Open Plan

The Jordanian mobile market was liberalised in the year 2000, and has gone on to develop to become the most competitive mobile markets in the region with five licensed operators serving a population of 6 million inhabitants.

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By  Tawanda Chihota Published  June 14, 2006

|~|Jordan-shop-200.jpg|~|Fastlink is Jordan’s largest mobile communications operator with a 60% share of a four-player market. |~|At the end of last year, Jordan’s mobile penetration rate stood at about 54%, suggesting that further growth prospects remain positive given the high proportion of youth in the population. However, given the small total Jordanian population, which stands at less than six million people, and the kingdom’s high level of competition, which comprises three GSM players and a single iDEN operator, maintaining and growing a mobile operation in Jordan remains a challenging prospect. Jordan has enjoyed more than five years of market liberalisation, having last year moved to establish an integrated licensing regime that allows licensees to make access technology decisions based on the services they seek to offer rather than a technology choice stipulated in the terms of the licence. In short, operators are allowed to offer mobile services, within the allocated spectrum range, utilising any appropriate technology of their choice, and thereby placing mobile operators such as market leader Fastlink, in direct competition with the likes of state telco Jordan Telecom Group and alternative provider Batelco Jordan. Given the regulatory move towards technology neutral, unified licences, much of the dynamism that exists within the Jordanian telecoms sector has been attributed to the open regulatory environment developed by the Telecommunication Regulatory Commission (TRC), which was formerly presided over by Muna Nijem. She tendered her resignation late last year, and given there is also a relatively new minister at the ministry of ICT, Omar Kurdi, appointed in November 2005, the Jordanian government should move quickly to restore regulatory leadership and continue fostering an enabling environment within the telecoms sector. Consolidation is forecast to be the next obvious stage of the Jordanian mobile market’s development given the large number of network as well as service providers. New GSM entrant Umniah, for example, which entered the market in July 2005, has plans to seek investment opportunities outside of Jordan in order to improve the company’s general level of exposure to the risk of acquisition, though rumours in the market already abound. Batelco Jordan, a unified licence holder is preparing to enter Jordan’s mobile telecoms space, and Umniah has been rumoured to be an acquisition target to ease Batelco Jordan’s entry into the mobile market. However, for the two dominant operators – Fastlink and MobileCom – the priority appears to remain very much the addition and retention of subscribers and the improvement in the manner in which they provide services to end users. Subscriber penetration in Jordan topped 60% at the end of March, and has witnessed a significant rise in the number of subscriptions in the last twelve months. Factors such as quality of service and network rollout will be fundamental in differentiating offerings, and market leader Fastlink’s efforts to offer a value proposition and connected with its subscriber base have been a success. The ability to enjoy a market share of more than 55% in an exceedingly competitive market is a real achievement, and Fastlink continues to dominate the Jordanian mobile market, having seen its subscriber base skyrocket from around 700,000 18 months ago, to over 2 million today. ||**|||~|Jordan-man200.jpg|~|Jordan’s large proportion of young people in the population makes uptake of communications services more likely. |~|While its overall market share continues to fall, dropping from around 70% at the end of 2004, to about 61% at the end of March, primarily as a result of the entry of a new player in the market, the overall market has been stimulated by the presence of more players and Fastlink has enjoyed a significant rise in the number of subscribers its is adding to its network. Service-orientation rather than technology-orientation is the manner in which Fastlink develops its service proposition and offers subscribers services and applications that they perceive to be of value. “We have launched services like push email, video-streaming, together with web browsing and these kinds of services allow faster and better experience for the end-user,” explains Samir Abu Zahra, chief technology officer of Fastlink. “We have driven our strategy over the last two or three years since the MTC takeover in several areas. First, substantiating our position in the market, by raising the quality and providing services, and in the technology field, we have raised the quality of the network to the level where we are classed as number one and operate a very superior network,” Zahra states. Indeed, Fastlink’s enthusiasm to bring to market new services enabled by innovative technologies saw the operator become the first in the region to launch MMS back in August 2002, and one of the top 20 in the world to do so. Today the operators offers SMS, MMS, and WAP-based services via its GPRS and EDGE networks and continues to deliver a rich content of value added services. “We have launched a lot of firsts in terms of content services, not just in Jordan, but in the region,” comments Ziad Al Masri, Fastlink’s data services manager. “ We launched news from Al Jazeera and BBC, and recently we launched CNN as well. A lot of targeted and segmented content is also offered, on topics like sports, diet, horoscopes, Islamic content, English Premier League clips as well, MSN, Al Masri continues. “All type of content that is available out there is available on the mobile right now, using any interface, whether it is SMS or MMS,” he adds. Echoing Zahra’s comments, Al Masri emphasises that technology is something that is kept in the background, while the operator looks to bring to market services and benefits that can be communicated