Jordan to license third GSM network

The two existing operators don't like the idea, but Jordan's comms minister thinks the market can support a third player.

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By  David Ingham Published  November 10, 2003

Jordan's telecomms regulator has confirmed that it will issue a license for a third mobile operator in the country. The Telecomms Regulatory Commission (TRC) has already issued a public notice containing proposed terms and conditions of the licence, which, when issued, will end the duopoly of the incumbents, Fastlink and Mobilecom.

Competition for the licence will be open to all potential investors that meet the criteria of "financial ability, industry experience and technological suitability," according to the TRC.

The regulator says that it plans to conduct the licensing process in a "fully transparent and non-discriminatory manner, in accordance with the highest international standards of openness and unbiased decision making."

Neither of the two current operators is overly thrilled at the prospect of a new competitor. At the last count, Fastlink had around 900,000 subscribers and Mobilecom 300,000, a penetration rate of 20% plus in a relatively low income country.

"What will this competitor achieve? The prices are the lowest in the world, all kinds of services are provided in Jordan," says Dr Saad Al Barrak, director general of MTC, owner of Fastlink.

Laurent Mialet, CEO of Jordan Telecom, the parent of Mobilecom, adds: "I'm not too happy about having one [a third operator], but it's a decision for the TRC." Although less than thrilled at the prospect of a new competitor, Al Barrak says he is not too worried, however. "I think it will hurt my competitor more than it will hurt me. The reason is, I have 75% of the market," he says.

"If Mobilecom, with Orange running the company, managed by France Telecom, cannot hurt us, I envisage it will be very tough for a third competitor to come from nowhere to hurt us. Besides, the market in Jordan is so saturated."

Dr. Fawaz H. Zu'bi, Jordan's minister of information and communications technology (ICT), doesn't agree that the market is saturated, however. "The youth market has not really been tapped yet," he says.

"Today, our penetration rate is around 22% and I would say that realistically, over the next ten years, reaching 50% is not impossible. A large proportion of our population is below 18 and will be coming of age over the next few years. The potential is there."

The government will "encourage" the third operator to provide some form of 3G coverage. The country's regulator will also be encouraged to introduce changes that will make competition work more efficiently. Number portability, whereby a user can switch operator but keep the same phone number, will be introduced at some point.

There is no word yet on who might be interested in bidding, but Mickael Ghossein, CEO of Mobilecom, thinks the new operator will have to come up with "something extraordinaire" if it is to make a mark. "The operator should be highly creative. It should be powerful in terms of marketing. It should see our weaknesses and Fastlink's weaknesses and find a niche."

"For three years, we have had very tough competition between the two operators and after spending maybe JD200 million, we have 25-30% [market share] and are just starting to break even. The third operator will need to spend money to build market share. Maybe he will take 10% but the question is 'With 10%, are you a viable operator or not?' My answer is no."

Saad Al Barrak, meanwhile, is suspicious of the whole process. "I think the introduction of a third operator in Jordan is a political game to advance some people's private agenda more than it is a genuine economic decision for the wellbeing of the country," he says.

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