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Jordan Telecommunications Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2009 Product Code: R302-8531 Description BMI’s latest update on Jordan’s telecommunications market contains new regulatory data on the size ofthe Jordanian telecoms sector at the end of 2008. It also includes mobile customer data published by thecountry’s three leading mobile operators, Zain Jordan, Orange Jordan and Umniah (owned byBahrain’s Batelco), which shows how the mobile market developed in the first half of 2009. Followingimpressive mobile customer growth of 18.2% in 2008, the first three months of 2009 saw negative growthin the mobile sector. Jordan’s largest mobile operators, Zain and Orange, both reported a loss ofcustomers in Q109. As a result, Jordan’s mobile customer base shrank by 0.4%. The loss of mobilecustomers 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 mobilecustomers use their service. Specifically, the first quarter of 2009 saw a notable increase in the number ofprepaid users not using their mobile phone for longer periods of time; this led to a greater number of usersfalling into the 90-day inactive category. The Jordanian mobile subscriber market grew by 3.2% in the first six months of 2009. BMI nowanticipates growth of 6.9% for the year as a whole. By the end of 2009, we predict that Jordan’s mobilepenetration rate will rise to just over 95%. Meanwhile, in August, Jordan’s TelecommunicationRegulatory Commission (TRC) awarded a 3G licence to Jordan Telecom’s Orange. The decision toaward a 3G licence to Orange can be welcomed as an important step towards the launch of 3G mobileservices in Jordan. However, it is notable that Orange will benefit from a period of 3G exclusivity lastingfor one year. During this time, other cellcos will not be able to offer 3G services. Although this willundoubtedly benefit Orange, giving the operator a head-start in the 3G services market, it could alsocontribute to a less competitive 3G market in the long term, making it much harder for rivals to catch upwith Orange. In addition to 3G licensing, another notable development in the Jordanian telecoms market concerns ZainJordan’s future ownership. It was reported in June that shareholders in Palestine’s PalestineTelecommunications Company (Paltel) had given their backing to a proposed merger with Kuwait’sZain Group through a share swap. According to the merger agreement, Zain Group and othershareholders in Zain Jordan will acquire a combined 58.6% stake in Paltel in exchange for Paltel’s fullacquisition of Zain Jordan. The merger is expected to lead to efficiencies and economies of scale for thetwo operators, helping to expand coverage, as well as the Zain One Network services for Palestiniansubscribers. Jordan has moved from sixth to seventh position in BMI’s Business Environment Rankings for theMiddle East. Jordan’s overall score has fallen as a result of weaker Telecoms Market and Country Riskscores. Table of Contents
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