easily to end-users. “We look at it with a different view in that we try not to launch technologies to the customer but benefits and the service,” Al Masri states. “For example, when we launched GPRS or EDGE, we didn’t launch it as GPRS or EDGE, we launched it as internet browsing.” Push To Talk over Cellular (PoC) is a service that Fastlink believes will witness strong market adoption, but which the regulator, the TRC, has been preventing for almost a year now. The regulator suggests the provision of PoC services falls outside of the current realm of activities permitted under the existing GSM licences, though Fastlink remains confident that a resolution to the matter is imminent and that the operator will soon be permitted to launch PoC services commercially. Fastlink has also taken a pragmatic approach to next generation technology, having decided the time is not yet right for the move to 3G at this point in time. “You have to assess the market situation in terms of how many subscribers are actually using data services and what kind of traffic volume they can generate on data,” says chief technology officer Zahra. “In our experience with GPRS and EDGE we see insufficient data volumes to warrant providing a 3G network. Even in Europe, we still see that the operators that deployed 3G are not using it for data as much as they are using it for voice.” Zahra believes that the year 2008 may prove to be the year when all the factors come together to permit the successful introduction of 3G in Jordan, though he expects potentially disruptive technologies such as mobile WiMAX to be available in the market at that time, making the choice of which broadband technology to utilise a considered one. ||**|||~|Jordan-radio-station200.jpg|~|The quality of network service has become increasingly important in Jordan in order to differentiate services. |~|Market leader Jordan Mobile Telephone Services Company, Fastlink, founded in 1995, was the first operator to introduce mobile phone services into Jordan. By its tenth-year anniversary, the operator, the operator reported US$455.92 million in revenues, up 8.3% year on year, as EBITDA improved by 27% to reach US$241.8 million in 2005. This implied an EBITDA margin of 53.05% for the year. Total subscriber numbers at the end of 2005 amounted to more that 2 million, representing an overall market share of around 64%. The last three years have witnessed Fastlink mature to become a competent market leader, which is forming strong relationships with its subscribers, and pro-actively guarding its market share. The acquisition of Fastlink by MTC Group of Kuwait at the beginning of the year 2003, raised the Jordanian operator’s profile higher, as it was absorbed into a family of operations that were centred around a strong corporate culture as laid out by MTC. It was January 16, 2005 when MTC announced the completion of the acquisition of 91.6% equity interest in Fastlink from Orascom Telecom for a total consideration of US$423.9 million. The acquisition raised MTC’s equity interest in Fastlink from 4.9% to 96.5%, with the approval of Jordan’s regulator – the Telecommunications Regulatory Commission - secured on January 2, 2003. Fastlink has since grown to become a 1,000 employee-strong company, and continues to benefit from its association with the fastest expanding mobile operator group in the region, and arguably in the world. MTC’s impact on Fastlink’s operations on a local level is significant, and spans across the Jordanian operator’s activities and strategy. “Basically at an MTC Group level, we all work together to unify interfaces to our customers, explains Al Masri, data services manager at Fastlink. “So our customers going from one MTC Group country to another are able to find any service enjoying approximately the same user interface and experience. We are developing regional content but with a localised feel.” Even MTC’s strong focus on corporate social responsibility (CSR) in its home market of Kuwait has trickled down to the Jordanian operation, and Fastlink’s own domestic efforts have been intensified. “Fastlink has adopted a very active CSR programme. It has historically been very active in that regard, but it has also increased its activities I would say since 2004,” comments Suzanne Afanah, Fastlink’s director of corporate communications. “That direction has been further boosted by a very active CSR programme at MTC. MTC has historically had a very strong CSR programme. In Kuwait, it has an MTC hospital, and has various community-related projects, so in that way, Fastlink is not only active in CSR from a local perspective, but it is also part of MTC’s strategy and direction to be a company that cares about the community.” Fastlink’s image as an operator with a social conscience, which is willing to give back to the community, may partly explain the strong subscriber numbers the operator has added in recent quarters. In 2005, the operator reported that subscriber numbers grew by approximately 77% year on year to reach 2.016 million, this despite the addition of further competition in the market. In order to satisfy subscriber needs, Fastlink has always strived to deliver service solutions that appeal to end-users and ultimately inspire usage and loyalty. It’s a strategy that appears to be working given that data communications accounted for 12% of Fastlink’s overall service revenues in 2005, despite the operator’s subscriber base being 85% prepaid. The operator invested US$93 million during 2004/2005 to upgrade and update the network, and Pella Telecommunications, a Fastlink subsidiary, acquired a class licence that enables it to provide international services. “We are able to compete and provide services on international traffic without going through the incumbent,” explains Samir Abu Zahra, chief technical officer of Fastlink “We started to establish our own international links via our own gateway and satellite earth stations. We have deployed two satellite earth stations that overlook and interconnect at London and New York, and through these locations we interconnect with international carriers.” ||**||

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