Slow Liberalisation

In many countries of the MENA region liberalisation of the telecom sector has been slower than in most other parts of the world. Monopoly telecom operators owned by the national government still exist in several countries of the region, especially in the fixed line sector. This situation has been changing as many countries have started to move towards greater openness, either under pressure to meet objectives for membership of the WTO, or, as in the case of Syria, to meet conditions attached to telecom infrastructure investment financed with support from the EU. Even where there has been partial privatisation of telcos, in many countries the government continues to hold a controlling stake.


Mobile Investment Drives Cable Demand

The mobile telecom sector has been generally more open than the fixed line sector, with greater encouragement of competition. In many countries of the region expansion of mobile networks has been a strong driver behind expansion of fibre optic networks. Additional capacity is needed for the long-distance traffic needed to route wireless calls, but fibre optic cable is also sometimes used to link base stations to the main network. New entrants into the mobile sector in a national market may need to buy transmission capacity from the country’s main telco, which is likely to be a competitor in the provision of mobile services. In these circumstances the new mobile operator may prefer to build their own network and avoid making payments for capacity on other operators’ networks. This situation occurred in Saudi Arabia, for example, where a consortium (Mobily?/?­

Bayanet?/?ITC) is making a major investment in a new national fibre optic network, rather than relying on the network operated by Saudi Telecom Co.


Fixed Lines Low Priority

Investment in fixed line networks has not been a high priority in most countries of MENA. Rapid expansion of mobile services has generally satisfied consumers’ needs for basic voice services. To satisfy requirements for services with higher bandwidth, there has been quite strong growth in DSL subscribers in some countries of the region. In particular, DSL services have expanded quickly in some of the countries of North Africa, such as Morocco. In other, wealthier parts of the region, DSL has grown quickly, though fibre-based access networks are already being considered to allow even faster broadband services. DSL, where it has been introduced, generally leads to enhanced demand for copper telecom cable, including internal cables used for connecting equipment within exchanges and sometimes upgrade of external cables to improve the end-to-end quality of local loop connections.


WLL Encroaches on Copper

Traditional fixed lines based on copper twisted pairs have continued to be installed in a few countries of the region. There has been strong expansion in fixed lines requiring expansion of copper cable access networks in Iran and, on a smaller scale, in Syria. But in some other countries of the region fixed line expansion has not led to much demand for external copper telecom cable. Wireless local loop (WLL) technology, which eliminates the need for installation of copper cable to the customer’s premises, has been adopted, for example in remoter areas of Saudi Arabia, and in parts of Iraq, where basic telecom infrastructure needed to be installed quickly.


FTTH Projects

In many parts of the world fibre-to-the-home (FTTH) projects have taken a higher profile over the last two years. This has been one of the main factors underlying the recovery in global demand for fibre optic cable. The largest initial roll-outs of FTTH networks have been in Japan (NTT) and in parts of the US (areas served by Verizon), but telcos in other countries of Asia (e.g. Korea and Taiwan) are also starting to invest in FTTH networks. Even in some countries where deployment of fibre in access networks all the way to the home is not being pursued currently, expansion of broadband capabilities via more extensive deployment of fibre optic cable in access networks (FTTx: fibre-to the-node, fibre-to-the-building, etc.) is being taken up. There has been growing interest in FTTH in the wealthier areas of the Gulf region (e.g. in Kuwait and Dubai), as FTTH to deliver high-speed broadband services is seen as a necessary element of having world-class telecom infrastructure. However, there is a strong divide between these small, very rich countries and many other parts of the region, so it seems unlikely that there will be any widespread deployment of FTTH in the rest of MENA in the near future.