Fahad Al Shirawi, Managing Director of 2Connect in Bahrain discusses national and regional aspirations for economies and communications providers in the Middle East and concludes that more competition and lower prices are needed in the region

1. The Power 2Connect

2. National and Regional
Realities

3. Cost Comparison

4. Facts
• The price range for the Arab countries (cheapest to most expensive) is wider than
for the OECD countries
• The cheapest OECD country is below the cheapest Arab country
• The most expensive Arab country is significantly more expensive than the most
expensive OECD country
• Most of the Arab countries have fixed costs well below the OECD countries,
causing the usage element to dominate. This makes the overall cost grow quicker
with increasing usage. What does this mean?
• Even with significantly lower fixed cost the overall cost of using the service is
higher in the Arab countries than in the OECD countries.
• There is a clear lack of rebalancing in most Arab countries, where the usage
revenue covers a significant portion of the fixed line cost for the operators.
• International calls are significantly more expensive than in OECD countries

5. More Cost Comparison

6. Got the Point?
• Our prices are high and our usage is low
• We can potentially take a central stage in
global economics and politics
• We cannot communicate. Costs too much.

7. EU Data – Internet Growth
A look at Internet Growth through LIR Data for
the RIPE Region:
Number of Existing LIRs by age
900
800
No of LIRs
700
600
500
400
300
200
100
0
15 14 13 12 11 10 9 8 7 6 5 4 3 2 1
Age (years)

8. Where Does the ME Growth Rank
Parts of the ME are in the RIPE Region. Looking
at RIPE NCC Date:
Top Ten Countries LIR History
1000
ru
900
uk
800
de
700
it
600
nl
500
se
400
fr
300
es
200 ch
100 at
0
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jul-95
Jul-96
Jul-97
Jul-98
Jul-99
Jul-00
Jul-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08

9. Here’s Another Point
We’re not even top Ten!

10. National and Regional
Aspirations

11. Aspirations
• Attracting FDI into the Country
• Higher Employment Levels
• Improved Skill Levels
• Availability of Communication Infrastructure
to Support and Improve Education, Health,
National Security, and Other at a Reasonable
Cost
CONFIDENTIAL

12. • Monopolies are NOT Efficient. High cost, low
incentive to evolve, NO incentive to improve
services or introduce value added!
• Duopolies… Just the same.
• Oligopolies… A little better but not by much!
• Competition: Here is a word I like to hear!
CONFIDENTIAL

13. Bahrain
• Fully Deregulated
• A few hurdles left for the TRA to deal with but
overall managed to promote aggressive
competition
• Three Mobile Operators
• Two Fixed Line Operators (?)
• Six active ISPs
• More than enough Calling Card Operators
CONFIDENTIAL

14. Saudi
• Another Great Story
• WTO induced deregulation but…
• Three DSPs
• Four Fixed Line Operators
• Three Mobile Operators
• More than Enough ISPs (?)
• Technically More Licenses are Available

15. Other Countries
• UAE has two operators – no immediate
deregulation plans
• Qatar has granted second mobile and second
fixed – no immediate deregulation plans
• Oman has two mobile operators and has
started granting licenses. However,
complicated process, several changes in
direction and a few failed launches
Note: Sorry but restrictive deregulation is not deregulation.

16. What we are All trying to do
• Those who deregulated and those who didn’t
have the same goal
• Country First!
• Different ideas dominated by the question of
how to deal with the National Incumbent
• Concern that Deregulation can lead to loss of
income for a nation without taxation
• Telecommunication has traditionally been a
contributor to national wealth

17. Why Limited or no Deregulation
• Fear that smaller operators will lead to
degradation in overall service
• Fear that smaller operators will not have the
resources to deliver on promises
• Fear that smaller operators will, through price
competition, wipe out communication
revenues leading to downsizing and high
unemployment

18. Reality
• Just look at Bahrain
• Smallest country in the Region
• Least Wealth
• Yet market supports so many players and even more setting up shop every
day.
• Overall employment grew significantly
• Overall outbound traffic (in minutes) grew significantly
• Size of the market grew significantly
– Suggest that Regional Aspiration be Driven by the
Bahrain Model for Achieving Them!