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Jordan Telecommunications Report Q4 2009
Market |
Telecommunications |
Report Type |
Market Research |
Country |
Jordan |
Published |
21 October 2009 |
Number of Pages |
81 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Jordan’s largest mobile operators, Zain and Orange, both reported a loss of customers in Q109
The latest update on Jordan’s telecommunications market contains new regulatory data on the size of the Jordanian telecoms sector at the end of 2008. It also includes mobile customer data published by the country’s three leading mobile operators, Zain Jordan, Orange Jordan and Umniah (owned by Bahrain’s Batelco), which shows how the mobile market developed in the first half of 2009. Following impressive mobile customer growth of 18.2% in 2008, the first three months of 2009 saw negative growth in the mobile sector. Jordan’s largest mobile operators, Zain and Orange, both reported a loss of customers in Q109. As a result, Jordan’s mobile customer base shrank by 0.4%. The loss of mobile customers was due to the deduction of inactive prepaid users from the operators’ reported customer totals.
One effect of economic recession in Jordan has been a reduction in the frequency with which mobile customers use their service. Specifically, the first quarter of 2009 saw a notable increase in the number of prepaid users not using their mobile phone for longer periods of time; this led to a greater number of users falling into the 90-day inactive category.
The Jordanian mobile subscriber market grew by 3.2% in the first six months of 2009. Growth is anticipated to total 6.9% for the year as a whole. By the end of 2009, we predict that Jordan’s mobile penetration rate will rise to just over 95%. Meanwhile, in August, Jordan’s Telecommunication Regulatory Commission (TRC) awarded a 3G licence to Jordan Telecom’s Orange. The decision to award a 3G licence to Orange can be welcomed as an important step towards the launch of 3G mobile services in Jordan. However, it is notable that Orange will benefit from a period of 3G exclusivity lasting for one year. During this time, other cellcos will not be able to offer 3G services. Although this will undoubtedly benefit Orange, giving the operator a head-start in the 3G services market, it could also contribute to a less competitive 3G market in the long term, making it much harder for rivals to catch up with Orange.
In addition to 3G licensing, another notable development in the Jordanian telecoms market concerns Zain Jordan’s future ownership. It was reported in June that shareholders in Palestine’s Palestine Telecommunications Company (Paltel) had given their backing to a proposed merger with Kuwait’s Zain Group through a share swap. According to the merger agreement, Zain Group and other shareholders in Zain Jordan will acquire a combined 58.6% stake in Paltel in exchange for Paltel’s full acquisition of Zain Jordan. The merger is expected to lead to efficiencies and economies of scale for the two operators, helping to expand coverage, as well as the Zain One Network services for Palestinian subscribers.
Jordan has moved from sixth to seventh position in the Business Environment Rankings for the Middle East. Jordan’s overall score has fallen as a result of weaker Telecoms Market and Country Risk scores.
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