Since 2000, it has been highly regulated by the government-owned Syrian Telecom Establishment (STE), which is responsible for overseeing the entire sector and issuing licenses, but things are about to change.
The country’s duopoly of mobile operators, MTN and Syriatel, have both been functioning under BOT contracts, meaning the state has ultimate control over everything from offering to pricing, and everything in-between. It is becoming apparent, however, that the BOT arrangement – which does not allow for the introduction of a third participant – is becoming obsolete as market conditions evolve.
The PPPs that formed to initially lay the foundations for Syria’s cellular network did prove fruitful, nevertheless. As Ismail Jaroudi, CEO of MTN Syria, says, “The collaboration [between the state and private sector] resulted in operational success in terms of rations, KPI, subscribers, and returns to both the project and the state.”
The downside, though, is the “arduous, time-consuming process” the company must go through to expand coverage, increase service centers or even define new target segments, adds Mr. Jaroudi. And anything that one company proposes to do that will ultimately raise revenues (of which the government keeps 50%) must also be approved in the other company, thereby reducing competition between the two and discouraging better quality, service and tariffs from which end customers can benefit.
Fortunately for Syria’s millions of mobile subscribers and two operators, new telecom laws are in the pipeline that are due to open the door to new competition. MTN Syria and Syriatel are also pushing for the conversion of BOTs to freehold mobile operator licenses with revenue sharing.
In this restricted market (with just about 50% mobile penetration), MTN Syria has found that its mother company’s international experience has come in extremely useful. “In a telecom industry with lower margins, efficiency is key,” explains Mr. Jaroudi. “As part of the MTN Group, with a presence in over 21 countries, we can leverage on the efficiencies from a wide, mature and diverse network.”
Moreover, while STE is currently modernizing the telecom network to allow services such as VOIP and video on demand, MTN is also pursuing state-of-the-art technologies and advances in its network and facilities.
“We already have 3G coverage in all the main cities. Now we are trying to roll it out further; we hope to develop solutions dedicated to the rural areas,” comments Mr. Jaroudi.
He also says that MTN Syria will soon look into 3G LTE (Long Term Evolution), and all ongoing modernizations and expansion are geared towards this technology.
0 COMMENTS