While the global telecoms markets have been struggling in turbulent times, most markets of the Middle East and North Africa (MENA) experienced solid growth in 2000 and 2001. The region's data communications services have been no exception, with providers in MENA having experienced a dramatic rise in demand as well as investment in 2001, asserts a recently released IDC report.
IDC forecasts that the region's data communications services market, which includes managed data network services (MDNS) and leased lines, will grow from a current $743.6 million to $1.4 billion by 2006.
"Bucking Western Europe's slowdown in infrastructure expenditure over the past two years, the MENA region has seen dramatic increases in investments by incumbents, as well as the few new entrants in the data communications services market," said Mohsen Malaki, senior analyst at IDC, adding that “the bulk of data communications investment has been made in national backbones, which have facilitated the provision of new managed data network services.”
The leading service providers in the region are now reaping the rewards of heavy investment in backbones that can facilitate the provision of MDNS, while the laggards are only now marketing digital leased lines to their analog customers. IDC believes that the investment by service providers is justified by the tremendous demand for the newly introduced managed data network services in the more advanced markets of the region, and for digital leased lines in the less developed markets.
"Unlike the more advanced markets of Western Europe, where MDNS growth is fueled primarily by uptake in IP VPN, frame/cell services will be the engine of growth for MDNS in MENA," said Malaki. IDC predicts a slow uptake of IP VPN services, with a minimal impact on MDNS revenue in the region until 2005.
The gradual decline in leased line revenue witnessed in much of Western Europe is not yet on the horizon in the MENA region. In fact, leased lines will continue to grow over the forecast period, albeit at a much slower pace than MDNS. This will be due primarily to the limited rollout of MDNS in many of the region's countries, which leaves leased lines as the most viable option for businesses. This is compounded by the late introduction of high bandwidth leased lines in several of the countries, which are currently witnessing a boom in digital leased line connections. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
