.3 Major mobile operators
15.3.1 MTN Yemen
15.3.2 SabaFon
15.3.3 TeleYemen/Yemen Mobile
15.3.4 HiTS Unitel/Y Telecom
Table 1 Middle Eastern countries mobile subscribers, annual change and penetration 2014 - 2015
Table 2 Middle East - leading mobile operators by subscribers and country 2014
Table 3 Bahrain - Accepted mobile number portability requests 2011 - 2014
Table 4 Batelco Bahrain subscribers 2011 - 2014
Table 5 Zain Bahrain revenue, EBITDA, CAPEX and ARPU - 2005 Q3 2015
Table 6 Zain Bahrain mobile subscribers 2005 - 2014
Table 7 MTN Irancell Revenue and CAPEX 2009 - 2014
Table 8 MTN Irancell Subscribers, ARPU and MOU 2006 Q1 2015
Table 9 Iraq - Asiacell financial data (including ARPU) 2006 2014
Table 10 Iraq - Asiacell subscribers 2006 - 2015
Table 11 Zain Iraq financial data 2006 1H 2015
Table 12 Zain Iraq mobile subscribers 2006 Q2 2015
Table 13 Zain Iraq prepaid subscribers 2006 - 2014
Table 14 Iraq - Korek Telecom subscribers 2011 - 2014
Table 15 Israel - Mobile operators' market share 2010 - 2014
Table 16 Israel - Cellcom Revenue and Operating Profit 2005 Q2 2015
Table 17 Israel - Cellcom Subscribers, MOU and ARPU 2005 - 2014
Table 18 Israel - Orange Revenue and Operating Profit 2005 Q2 2015
Table 19 Israel - Orange Subscribers, MOU and ARPU 2005 - 2014
Table 20 Israel - Pelephone Revenue and Operating Profit 2003 - 2014
Table 21 Israel - Pelephone Subscribers, MOU and ARPU 2005 - 2014
Table 22 Israel - HOT Mobile Subscribers and ARPU 2010 - 2014
Table 23 Jordan - Mobile Termination Rates 2010 - 2014
Table 24 Jordan - Mobile operators, subscribers and annual change 2015
Table 25 Jordan - Mobile operators' market share 2004 2015
Table 26 Zain Jordan financial data (including ARPU) 2005 1H 2015
Table 27 Zain Jordan prepaid/postpaid mobile subscribers 2005 - 2014
Table 28 Orange Jordan revenue, ARPU, and subscribers 2006 - 2014
Table 29 Jordan - Umniah subscribers 2008 - 2015
Table 30 Kuwait - Mobile operators' market share 2005 - 2014
Table 31 Kuwait - Mobile operators, subscribers and annual change 2014
Table 32 Kuwait - Zain Group subscribers, revenue and profit 2002 1H 2015
Table 33 Zain Kuwait revenue, income, ARPU and subscribers 2005 - 2014
Table 34 Ooredoo Kuwait financial data 2009 - 2014
Table 35 Ooredoo Kuwait prepaid, postpaid, and mobile broadband subscribers 2007 - 2014
Table 36 Kuwait - Viva revenue, net profit, EBITDA, and subscribers 2009 - 2014
Table 37 Lebanon - Mobile operators' market share 2004 1H 2015
Table 38 Lebanon - Touch prepaid and postpaid subscribers 2005 - 2014
Table 39 Lebanon - Alfa subscribers 2009 - 2014
Table 40 Oman - Mobile operators, subscribers and annual change 2014
Table 41 Oman - MNOs and MVNOs subscriber market share 2007 - 2014
Table 42 Oman Mobile revenue, ARPU, and subscribers 2006 - 2014
Table 43 Ooredoo Oman financial data (including ARPU) 2009 1H 2015
Table 44 Ooredoo Oman prepaid/postpaid mobile subscribers 2007 1H 2015
Table 45 Qatar - Mobile operators, subscribers and annual change Q1 2015
Table 46 Qatar - Mobile operators' market share 2009 - 2014
Table 47 Ooredoo Qatar financial data (including ARPU) 2009 - 2014
Table 48 Ooredoo Qatar - prepaid, postpaid, and mobile broadband subscribers 2007 - 2014
Table 49 Vodafone Qatar financial data 2009 - 2014
Table 50 Vodafone Qatar subscribers and ARPU 2009 - 2014
Table 51 Saudi Arabia - Mobile operators, subscribers and annual change 2014
Table 52 Saudi Arabia - Major mobile operators' subscribers and market shares 2005 - 2014
Table 53 Saudi Arabia - Bravo historic financial data 2007 - 2012
Table 54 Saudi Arabia - Bravo historic subscribers and ARPU 2007 2012
Table 55 Saudi Arabia - Mobily revenue and profit 2006 1H 2015
Table 56 Saudi Arabia - Zain KSA subscribers and revenue 2008 - 2014
Table 57 Syriatel Revenue and Net Profit 2005 - 2013
Table 58 MTN Syria Revenue and CAPEX 2009 - 2014
Table 59 MTN Syria Subscribers, ARPU and MOU 2009 - 2014
Table 60 Turkey - Mobile operators and subscribers 2014
Table 61 Turkey - Mobile subscribers by operator 2007 Q3 2015
Table 62 Turkey - Mobile operators' market share 2007 Q3 2015
Table 63 Turkcell group financial data 2005 - 2015
Table 64 Turkcell Turkey average monthly ARPU pre and postpaid 2001 - 2014
Table 65 Turkcell Turkey average monthly MOU and churn 2001 Q3 2015
Table 66 Turkcell smartphone penetration 2012 2014
Table 67 Vodafone Turkey financial data 2008 - 2014
Table 68 Vodafone Turkey pre and postpaid ARPU 2006 - 2014
Table 69 Vodafone Turkey smartphone penetration 2011 - 2015
Table 70 Turkey - Avea revenue, EBITDA, and CAPEX 2007 - 2014
Table 71 Turkey - Avea prepaid, postpaid and blended ARPU and blended MOU 2007 - 2014
Table 72 UAE mobile operators' market share 2010 - 2014
Table 73 UAE - Etisalat mobile subscribers and ARPU 2011 - 2014
Table 74 UAE - du mobile revenue 2009 Q3 2015
Table 75 UAE - du mobile subscribers and ARPU 2010 Q3 2015
Table 76 UAE - du mobile minutes of use (MOU) 2010 - 2014
Table 77 Yemen - MTN subscribers, ARPU, and market share 2005 - 2014
Table 78 Yemen - SabaFon subscribers 2004 - 2014
Chart 1 Israel - Mobile operators' market share at a glance - 2014
Chart 2 Jordan - Mobile operators' market share at a glance - 2014
Chart 3 Kuwait - Mobile operators' market share 2009 - 2014
Chart 4 Oman - Mobile operators' market share 2007 - 2014
Chart 5 Qatar - Mobile operators' market share 2009 - 2014
Chart 6 Saudi Arabia - Mobile operators' market share 2005 - 2014
Exhibit 1 Background information - Orascom Telecom Iraq Corporation/Iraqna
Exhibit 2 Historical Saudi Arabia - Bravo

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