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Pamela Ann Smith reports on recent developments in the region's rapidly expanding telecommunications sector.

Just as satellites have transformed television viewing in the Middle East and North Africa, the proliferation of privately owned wireless telecommunications companies in the region promises a new era in voice, fax, e-mail and multimedia services. While the initial costs may mean the services appeal more to business than residential users, the promise of inexpensive equipment, pre-paid cards and cheap payphones for all, even in rural areas, is expected to revolutionise the way people communicate with each other.

The first major development began in the mid-1990s when some pioneering ministries and state telecommunications corporations opened their doors to private mobile phone operators. In Lebanon, LibanCell and Cellis won a 10-year concession in 1995 to provide mobile phone services. Since then, they have invested some $250 million to build networks throughout the country. Both benefitted from the technology and expertise made available by their foreign partners Finntel of Finland in the case of LibanCell and France Telecom with Cellis.

State-of-the-art equipment from the German conglomerate, Siemens, Ericsson of Sweden, Alcatel of France and Motorola of the US enabled the two companies to set up digital Global Standard for Mobile (GSM) communications that allowed users to easily access other parts of the world.

This standard gradually replaced the previous analogue versions of cellular phones which state companies in Bahrain and Kuwait had installed, but which were limited in terms of access and global reach. While Bahrain and other state companies, notably in the UAE, Kuwait, Jordan and Qatar, moved rapidly to install GSM systems, the costs tended to be high, with the result that users were often limited to government institutions, commercial users and affluent urban residents.

Today, the picture has changed dramatically, as competition has sparked wider consumer choice and a greater variety of services. In Egypt, the advent of privately owned providers, such as the Egyptian Company for Mobile Services (MobiNil), has brought about a huge increase in demand as costs have come down. Two of its partners, Motorola and the locally-owned Orascom Technologies, are now extending their operations to countries such as Jordan, which established its Fastlink service in 1994 which now has 75,000 subscribers. Together, the companies are negotiating with the state-owned Jordan Telecommunications Company (JTC) to achieve another reduction in charges.

Governments that were initially concerned about the fall in telecoms revenues that would result from full-scale privatisation are now more convinced that opening their doors to private operators can, in fact, produce even more funds for their coffers. In Lebanon, for example, the two mobile phone operators paid some $180 million to the Treasury in 1998 as part of their licensing and tax agreements. Net profits at Qatar Telecom (Q-Tel) rose 14.2 per cent in the first half of this year, thanks in large part to a flood of new GSM subscribers. This has benefitted the company's new private shareholders and enabled the company to begin reducing the costs of international calls for both fixed and mobile links.

As a result, sweeping privatisations of state telecoms sectors are now planned in countries such as Saudi Arabia, Oman, Egypt and Morocco. Countries that have lagged behind, such as Syria and Yemen, are also rushing to respond to demands from both business and private phone users for up-to-date services, although it will still be some time before they can catch up.

Meanwhile, advanced new wireless services are being promised by Thuraya, the satellite communications company which is being set up with the help of the state concern, Emirates Telecommunications Corporation (Etisalat), in the United Arab Emirates. If all goes to plan, its first satellite will be launched in May, followed by the beginning of commercial services in September next year.

Its services will consist of voice, short messaging, data and fax as well as a global positioning system (GPS). More than 99 countries spanning Europe, North and Central Africa, the Middle East, Central Asia and the Indian subcontinent will fall within the range of its coverage.

Most importantly, the satellite link, together with a combination of dual-and triple-mode GSM phones, car kits, fixed home units and payphones, will allow wireless connections from many places in the region that are now either totally lacking in telephone lines or which have had no access to urban mobile phone networks.

Aside from Etisalat, Thuraya's partners include Oman's General Telecommunications Organization, Yemen's Public Telecommunications Corporation, Q-Tel, the Bahrain Telecommunications Company (Batelco), Egypt Telecom, Morocco's Itissalat Al-Maghrib, Tunisie Telecom, the Sudan Telecommunications Company (Sudatel), the pan-Arab Arab Satellite Communications Organization (Arabsat) and the private Kuwaiti concern, Mobile Telecommunications Company. While users will gain from greater access and convenience, many of these operators say that the satellite link will enable them to provide services to customers throughout their countries at lower costs and without the need to install expensive terrestrial infrastructure.

The opening of state telecoms sectors to foreign operators is also making even more advanced equipment and services available, such as those which the London-based satellite company, Inmarsat, has launched this year. These include a portable satellite phone unit the size of a notebook computer that weighs about nine pounds. It will offer fast ISDN connections at a speed of 64 kilobits per second, the kind that are needed for full-scale Internet and multimedia access.

The unit will allow corporate IT networks to integrate with global satellite mobile communications to service their customers, suppliers and manufacturers wherever they are in the world, using a wide range of desktop software. They are especially expected to appeal to professional and business customers, reports Mohammed Al-Amin, Inmarsat's regional director for the Middle East and North Africa in Dubai, such as those working for international oil, petrochemical, mining and construction companies, as well as financial and insurance staff and government health, safety and security officials who work in remote areas.
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Author:Smith, Pamela Ann
Publication:The Middle East
Geographic Code:70MID
Date:Nov 1, 1999
Previous Article:FINANCIAL REPORT.

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