Middle East & North Africa Telecommunications

KUWAIT: In 1971, the Telecommunications Corporation (TCC) was set up to take over the day to day operations of the communications services such as telephone, telegraph and telex. TCC became a company and was renamed Jordan Telecom Co. on January 1997 and was registered as a private company. Jordan Telecom offers a broad spectrum of communications services such as internet services through its wholly owned Wanadoo and e-dimension subsidiaries as well as mobile services through MobileCom, also a subsidiary. In 2000, a 40% stake in the new entity was sold to a consortium of France Telecom and Arab Bank in a US$508mn deal. Since 23 January 2000, and upon privatising Jordan Telecom, government shares amounted to 60%, while JITCO, which is a holding company consisting of France Telecom (88%) and the Arab Bank (12%), owned 40% of its shares.
In April 2006, France Telecom increased its stake in the Jordanian subsidiary JITCO to 100% by buying the Arab bank’s stake. In July 2006, the government has sold another 10% of its shares in Jordan Telecom to the Kuwaiti Company Al Nour for Communications at a price of $164.4mn. In addition, the government sold another 10% stake in the company to the Gulf Finance House of Bahrain. France Telecom purchased an additional 11% stake to give itself a controlling 51% stake. Jordan Telecom is operated by France Telecom through a management agreement that has been in place since 2000, and was renewed in January 2005 and will continue for another three years until 2008.
The full deregulation of the telecom sector came in 2002 when the Telecommunication Regulatory Authority was set up to effectively offer licenses to anyone who could fulfil a certain criteria following the end of Jordan Telecom’s exclusivity period over the fixed market which ended in 2004. On the 21st of October. 2004, The Council of Ministers approved TRC’s proposed licensing program, which has fully opened the fixed telecommunications sub-sector to competition as of January 1st 2005.
Currently, the telecom sector in Jordan is highly competitive with a total of four companies offering GSM services; Fastlink, MobileCom, Umniah (recently acquired by Batelco Jordan) and Xpress. Uminah was granted the third GSM license and started operations in June 2005 while Xpress was awarded a class license and began operations in June 2004. In addition, Batelco Jordan was awarded the second fixed lines licence in Jordan in May 2005.
In January 2003, MTC acquired 91.6% of Fastlink in Jordan from Orascom Telecom for US$423.9mn, taking MTC’s ownership in the company to 96.5%. In June 2006, the Bahraini based leading telecom operator, Batelco Jordan acquired 96% of Umniah, the third GSM mobile operator in Jordan in a US$415mn deal. Batelco Jordan is one of the leading Internet and data service providers in Jordan and is expected to integrate voice, video and data services through delivering new products and services.
Comparing Jordan’s mobile markets to other markets in the region, the Kingdom is ranked the ninth in terms of the number of subscribers. However, it is ranked the fifth in terms of penetration rates which indicates the highly developed cellular market in the Kingdom. Jordan’s total number of mobile subscribers has grown from 389 thousand subscribers in 2000 to 3.13mn in 2005, which is approximately 3.6% of the total number of mobile subscribers in the MENA region estimated at 86.1mn in 2005. Jordan’s penetration stood at 57.2% in 2005 which is higher than the region’s average of 42.9%. In addition, Jordan has also four mobile operators, the highest number of mobile operators in a single country in the MENA region which had a total of 39 mobile operators distributed over 18 countries again indicating the highly competitive nature of the market. In terms of the fixed line market, Jordan had a total 691.2 subscribers, with Jordan Telecom having 98% market share of the Kingdom’s fixed line subscribers.
In terms of market shares for the Jordanian cellular market, Fastlink, the first company to introduce cellular services in the Kingdom back in 1995 had by the highest market share which stood at 64.4% followed the Jordan Telecom’s subsidiary, MobileCom 24%, Umniah 9.6%, and Xpress 2%.