Qatar to ring in telecoms sector

Qatar is taking the first step in opening its telecommunications sector. It has asked interested telecoms operators to share their comments and views as part of a consultation process before licences are put up for bid.

Qatar's telecoms sector, currently a monopoly of state-run Qatar Telecom (Qtel), is set to be liberalised in phases beginning this year, in line with legislation issued in November 2006. The country's policymaking and regulatory body for information and communication technology, ictQatar, is developing the licence structure and award process. It is overseeing the telecoms liberalisation, after which the state will grant competitive licences for the provision of network and telecoms services.

Telecommunications licences will be issued to own and operate fixed and mobile telecommunications networks and provide telecommunications services to the public. Potential operators will have not only to compete with the incumbent Qtel, which will have exclusive rights to the networks laid by it, but the new market entrants will also have to construct their own networks.

ictQatar is consulting with potential operators before a March 31 deadline, after which they have said they will publish licensing details in the second quarter of 2007. The licensing process is expected to be completed as soon as the end of the year.

Hessa al-Jaber, ictQatar's secretary general, said, "We welcome the opportunity to hear from those operators... these meetings are part of our commitment to transparency and fairness to all players."

The government's aim in liberalising the sector is to drive economic growth and increase efficiency in business practices. By doing this, consumers are expected to benefit from lower prices, new products and improved services.

Al-Jaber went on to say, "We can look forward to investment from an array of new industries, brand new jobs across the economy and innovative ways of doing business for the public and private sectors."

The Qatari telecoms sector is following in the footsteps of others in the region, which recently has seen major developments in this sector. It has been transformed from a group of government-owned monopolies through the introduction of new operators and the creation of telecoms regulatory authorities.

Qtel has enjoyed uninterrupted success in the domestic market. It recently connected its millionth customer to its network, out of a population of 800,000. This means its penetration rate is among the highest in the entire Middle East and North Africa (MENA) region. Qtel has roaming partnerships with 98 countries and 80% of its mobile customers fall in the pre-paid segment.

With Qtel's domestic saturation, they have set their sights on foreign markets. The company finalised the acquisition of 51% of the Kuwait-based National Mobile Telecommunications Company (Wataniya), which has over 1 million customers and is considered one of the more advanced network operators in the region. The share capital was acquired from Kuwait Projects Company (KIPCO) and other parties, as well as additional direct investments in its Algeria and Iraq operations, for a total of $3.8 billion.

The enlarged group will have operations in 11 countries, including Indonesia, Singapore, Oman and Qatar. Qtel's vice chairman, Sheikh Abdullah bin Mohammed bin Saud Al Thani said, "Together with their operations covering a combined population of 100 million in Kuwait, Algeria, Iraq, Saudi Arabia, the Maldives, Tunisia and Palestine, Wataniya Telecom adds valuable depth, coverage and skills to our expanded business."

Earlier this year, Qtel acquired a 25% share of Asia Mobile Holding, which controls Singapore's Starhub, with 2 million customers, and PT Indosat with more than 18 million customers.

"This deal perfectly matches our regional strategy and is an important step toward achieving our vision to be a top-20 telecommunications company by 2020," said Al Thani.

(C) Oxford Business Group - www.oxfordbusinessgroup.com

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