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Clean up act, says Arab Advisors Group

A new strategic research paper has denounced varying interconnection rates between Middle East networks, acknowledging that Arab telecoms deliver very different regimes.

With the predicted entrance of new operators, the Arab communications markets must increasingly accommodate new structures to move from monopoly markets to more competitive ones. So argues a new report from the Arab Advisors Group, entitled “The Mobile and Fixed interconnection regimes in the Arab World.”

As more Arab markets experience liberalisation, writes analyst Hala Baqain, author of the report, interconnection rates between different public networks will become a key issue.

“The Arab communications markets are mainly monopoly markets, especially in the fixed services. As these markets accommodate new telecom operators as a result of liberalization, the presence of fair and regulated interconnection regimes becomes increasingly important and a major factor in the success of the liberalization efforts,” says Baqain.

The report analyses seven Arab Countries that have cellular duopolies and shows that the interconnection regimes in place vary markedly. The report fully lists the prevailing interconnection rates in each of the examined markets.

“Syria has no mobile to mobile interconnection while it has symmetrical interconnection rates for traffic to and from the fixed networks. Lebanon too has a collect and keep model for GSM traffic,” writes Baqain.

“Egypt, Jordan and Morocco have interconnection rates for all traffic and are not necessarily symmetrical. Kuwait has a collect and keep model that is currently being phased out. Similarly, Algeria’s initial collect and keep model for GSM traffic will be ended in 2003.

“The Arab Advisors Group sees no justification for having asymmetric interconnection rates between different networks. The long-term interest of the Arab consumers and the entire communications market at large lies in cost based pricing and competition.

"Therefore, the responsibility lies on the operators and the regulators, where existent, to insure that the markets move away from interconnection rates that are not entirely cost based.

“Eventually when the Arab communications markets host healthy competition and fair pricing the trend should move towards the application of the simpler “collect & keep” interconnection model,” concludes Baqain.

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