174 FM Radio Stations in 18 Arab Countries
Not unlike the Satellite TV boom, the Arab world is undergoing an FM radio station boom. The FM radio industry, which is local and not pan-Arab by definition, still has some regionally focused operators. The landscape is made up of local FM stations for the most part and the numbers are projected to skyrocket as more countries allow private FM radio operations in the coming few years. The UAE and Algeria have the most crowded state-owned FM radio environments in the region. The UAE leads with 19 radio stations operating under five networks. Algeria follows UAE with 17 radio stations operating under the states Radio-Television Algerienne (RTA) network. On the privately owned stations, Palestine, Lebanon and Iraq lead the region with 23, 17 and 10 operational private FM radio stations respectively.
In the recent past in the region, radio and TV were considered political tools of the state with governments exerting total control on them. Increasing liberalization has led to changes and growth. A new report, “FM Radio in the Arab World 2005,” from the Arab Advisors Group, provides a detailed analysis of the FM Radio regulations and landscape in the 18 Arab countries of Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, UAE and Yemen.
“Radio listening is popular and widespread in the Arab world. Arab Advisors’ surveys in Jordan, Egypt and Saudi Arabia reveal that a majority of people listen to radio stations,” Lina Juma, an Arab Advisors research analyst wrote in the report.
Egypt and Tunisia were the first countries in the Middle East to allow private radio stations under a legal framework. Egypt launched Nile FM and Negoom FM in July 2003, followed by Tunisia’s Mosaique FM in November. Furthermore, Jordan’s broadcasting media experienced partial liberalization in mid-2003 after the establishment of the audiovisual media law. Finally, the Ministry of Information in Kuwait issued legislation granting licenses to private radio and television stations in the same year. Consistent with the liberalization trend, in 2004 Oman was next in line to offer licenses to private TV and radio stations. Up to now, Syria has been the last country to pursue liberalization although Saudi Arabia is presently planning to privatize some public radio stations.
Biggest ME Telecom Potential in KSA
With two mobile operators and one iDEN-based group communications network, Saudi Arabia remains the country in the region with the largest potential for growth in telecommunication services. The Kingdom has a population of over 23 million. In 2004, prior to the entry of competition, there were 9.2 only million mobile users (US Saudi Arabian Business Council – June 2005). Liberalization and its effect on the market is one of the key topics that will be discussed at Telecoms World Middle East, taking place from Dec. 4-7, 2005 at the Shangri-La Hotel in Dubai.
“Expansion into new markets is one thing, and continuing to grow within an operator’s home market is a different game altogether. Saudi Arabia is the biggest market in the GCC, and has a highly untapped potential,” said Edward Haines, conference director for Telecoms World Middle East, Terrapinn. “Both STC and Mobily will be sharing their experiences and views on benchmarking the competing and growth at the conference. Representing them will be Yousef Abdullah Al-Akeel, director of carrier services, and Khaled Al-Kaf, CEO, respectively.”
For more information on the conference please visit the website: http://www.terrapinn.com/2005 /twme/.
BMG Recommends Dumping STC Shares
According to BMG Financial Advisors in a new 1H05 update report, Saudi Telecommunication Company (STC) has shown slower growth. STC reported a net income of SR5,914 million in 1H05, 15.1 percent higher than the SR5,141 million recorded in 1H04. Due to competition, the company added only 554,000 wireless subscribers in the first five months of 2005 compared to 1.7 million in FY04. Wireline subscribers grew from 3.70 million by the end of 2004 to 3.75 million by May 2005. STC’s wireless revenues grew 14.8 percent to SR11,521 million in 1H05 from SR10,033 million in 1H04, while wireline revenues declined 8.6 percent to SR4,436 million in 1H05 from SR4,853 million a year earlier. As a result, the 1H05 revenues grew at a disappointing rate of 7.2 percent to SR15,957 million as opposed to 1H04 revenues of SR14,886 million.
BMG Financial Advisors found that with stiff competition from the new operator, Mobily, STC is likely to capture only 40 percent of net additions in 2005 as Mobily has already acquired over one million subscribers within the first three months of operations. In addition, the government intends to allow a third mobile operator by the end of 2007. These developments are likely to cause an increase in STC’s churn rate going forward, as well as growing mobile telephony rapidly. BMG expects penetration levels to rise from 36 percent to 64 percent during 2004–2007. However, BMG forecasts that STC’s market share of net additions in the wireless segment will fall to 30 percent by 2008. Based on the analysis of STC’s financial outlook, BMG has downgraded its recommendation for STC from “Add” to “Sell.”
For a complete copy of BMG’s STC report, contact [email protected].
