The January 5 launch of LINKdotNET in Jordan extends a lot further than simply the appearance of a new Internet Service Provider (ISP) on the crowded and not very profitable Internet market of Jordan, asserts a new research by the Arab Advisors Group.
The launch of LINKdotNET in Jordan marks a significant move by its mother company, the Egypt-based Orascom Telecom, to extend its operations in Jordan from mobile services—through Fastlink, in which Orascom Telecom holds a majority-controlling stake—into Internet services.
The Fastlink-LINKdotNET couple signifies an early crystallization of Jordan’s second Integrated Communications services Provider (ICP) to be. This is indicative of how GSM duopolies can be effective competition catalysts in Jordan and other Arab markets as well.
LINKdotNET’s explicit statement that it will not wage a price war against its competitors, but will focus on service and quality, is indicative of a strategy to lure in high paying Internet subscribers who are also high paying subscribers of Fastlink’s mobile services, Arab Advisors Group analysts assert. LINKdotNET’s market entry strategy is hinged on creating and leveraging synergies with its mobile services sister company, Fastlink, whose subscribers would be ideal targets for bundling offers and special promotions.
“The fact that Orascom Telecom now owns GSM (Global System for Mobile communications) as well as Internet ventures in Jordan, indicates its future plans to become an ICP in Jordan once the country liberalizes its PSTN (public switched telephone network) and ILD (International Long Distance) market in 2005”, wrote Sarah Alalul, Arab Advisors Group’s Jordan analyst, in the report.
“By becoming an ICP, a company such as Orascom Telecom, would offer a one-stop shop of data and telecommunications solutions for its target market. This could be an integrated suite of voice—both local and ILD—high-speed data and Internet communications services,” Alalul added.
Today, Jordan Telecom remains the only ICP in Jordan. Jordan Telecom and its subsidiaries, MobileCom and Global One–Jordan, offer PSTN, ILD, data, Internet and GSM services and has un-operational licenses for payphone and paging as well.
With the eventual liberalization in 2005, Jordan’s regulator is expected to award one or more new ILD and PSTN licenses in the country. The Arab Advisors Group believes that Orascom Telecom would be one of the most interested parties to acquire such licenses. With its Fastlink subsidiary already having in place a Fiber Optics and Microwave-based transmission network for its GSM service, an eventual foray into the ILD and PSTN markets would be a very feasible endeavor.
The existence of duopoly GSM markets in major Arab markets, like Egypt, Morocco, Jordan, Kuwait and Lebanon will be a boon for eventual liberalization in the ILD and fixed markets. “The presence of strong, profitable mobile operators who own extensive transmission networks of their own in big Arab markets means that alternative networks are already in place in these markets,” noted Jawad Abbassi, Arab Advisors Group’s president.
“Adding International exchanges to offer ILD service as well as capitalizing on the existing transmission infrastructure and radio towers to offer fixed and datacomm services would not be difficult to do and will contribute to enhancing the mobile operators’ profitability”, Abbassi added.
In Morocco, for example, MediTel, the second GSM operator, can already offer ILD services to its subscribers since its license terms allow that as of the start of this year. Also, the two GSM operators in Egypt will surely see the attraction of their own International exchange independent of Telecom Egypt’s monopoly when competition eventually starts in that huge Arab market. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
