Q-Tel mobile penetration rate to hit 70% says Arab Advisors

A newly released country report from the Arab Advisors Group fully analyses the Qatari communications market and its monopoly operator Q-Tel.

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By  Massoud Derhally Published  September 5, 2002

A newly released country report from the Arab Advisors Group fully analyses the Qatari communications market and its monopoly operator Q-Tel.

The report shows that Q-Tel is not an operator to let a good monopoly go to waste, but that consumers will be better served when some level of liberalization settles into the small and rich gulf state in and after 2005.

Qatar Telecom (Q-Tel), Qatar’s publicly traded and monopoly telecom operator solely provides fixed, mobile, Internet and datacomm services to the small rich gulf state. By end of year 2001, Q-Tel had 167,446 landlines and 177,929 Global System for Mobile Communications (GSM) connections, translating into penetration rates of 27% and 29% respectively.

The new report by Arab advisors shows that despite regionally impressive penetration levels, the Qatari market is below its true potential when compared to the penetration levels in neighbouring UAE and Bahrain.

“The average monthly revenue per user for PSTN service in Qatar stood at US$ 122 in 2001 with the bulk of it coming from international long distance (ILD) service. GSM service’s monthly ARPU stood at US$ 60 in the same year,” said Sami Sunna, author of the report.

“The high ARPU’s, and relatively high penetration rates, reflect the inherent price insensitivity of the rich market to essential telecom services. While Q-Tel did reduce ILD rates recently, the partially privatised operator is savvy enough to fully leverage its monopoly status; its net profit margin in 2001 was a full 56% of revenues,” added Sunna.

The report maintains there is strong potential in the Qatari market when it comes to the GSM, Internet and datacomm services and that These services will provide interested parties with an incentive to enter into the Qatari telecommunication market once liberalization matures, which is expected to materialize in 2005.

Qatar’s cellular subscribers are projected to grow by 21.4% between 2001 and 2006 to reach a penetration rate of 70%, according to Arab Advisors.

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