Bahrain leads the region's data communications market
According to IDC, 24% of Bahrain's 2001 telecommunications revenue was generated by data services.
According to statistics from IDC, Bahrain’s telecommunications market is the most mature in the region, with 24% of its revenues in 2001 being generated from data services. The UAE trailed behind Bahrain with 10% of its 2001 total telecommunications revenue coming from data communications.
Egypt and Tunisia fared better with 5% and 4% respectively. However, Saudi Arabia has still to rollout advanced managed data network services (MDNS) kingdom-wide.
The comparative analysis of local datacoms markets was based on a matrix developed by IDC that compares the proportion of telecoms revenue generated from managed data network services and leased lines, while taking into account the level of development of the overall telecoms market in each country.
Mohsen Malaki, senior analyst at IDC's Telecommunications Group, was at Arabcom 2002 to present the matrix, together with the results of the latest IDC report, Data Communications Services in Middle East and North Africa, 2001-2006.
During his presentation, Malaki emphasised the importance of MDNS in the success of Batelco and Etisalat's datacoms offerings.
Although Bahrain's overall telecommunications market is only one-tenth the size of Saudi Arabia's, its MDNS and leased line revenue, standing at US$107 million by year-end 2001, is nearly the same size as the latter country's.
“Bahrain's incumbent monopoly, Batelco, has managed to propel the growth of data communications services through the introduction of advanced MDNS such as global Frame Relay and ATM services," explains Malaki.
Global MDNS is a major portion of Bahrain's datacoms revenue, due to the heavy presence of multinational firms in the country. “The partnership with Cable & Wireless has certainly helped in the rollout of these global managed data services,” adds Malaki.
The UAE, which has a larger domestic telecoms market than Bahrain, derived 10% of its overall telecoms revenue from MDNS and leased line provisioning. “Much like Batelco, Etisalat has been rolling out new managed data services aggressively over the past several years,” says Malaki.
“In line with both operators' strategies to diversify their revenue sources away from international long distance and GSM revenue, data communications has become an invaluable part of Batelco and Etisalat's revenue mix.”
The data communications markets in both countries compare favourably with the Western European average, where roughly 11% of overall telecommunications revenue came from datacoms.
Arguably the most surprising result of the comparative analysis is Saudi Arabia's position in the matrix. With a US$5.2 billion telecoms market in 2001, Saudi Arabia is by far the largest telecommunications market in the region. But the Kingdom’s MDNS and leased line revenue constituted just 2% of the overall telecoms market.
“Delays in the launch of managed data services have been the main reasons for the underdeveloped datacoms market," comments to Malaki. IDC's report findings indicate that most datacoms revenue in the Kingdom came from leased line provisioning in 2001.
“With a national data backbone established, and the nation-wide availability of new services such as frame relay and ATM in the near future, Saudi Arabia's data communications market has tremendous growth opportunities," adds Malaki.
The Egyptian market, which is one of the few markets to have introduced competition in MDNS, has seen demand for Frame Relay services from banks and financial institutions drive MDNS revenue far higher than leased line revenue.
A similar trend is emerging in the Lebanese and Jordanian markets as well, according to the IDC report. Data communications services constitute 5% of telecoms revenue in Egypt, 4% in Tunisia and Oman, 3% in Jordan, and 2% in Lebanon.