13 Aug 2008

Middle East market liberalisation offering opportunities for strategic investors

Most of my attention is on the Middle East right now - we are working hard to improve further one of the two largest events in the Com World Series, our annual conference and exhibition in Dubai, at which we gather telco execs from all over (and beyond) the region. This year's iteration will take place 15-16 December. So I find myself paying most attention to news items relating to the Middle East this week.

Telecoms.com reported yesterday that the Government of Oman has opened bidding on a new fixed line telecommunications licence to be made available in the country, opening up the market to overseas investors. As the report notes, this may be an attractive opportunity for some, given that Oman's fixed line penetration rate is approximately 10%, with even lower broadband penetration. There is clearly ample room for growth. However, we will watch with interest to see if the overall scale of the opportunity catches the attention of major regional and global players.

As the telecoms.com story point out, Oman is not a very large market, with a population of approximately 2.75 million. While that population enjoys good living standards, the county's oil reserves are limited in comparison with those of some of its neighbours, which may make for an uncertain economic outlook.

A far larger market which will pique the interest of some in 2008 is the Islamic Republic Iran, home to over 70 million people. Earlier this year, I heard first-hand about a number of investment opportunities in Iran. Both our Eurasia Com conference in Turkey and our Russia & CIS Com conference in Moscow were attended by an Iranian Government delegation keen to flag up these opportunities. Infer what you will from the fact that the Iranian group was speaking to an audience drawn in part from Russia's 'big three' mobile operators (MTS, MegaFon, Vimpelcom) on each occasion.

At both event, I heard about how mobile penetration of only around 40% means that the new licensee will enjoy access to a market with a high level of pent-up demand. In the short term, the Iranian Government expects the new operator to acquire over 5 million subscribers by 2010. One attraction of the new licence may prove irresistible - the new operator will enjoy two years' exclusivity in the provision of 3G services.

This is just one of three opportunities in Iran, the sale of WiMAX-friendly spectrum/licences and the privatisation of incumbent fixed-line carrier TCI being the others.

In the next few weeks, I will be working to secure the participation of a high-level Iranian delegation at our Dubai event in December. Delegates from around and beyond the Middle East are sure to be interested to keep abreast of these developments.

It is exciting to be working on one of Informa Telecoms & Media's most important events and it's been gratifying to receive unsolicited expressions of interest from companies like Vodafone and Turkcell. The UK-headquartered global cellco will be represented on the panel of speakers by Hatem Dowidar, CEO the company's Partner Markets unit. Vodafone made the news earlier this year by confirming it's entry to the Qatari market, purchasing that country's second mobile licence. Turkcell, represented at our conference by Tayfun Çataltepe, Chief Corporate Strategy Officer and International Expansion Officer, was reported earlier this year to be interested in acquiring a stake in Syrian MNO SyriaTel, albeit with a background of US Treasury Department pressure to drop out of the deal.

With so much going on in the region, it is proving very absorbing to be studying developments and working to get the big players on board for our conference.