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Qatar Telecommunications Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2009 Product Code: R302-8592 Description BMI’s latest update on Qatar’s telecoms market incorporates new operational and financial data for thefirst two quarters of 2009. According to the country’s incumbent operator Qatar Telecom (Q-Tel), thenumber of mobile subscribers grew by 14.2% in the first six months of 2009 to surpass 1.9mn. This givesQatar a mobile penetration rate of just over 131%. BMI believes that the mobile market harbours asignificant number of multiple SIM card owners and inactive prepaid users. These phenomena have theeffect of raising the country’s mobile penetration rate over and above the 100% mark.One of the most significant developments to have occurred in Qatar’s mobile market in recent weeks wasthe launch, in July, of full commercial operations by the country’s second national telecoms operator,Vodafone Qatar. The new operator launched commercial mobile services with an online promotion anda promise to add a prepaid product under the ‘Red’ banner to its existing range of ‘Flexi’ postpaidpackages. In September, Vodafone Qatar announced that it had reached 99% population coverage, addingthat it was confident of capturing 40-60% market share from Q-Tel within 10 years. The launch of commercial operations by Vodafone is already resulting in increased service innovationand consumer choice. For example, in September 2009, Vodafone Qatar proceeded to launch mobileinternet services in the country. However, one negative consequence of the increased competition is likelyto be a new downward pressure on mobile ARPU levels. In Q209, Q-Tel reported yet another fall in itsmobile ARPU, with the lower spending being driven by prepaid customers. Although Q-Tel postpaidARPU fared better, it is notable that postpaid customers account for just over 13% of Q-Tel’s totalcustomer base. With competition now established in Qatar’s mobile market, attention is turning to the fixed-line sector,which remains a monopoly under the control of Q-Tel. Nevertheless, this situation looks set to change,sometime before the end of 2009. In September 2008, Qatar’s regulatory authorities awarded a fixed-lineservices licence to Vodafone Qatar. In July 2009, media reports suggested that Vodafone was reportedlyplanning two separate fixed-line infrastructure deployments. Both deployments would form part of thePearl-Qatar project, a QAR50bn new-build island spanning 4mn km2, due for completion in 2012. However, although Vodafone Qatar is already preparing for the launch of fixed-line services, it should becautioned that the country’s telecoms regulator ictQATAR has yet to officially issue Vodafone Qatar withits fixed-line licence. Other developments in Qatar’s mobile market include the passage, in August 2009, of a new telecoms bylaw,which has been described by the country’s telecoms regulator as an important step in thedevelopment of the legal foundation for liberalisation of the telecoms sector. The by-law includesregulatory provisions on a range of subjects, including licensing, radio spectrum management,interconnection and access, tariffs, numbering and competition policy. Also in August, the regulatorannounced plans to issue three licenses for very small aperture terminals (VSAT). VSAT enablescommunication links via satellites between geographically dispersed sites. The VSAT licensing processwill start with a pre-qualification phase, with those who qualify being eligible to compete for a licence. This quarter sees a slightly lower overall score for Qatar on the back of a weaker Telecoms Market rating.The weaker Telecoms Market score reflects the continued downward trend which is currently affectingQ-Tel’s mobile ARPU. Despite this, Qatar remains in fourth position in our latest set of BusinessEnvironment Rankings for the region. Table of Contents
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