LONDON-The wireless sector in the Middle East continues to grow, with several developments that took place during the last half of 2000. The region saw a number of new mobile operators begin services, as well as announcements of contracts for cellular infrastructure expansion.
Chief among the awards was the announcement by Finland’s Nokia that it signed a contract with Telecommunications Company of Iran (TCI) to carry out expansion work on TCI’s GSM network. Nokia, which has been providing solutions to TCI since the early 1990s, is to expand and upgrade the existing GSM 900 MHz network. The financial value of the contract, which also covers provision and installation of switching and base station systems, was not disclosed.
This latest project comes in response to the ever-increasing demand for mobile services in Iran, especially in the Tehran area. The expansion and upgrade work to the network will result in a total capacity of 1.5 million subscriber lines by mid-2001. This compares with the current capacity of 400,000 mobile users based on the network set up by Nokia and Siemens in the early 1990s.
According to a comment by Pertti Melamies, Nokia’s area vice president, the company is well placed to benefit from the expected boom in the Iranian mobile sector.
Also benefiting from the increasing demand for mobile services in the region is Motorola, which has managed to secure contracts with both Jordan’s Fastlink and Mobile Telecommunications Co. (MTC) in Kuwait during the last quarter to carry out network expansion projects.
The contract with Fastlink, valued at around US$23 million, will see multilayer network expansion and covers supply and installation of Motorola’s Horizonsystems GSM network equipment.
Meanwhile in Kuwait, Motorola signed a deal with MTC valued at US$28 million that will result in increased capacity on MTC’s dual-band GSM 900 MHz network. Once again, the project will make use of Motorola’s Horizonsystems GSM infrastructure and will increase network capacity by 30 percent.
According to Salman Al-Roumi, chairman of MTC, the project is being driven by MTC’s need to stay ahead of the increasing mobile market in Kuwait. Expansion work is due for completion by the end of 2000.
Licensing activity
Further proof the Middle East’s mobile sector is in good health includes the issuing of new licenses. In September, Orascom Telecom, Telsim and Investcom each submitted bids for two new GSM licenses in Syria. The 15-year, build-operate-transfer (BOT) contracts will cover installation of two new cellular networks, each serving 850,000 subscribers. Bids are being evaluated, but no time frame for the announcement of winners has been set.
Under the terms of the deal, the Syrian Telecommunications Establishment (STE), which is awarding the licenses, will extend both contracts for another three years at its discretion and maintains the right to issue a third GSM license after a seven-year period. There is currently not a commercial operator in Syria, although STE carried out trials during 2000.
The Jordanian mobile market has seen the commercial launch of its newest cellular operator, MobileCom, which signed up 20,000 subscribers in its first week of operation. In addition, two new GSM licenses were issued in Yemen to Sabaphone and Spacatel, with no indication as to when service will begin.
As we move into 2001, all indications are the mobile sector in the Middle East will continue to see significant activity. Licenses for new, privately run GSM networks are due to be issued in Algeria, while both Bahrain’s Batelco and Q-Tel in Qatar have announced continued demand for GSM services is having a positive impact on their revenues. Bahrain, for example, now has a mobile penetration level of about 25 percent, largely helped by the new prepaid service known as SimSim. According to Batelco, additional value-added services can be expected in the coming months.
