Mtn Syria – About Essay Example

March 2001, Areeba commenced commercial operations followed by SyriaTel a month later. By the end of June that year, there were a total of 103,000 mobile subscribers, with Areeba having 56,000 and SyriaTel having 47,000. However, the number increased significantly to reach 403,381 by the end of 2002 with both operators almost equally sharing the subscriber base. In 2003 Q2 pre-paid services were introduced while connection fees and operating tariffs were reduced leading to a doubled subscriber rate which stood at 1.2 million by year-end. This stimulated market growth resulted in SyriaTel capturing over half (54%) of the market once again leaving its competitor behind.

The impressive takeup in the mobile market in Syria has resulted in UAE-based Etisalat expressing interest in acquiring Syria's third GSM licence in June 2006. Etisalat plans to hold talks with STE to achieve this goal, but the licence award's timing is uncertain and may be heavily influenced by the Syrian government. The government is unlikely to prioritize further liberalization of the mobile market given the current political climate in the region. Additionally, the incumbent cellcos have contracts giving them seven years of exclusivity in the sector, pushing any new player's launch to 29 June 2009 as calculated by Areeba.

Despite regulatory obstacles and a strict regime in place in the Syrian mobile market, there is considerable growth potential with cellular penetration only at 19% by the end of June 2006 and below the regional average. STE expects the government to award them a third mobile license in mid-2009, but the cost of the license is expected to be high, especially if Q-Tel, the Qatari incumbent, participates in ramping up its regional

presence. Revenue sharing between the operator and STE begins at 30% under the current BTO contracts and increases to 50% over the license's life.

Areeba and SyriaTel are unable to compete on price due to the requirement of negotiating with STE before making even the slightest change in tariffs. This results in an uncompetitive market environment. As of November 2002, any decrease in prices was only possible after extensive conversations with STE. The government mandates that both operators have matching prices to maintain high revenues under the BTO plan. According to MTN Syria management forecast, there were only 11.7 million subscribers in 2012, however, Syria mobile subscribers were predicted to be 8.3 million in 2008 and 15.8 million in 2011 by Hot Telecom. In June 2003, Areeba borrowed $20 million from the Islamic Corporation for the Development of the Private Sector (ICD).

Areeba has utilized the investments to finance various technical development initiatives, particularly network expansion and the establishment of prepaid services branded as 'ana', launched on 1 July 2003. Areeba also recently introduced a range of new services in March 2006, such as the 'Internet and WAP over GPRS' service. Moreover, Areeba Syria has announced plans to roll out a 3G network and is currently testing the technology, as reported in June 2006.

In July 2006, MTN Group bought Investcom for $5.5 billion. In July 2007, the company merged with Areeba Syria and rebranded the wireless carrier as MTN Syria. The same year, MTN launched 3G trial services in Damascus and Aleppo. Currently, MTN holds a 75% stake in MTN Syria.

Teleinvest owns a quarter of the Network Information Generation Platform Evolution Frequency

Launch Status Network Details 2G GSM GPRS 900/1800 MHz. This network started operating in March 2001, providing bandwidths of 6MHz on the 900 band and 12MHz on the 1800 band. The subscriber base exceeded three million by December 2007, showing consistent growth between June 2006 and September 2007. However, prepaid services faced challenges due to short validity periods for recharge cards and intense competition that hindered card validity extension. To address this issue, Teleinvest plans to launch a prepaid multi-profiling product in H2-2008.

MTN Syria is implementing market segmentation and a prepaid multi-profiling approach to reach subscribers from lower income brackets. The company will continue investing in data-related technologies, such as 3G, high-speed data, and internet service provider offerings, although voice remains the dominant technology. To ensure cutting-edge technology, MTN Syria plans to replace its legacy core network with an NGN core network and install an IP transmission backbone. In 2008, the company will install over 200 new 3G sites and expand coverage in the four main cities. Furthermore, MTN Syria has requested an ISP license, which it expects to receive in the first quarter of 2008.

Ismael Jaroudi, CEO of Suppliers, disclosed that Ericsson is the primary provider of equipment, while Siemens serves as the secondary supplier. In August 2005, Areeba entered into an agreement with LogicaCMG to furnish a next generation messaging system that features improved SMS and MMS platforms.

Areeba Syria introduced the RBT service in the second half of 2005; it now has a penetration rate of about 15%. In February 2007, celco launched an enhanced version of this service called Color Ring Back Tone (CRBT). Darts, a major content service provider and partner

to telecom operators in the Middle East, collaborated with celco in signing this CRBT deal. Bharti Telesoft was the supplier. The Syrian market welcomes innovation.

By introducing new products and services, such as mobile banking, electronic prepaid vouchers, virtual top-up, and data-only cards in 2007, customer satisfaction was enhanced. The budget allocated towards these efforts accounted for 80% of the total. In comparison to the previous year's revenue, there was a significant increase by 31%, amounting to $672 million. Currently standing at 40%, it is projected that the revenue share will reach 50% next year.

Despite data revenues comprising just 6% of total revenue, there is potential for growth as internet penetration remains low at only 10%. Between December 31, 2006 and December 31, 2007, blended ARPU declined marginally from $22 to $20 despite rising penetration rates from 26% to 35%. During this period, prepaid ARPU was $15 while postpaid ARPU reached $42. The network received a substantial investment of $62 million in the year of 2007.