Growth will encourage investment in Jordan after political protest waver

With the return of relative calm to Jordan's political scene after protests for political reforms in early 2011, the country's telecoms sector is repositioning itself to restore investor confidence and attract funds for expanding and upgrading the network. Potential investors are likely to be hesitant about committing to long-term investments until political stability returns to most countries, according to Business Monitor International.

Although Jordan boasts relative stability, it is not insulated from the wider impact of political unrest in the Middle East and North Africa. However, it is noteworthy that increased government spending is likely to bolster private consumption and by implication, subscription to higher value telecoms services. Increased subscriptions to the high-value service of data are likely, particularly over wireless networks.

Mobile market leader Zain launched 3G network services in March 2011 to break Jordan Telecom's monopoly of the market. Competition between Zain and Orange is expected, with Zain's rapid network expansion plans and the increasing availability of low-cost 3G-enabled devices likely to boost the take-up of 3G services.

Meanwhile, there is an increasing awareness of 3G networks as social networking sites such as Twitter and Facebook and video streaming sites such Youtube. These played a key role in mobilising people for anti-government protests across the Middle East and North Africa and are accessible over 3G networks and with mobile devices. The growth outlook for Jordan's 3G market is therefore positive, and will likely account for up to 25% of total mobile subscriptions by 2015.

Based on market data published by the three major mobile operators and estimates for iDEN operator Xpress, Jordan's mobile market grew by 7.1% y-o-y to reach 6.964mn subscribers at the end of 2010 - this reflects a market penetration of 114%. The official figure from the TRC is slightly lower because the regulator does not include subscriber numbers for Xpress. While the mobile market will likely trend upwards over the next five years, growth rates will likely be lower towards the end of this period. Mobile penetration is expected to reach 133% by 2015.

The broadband market registered strong growth in 2010 with estimated net additions of about 77,000 customers, most of them on WiMAX networks. According to the regulator's data, the number of WiMAX subscriptions increased by 182% y-o-y to reach 92,490, while ADSL connections grew by 15.8% to reach 192, 846 subscribers at the end of 2010. Jordan Telecoms continues to dominate the ADSL market with a market share of more than 83%. Meanwhile Umniah and wi-tribe account for about 40% of the WiMAX market.

Broadband penetration in Jordan is forecast to increase from 4.8% in 2010 to about 11.7% by 2015. Meanwhile, the growth of the broadband market, particularly WiMAX networks, is set to be the bane of fixed-line voice subscriptions. This will be through the use of VoIP services, which becoming popularity in Jordan. The decline of fixed-line connections will therefore likely continue over the next five years, with penetration falling to about 6.8% by 2015.

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