While Qatar Telecom (Q-Tel) is not an operator to let a good monopoly go to waste, it is expected that consumers will be better served when some level of liberalization settles into the small and rich gulf state in and after 2005, asserts a newly released report from the Arab Advisors Group.
Q-Tel, Qatar’s publicly traded and monopoly telecom operator, solely provides fixed, mobile, internet and datacomm services to the small rich gulf state. By end of year 2001, Q-Tel had 167,446 landlines and 177,929 Global System for Mobile Communications (GSM) connections, translating into penetration rates of 27 percent and 29 percent respectively.
The report indicates that despite regionally impressive penetration levels, the Qatari market is below its true potential when compared to the penetration levels in neighboring United Arab Emirates (UAE) and Bahrain.
“The average monthly revenue per user for Public Switched Telephone Network (PSTN) service in Qatar stood at $122 in 2001 with the bulk of it coming from international long distance (ILD) service. GSM service’s monthly ARPU (Average Revenue Per
User) stood at $60 in the same year,” Sami Sunna’, author of the report, noted. “The high ARPU’s and relatively high penetration rates reflect the inherent price insensitivity of the rich market to essential telecom services.”
“While Q-Tel did reduce ILD rates recently, the partially privatized operator is savvy enough to fully leverage its monopoly status; its net profit margin in 2001 was a full 56 percent of revenues. For example, GSM prepaid service in Qatar was only launched in 2000, six years after the launch of the GSM service in the country. This manifests the comfort that the monopoly situation avails to Q-Tel,” Sunna’added.
The report shows that that there is a strong potential in the Qatari market when it comes to the GSM, internet and datacomm services. These services will provide interested parties with an incentive to enter into the Qatari telecommunication market once liberalization matures, which is expected to materialize in 2005. With this in mind, the Arab Advisors Group projects Qatar’s cellular subscribers to grow by a compounded annual growth rate (CAGR) of 21.4 percent between 2001 and 2006 to reach a penetration rate of 70 percent. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
