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Mobile telecom drives growth in Arab World [TradeArabia]
[February 12, 2013]

Mobile telecom drives growth in Arab World [TradeArabia]


(TradeArabia Via Acquire Media NewsEdge)   The rapid pace of mobile adoption has delivered substantial economic benefits for the Arab region, directly contributing $132 billion to their economies or approximately 5.5 per cent of total GDP in 2011, a report on the impact of the mobile industry on Arab states said.    Mobile broadband connections across the Arab world are expected to increase by a staggering 255 per cent by 2017, rising from 40 million in 2011 to 142 million, said the report by GSMA, an association of telecom operators.    Mobile broadband connections have already outstripped fixed-line connections by over 350 per cent, it said.



  Based on research from Deloitte, the GSMA "Arab States Mobile Observatory" details strong regional market competition and falling handset prices, fuelling a 32 per cent average annual growth in mobile connections over the past 10 years, soaring from 19 million connections in 2002 to 391 million in 2012.    While highlighting the extraordinary development of the region over the past decade, the report identifies fundamental challenges that put the continued growth of the sector at risk, including limited spectrum availability, high taxation and stifling regulation.    "Mobile communications in the Arab States have transformed society and fostered substantial growth in investment, innovation and productivity," said Tom Phillips, chief government and regulatory affairs officer, GSMA. "However, there are far greater opportunities that the mobile industry can deliver for the region. Governments need to take action now to increase spectrum availability and stabilise the regulatory environment if they want to continue the momentum and realise mobile's full potential."        In addition to the economic value, the mobile industry has contributed to employment in the region. The full-time employment created across the Arab states as a result of the availability of mobile technologies is estimated to be more than 1.2 million jobs in 2011.  This figure represents a combination of direct employment by mobile operators, jobs across the mobile ecosystem and the multiplier effect caused by the positive business impact of the mobile ecosystem on wider industries, further boosting job creation.    If additional harmonised spectrum were allocated to mobile broadband, 5.9 million additional jobs could be created by 2025, according to the study.      To extend mobile penetration and capacity, as well as reap the associated economic benefits, governments in the region urgently need to deliver adequate spectrum in line with internationally and regionally harmonised spectrum bands, including the Digital Dividend, 2.6GHz and 1.8GHz bands.    The release of additional spectrum could raise the region's combined GDP by $108 billion between 2015 and 2025. Harmonisation of spectrum bands would further lead to economies of scale for device manufacturers, which in turn would give more consumers access to affordable mobile technology.    Santino Saguto, Partner Consulting, TMT Leader for Deloitte Middle East, said: "Mobile penetration has increased greatly over the past few years and now reaches well above 100 per cent in many countries of the Arab world. However, in order to meet the expected demand for new generation services, governments need to continue to support the development of mobile broadband, notably through the provision of appropriate spectrum. The current spectrum allocations are not able to sustain the potential growth in data traffic and, unless increased, seem likely to raise costs of provision, challenge investment decisions and increase network congestion."    The study also points out the urgent need for governments to revise mobile taxation and regulatory regimes across the region. Information and communication technology (ICT) policies that support light-touch regulatory frameworks will increase investment from mobile operators in next-generation data services across the region, it said.

  High consumer taxes on mobile products and services are holding back the growth of the sector, decreasing affordability and, in turn, usage levels, denying the poorest members of the population access to mobile services. A number of countries in the region, including Egypt, Jordan and Morocco, have extremely high taxes on mobile services as a result of mobile-specific or 'luxury' tax rates, the study said.


  If spectrum needs are met and regulatory certainty delivered, there is a major opportunity for governments to generate significant additional revenue from the mobile ecosystem, with the potential to raise $528.7 million in the Arab Middle East and $383.7 million in North Africa by 2025.    Phillips continued: "The Arab States' mobile industry is clearly making a major contribution to their societies and economies. However, the potential for it to make an even greater contribution to the region's success and growth is clear with the provision of mobile data and mobile broadband services. By tackling the core issues of spectrum availability, taxation and network investment and creating a more transparent and business-friendly regulatory environment, this opportunity can be realised." - TradeArabia News Service ? (c) 2013 Al Hilal Publishing & Marketing Group Provided by Syndigate.info an Albawaba.com company

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