Arab World Telecom Numbers

The results of the Arab Advisors Group’s annual Total Country Connectivity Measure (TCCM) reveal substantial improvements in overall scores. Refreshingly, some improvements in the national scores came from fixed and broadband services growth and not just cellular growth. These findings were released yesterday at the 5th Media and Telecoms Convergence Conference in Amman.

The Arab Advisors Group, a member of the Arab Jordan Investment Bank Group, calculates the TCCM by adding the household mainlines penetration, cellular penetration and Internet users penetration rates in each country. The UAE’s TCCM score of 329.5 percent availed the country the first rank in the Arab World. Bahrain followed at 210.4 percent, then came Saudi Arabia at 207.9 percent. The percentages of the other Arab nations were: Qatar (193.1), Kuwait (164.7), Libya (162.0), Oman (153.7), Jordan (133.9), Algeria (130.7), Lebanon (124.6), Tunisia (122.7), Syria (122.5), Egypt (111.6), Morocco (106.6), Palestine (90.5), Iraq (77.2), Mauritania (54.5), Yemen (47.2) and Sudan (28.9).

Comparing the end of 2007 and end of 2006 ranking reveals the following. The UAE kept its “number one” spot, while Bahrain moved into second place, up from third in 2006. Saudi Arabia moved up to third place in 2007 from fourth place in 2006. Qatar slipped to fourth place from second place in 2006 — largely due to the restatement of official population figures at a much higher figure, which was the case in Bahrain as well. Kuwait maintained its fifth place, while Libya switched places with Oman taking the sixth place, up from seventh in 2006. Jordan stood steady at eighth place, while Algeria moved ahead of Lebanon to ninth place and Lebanon slipped to tenth place.

The TCCM shows the extent of connectivity of individuals in a certain country whether via fixed lines, cellular lines and/or Internet. Off course, there will be an overlap since many individuals will be using these three communications technologies at the same time. However, the measure still yields an accurate and informative picture on the level of ICT services penetration in each country: For example, if a country has a TCCM measure of 60 percent, this means that at least 40 percent of the population are not users of any of the three services constituting the measure. While a TCCM score of more than 100 percent is very positive, it nonetheless, does not mean that all the population uses the services due to overlap of usage.

“As usual, the main driver in the increasing TCCM scores by end of 2007 in the Arab World was cellular subscribers’ growth with Internet services contributing a much lower portion of the increase. Still there were some bright spots such as the growth in broadband in Saudi Arabia and fixed wireless services in Morocco that contributed greatly to an enhanced TCCM score of the two countries,” commented Arab Advisors Group’s GM Jawad Jalal Abbassi. “Enhancing the growth in the Arab broadband Internet markets, a prerequisite for any knowledge-based economy, will require coordinated and intensive policies and initiatives.”

So, what are the broadband numbers? According to the Arab Advisors, by end of 2007, fixed line broadband penetration as a percent of total population ranged from 8 percent in Qatar to a mere 0.02 percent in Sudan. Qatar, the UAE and Bahrain lead with 8 percent, 7.8 percent and 7 percent respectively.

“While absolute broadband penetration in the Arab World may seem low by industrial countries standards, the effective household broadband penetration is much higher. This is related to a higher number of people per household as well as line sharing. For example, an Arab Advisors survey in Egypt revealed that 63.4 percent of Egyptian households that use ADSL service, share their ADSL connection with neighbors. A massive 81.9 percent of households that use shared ADSL lines share them with more than three neighboring households,” Abbassi remarked. “Based on the survey results, the average number of households sharing one ADSL connection is 2.98. Multiplying the reported number of lines by this figure yields an estimate for households with ADSL connections in Egypt of 956,000 households by end of 2007, much higher than the number of accounts. While ADSL sharing is illegal in many countries and does negatively affect quality, the Arab Advisors Group believes that the practice is widespread in the Arab World. The silver lining is that more households are connected to broadband Internet services which would positively affect adoption of Internet-based services such as e-commerce, multimedia, user generated content and e-government services.”

ME Consumers Embrace Technology

According to research from the Consumer Electronics Association (CEA), technology is a key component to a higher quality of life in the Middle East, resulting in high ownership and intent to buy rates. CEA’s Consumer Technology Trends in the Middle East Study was conducted among a sample of 2,400 adults in the countries of Bahrain, Egypt, Kuwait, Qatar, Saudi Arabia and the UAE during April/May, 2008. The study found that 85 percent of online consumers believe technology helps them better communicate with friends and family, while 71 percent say it brings friends and family closer together. They also believe technology makes life more fun (79 percent) and more productive (75 percent).

Worldwide retail sales of consumer electronics (CE) products are expected to reach $668 billion in 2008, up 8.2 percent over 2007, according to the CEA/GfK Global CE Sales & Forecast. The Middle Eastern CE Market will account for roughly 4.5 percent of the worldwide total.

According to the CEA Middle East study, nine out of 10 consumers in the region purchased a consumer electronics product in the past 12 months. Leading the way are cell phones with a 97 percent household ownership rate. Consumers are doing more than just talking on their phones with 77 percent using their cell phones’ camera in the past 30 days. Televisions (88 percent) and desktop computers (87 percent) also have high household penetration rates, ranking second and third, respectively. Products such as digital cameras, video game systems and car stereos are also being found in more homes than ever before.

Where you live plays a factor in purchase intent as well. Consumers in the UAE plan to purchase GPS units and home theater speakers at greater rates than other countries in the region. In contrast, Kuwaitis are more interested in buying video game systems. When it comes to buying decisions, the majority of Middle Eastern consumers say they want well-known brands, as opposed to selecting brands simply because they are manufactured in their home country. For Middle Eastern consumers quality comes first, country of origin second. This also shows the importance of international free trade agreements in the development of the Middle East markets.

Electrical Laboratory Accredited

Intertek announced that the Saudi Arabian Standards Organization (SASO) has accredited its electrical laboratory in Riyadh. The company believes that this accreditation will bring benefits to its clients both in the Kingdom and overseas who wish to have products tested for conformity to the Saudi Standards, Gulf Regional requirements or International requirements.

“The development of this laboratory and the accreditation by the National Accreditation Committee (SAC), is testament to Intertek International’s commitment to continuing to develop its long relationships and operations in Saudi Arabia,” said Ian Kitchin, VP, Intertek International. “In line with the Royal and Ministerial Decrees, Intertek International is supporting further development of testing and certification operations in Saudi Arabia.”