The telecommunications industry in the Middle East has evolved in a unique manner
Mobile phone penetration is higher than the world average of 72 per cent, reaching as much as 173 per cent in Saudi Arabia and is nearly 156 per cent in the UAE. But the landline sector is severely under-developed. In 2009, just 10.8 per cent of Middle East nationals had access to fixed-line services.
One of the main reasons for the lack of development of the landline market is that the sector has been dominated by state-owned and other monopoly players. Such operators are frequently criticised for the poor quality and range of services offered. The absence of competition has prevented the sector from evolving and investing in the latest infrastructure.
Despite this, the region, with its predominantly young population, has a rapidly growing appetite for the internet. For mobile operators this offers a clear opportunity for developing mobile internet services, but it is only through the liberalisation of the fixed-line sector that the Middle East will truly harness the benefits of the internet.
The region’s governments are all keen to develop a culture of entrepreneurism, but as long as fixed-line monopolies are maintained, access to the internet – an important incubator of creativity – will be constrained.