Competition comes to Jordan's mobile market

Jordan's second GSM operator, MobileCom, is ready to go, and its CEO reckons competition will improve services and drive down prices.

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By  Barnaby Chesterman Published  September 13, 2000

Jordan’s mobile phone subscribers will be hoping for better services and lower prices following the formation of a second GSM operator, MobileCom.

For the last five years, FastLink has been the sole operator in the mobile phone market, achieving a fairly modest penetration rate of 130,000 subscribers from a population of 4 million.

Now, however, the government of Jordan has the privatisation and deregulation of monopolies and public sector industries high on its agenda. It’s all part of an effort to reform the stagnant economy and encourage inward investment at the same time as discouraging capital flight.

Nowhere is this change likely to be seen as much as in the telecommunications sector as King Abdullah tries to establish Jordan as the regional hub for information technology. First, France Telecom bought a 40% stake in the national telecommunications company, Jordan Telecom, through a partnership with Arab Bank. Then, Jordan Telecom purchased the GSM license for the second operator, establishing in the process a separate company, MobileCom, to run the GSM license, which will begin in September.

Fast Link’s monopoly is therefore soon to end amid allegations from MobileCom that it was overcharging customers and holding back the market. “The high subscription costs for post-paid along with the high tariffs for both pre-paid and post-paid lines have kept mobile communications out of reach for most of the population and in the hands of a few well to do,” said Jean-Luc Vuillemin, CEO MobileCom.

In all fairness, though, the former monopoly operator has been spurred into action ever since the announcement of a second operator. FastLink has cut call costs by about 30% and has attempted to improve subscriber relationships by introducing new services such as SMS and soon M-banking and WAP, while also eliminating tariffs on services such as caller ID and call waiting.

It has also moved to sell multi-brand handsets rather than just pushing Motorola handsets through its outlets. Once MobileCom, which is still in its pre-launch stage, officially enters the market, further reductions and improved services can be expected as competition hots up.

Vuillemin aims to attract about 25,000-40,000 subscribers by year-end and then double that figure in the next 12 months, although his ultimate objective is to achieve 50% penetration. “I think there exists a huge opportunity here for MobileCom,” he said. “By providing a new value network, by offering people the services they want at the price they want to pay and by addressing the fundamental needs of the market, we can grow very quickly.”

MobileCom intends to achieve these targets by offering a wide range of improved services at launch. These will include prepaid, post paid, SMS and data services while voice mail, caller identification and call forwarding will come as standard. “These services will be available to 94% of the Jordanian population at launch, a first for Jordan,” said Vuillemin.

“MobileCom will offer the fullest services achievable using GSM technologies, and will be introducing new services and service packages from the day we launch the network. The future of GSM is very exciting, with technologies such as Internet converging with mobile telephony to produce access to information anywhere, on a wide variety of devices. What’s more, GSM devices will interface to other digital devices to deliver true and full ‘information management’ capabilities to people wherever they are. MobileCom believes that GSM can provide the ‘glue’ which brings together a truly connected community in Jordan,” he continued.

It would appear, therefore, that throughout these developments in the telecoms industry in Jordan, the real winners are the customers. MobileCom was established to create a competitive environment within the industry that would see the development of mobile communications through improved prices and services.

“Competition is the single most important factor in the success and growth of the market and the driving force behind the improvement of prices and services being offered by any organisation, regardless of the industry in which it operates,” said Vuillemin. That means consumers can now look forward to a more mobile future and the operators themselves should benefit from a surge in demand for GSM services.

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