Wanadoo Jordan reduces ADSL charge

Wanadoo claims a 50% market share of broadband subscribers, though analysts at Arab Advisors Group in Amman estimated ADSL penetration as a percentage of total internet penetration at only 0.2% at the end of 2003.

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By  Tawanda Chihota Published  April 7, 2005

Jordanian ISP Wanadoo has announced a 35% reduction in the cost of monthly residential broadband ADSL charges; a move analysts believe will be repeated in markets throughout the Middle East as competition grows and helps to drive down prices. Commencing April 1, Wanadoo’s residential ADSL access charges were reduced to between JD160 (US$226) - JD400 per annum, down from charges that ranged between JD250 – JD600. Wanadoo claims a 50% market share of broadband subscribers, though analysts at Arab Advisors Group in Amman estimated ADSL penetration as a percentage of total internet penetration at only 0.2% at the end of 2003. “We have seen this reduction (in Jordan) in broadband pricing because the incumbent can see the entrance of competition is just around the corner,” says Jawad Abbassi, president of Arab Advisors. “Bahrain, Jordan and Saudi are all markets I expect to see a drastic fall in (broadband) pricing as competition improves,” he adds. The cost of broadband access remains prohibitively high across the Arab world, with Arab Advisors estimating the average ADSL monthly charge at the end of 2003 at US$80 per month in 2003, with a median cost of US$79 at that time. Access was most expensive in Syria, with the average monthly cost of broadband access topping US$135, while the least expensive monthly charges were found in Egypt, averaging US$24 per month. Broadband penetration across the Arab world still remains low, and Amr Salem, general manager of Gulf and Eastern Mediterranean, HP Middle East believes this can be attributed in a large part to the lower economies of scale found in the region. “Unless you have the economies of scale as far as the subscriber base, you will not have the investment in broadband networks,” Salem says. “Plus people do not see the need for it because of the lack of content. Today, if all you are going to be doing is browsing the internet you don’t need broadband,” Salem suggests. He believes that the momentum will grow once more compelling services and applications start to become available. “The number of content providers in the Middle East is probably less than a hundredth of what you would find in more developed economies like in Japan. Japan Telecom has 110,000 content providers listed. If you compare this to the number of content providers that, for example, are listed on Etisalat or any of the local providers, they would not be more than 50,” Salem comments. Arab Advisor’s Abbassi agrees, suggesting that, “once internet becomes intertwined with daily living, that’s when you’ll witness rapid adoption.”

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