Nº 5 2012 > Arab Book 2012
Arab Book 2012
A vibrant ICT market in the Arab region
The impact of regulation
The Arab Book 2012, to be launched by ITU before the end of the year, chronicles the dramatic growth in the information and communication technology (ICT) sector over the past decade in the Arab region. In contrast to the trends outlined in the Arab Book 2002 — when Arab States were in the initial stages of restructuring their telecommunication sector to expand access to basic services — current trends show that telephony and basic data services are largely available, with some countries nearing or surpassing 100 per cent penetration for mobile services. Regulators, operators and consumers are now turning their attention towards seeking greater access to broadband services.
“Policy-makers are shifting focus from simply establishing policies to facilitate growth in telephony and basic data services to more advanced communication services. Due to the growth in Internet services and applications, and broadband access in particular, the Arab Book 2012 includes several topics not addressed in the previous editions, including spectrum management in the digital economy, broadband strategies and plans, the impact of ICT on cross-sector issues and policies for converged services, applications and content,” says Brahima Sanou, Director of the ITU Telecommunication Development Bureau (BDT).
While liberalization and regulatory independence are discussed in the Arab Book 2002, the Arab Book 2012 puts even greater emphasis on maintaining a pro-competition environment, encouraging innovation, and expanding affordable ICT access for all. It also goes into greater depth on the regulatory challenges of converged services, such as rules for voice over Internet Protocol (VoIP) and voice over broadband (VoB). It looks at social media, protection of intellectual property rights, climate change and the environment, cybercrime and cybersecurity, financial and banking services, free open-source software, education and professional training, health care and e-government.
The Arab Book series serve as a dynamic tool for Arab States and should continue to be reviewed and updated, as needed.
Affordability and growth
Many countries in the Arab region are now focusing on ensuring that citizens and businesses are able to enjoy access to high-speed broadband networks through the development of national broadband plans that build on ICT strategies. In this vein, 50 per cent of Arab countries have adopted or plan to adopt a national broadband plan, strategy or policy by the end of 2011.
Cost is one of the major barriers to ICT access. Arab leaders identified affordable access to ICT as the fifth pillar of the Arab ICT Strategy 2008–2012, which mandates “assuring the balance between tariffs for services and level of income, to make it affordable to the majority of the citizens of the Arab States, especially in less developed States.”
Jordan’s strategy considers the digital divide to be mainly a matter of tariffs, in particular for broadband access. In Bahrain, despite witnessing a 40 per cent decline in broadband tariffs, the regulator still perceives affordability as the primary barrier to greater penetration and a more equitable spread of ICT services.
A March 2011 benchmarking study conducted by the Bahraini regulator on tariffs for basic access to broadband revealed that the average tariff for mobile broadband in the Arab States is 40 per cent cheaper than fixed broadband packages.
Evidence from several countries shows that price reductions in services were accompanied by sharp growth rates in the number of subscribers. Saudi Arabia witnessed a 90 per cent reduction in mobile broadband tariffs in 2010 as a result of growing competition between the three licensed operators. This triggered 400 per cent growth in the number of mobile users and a doubling of the volume of traffic on mobile networks. At the end of 2011, Saudi mobile operator, Mobily, reported that it had 8.7 million mobile broadband subscribers, compared to 2.3 million at the end of 2010. In addition, the volume of data traffic grew from 85 terabytes per day in 2010 to 163 terabytes per day in 2011, while Internet traffic increased 87 per cent in 2011, with a 475 per cent increase in BlackBerry data traffic alone.
Feature phones that allow only for voice and basic data services continue to dominate the Arab market. In 2011, smartphones comprised just 18 per cent of the 200 million mobile devices sold throughout the Arab States and Africa. The good news is that the penetration rate for smartphones is set to increase throughout the Arab region because of falling prices for devices and greater consumer demand. In the United Arab Emirates, for example, 70 per cent of mobile devices are forecast to be smartphones by the end of 2016, compared with 47 per cent at the end of 2011. In Saudi Arabia, smartphone penetration is expected to increase from 25 per cent in 2011 to 49 per cent by 2016.
Better quality of life
Countries throughout the Arab region have made great strides in using ICT to address the Millennium Development Goals, as well as the goals set by the World Summit on the Information Society, Connect Africa Summit, Connect Arab Summit and the United Nations Convention on the Rights of Persons with Disabilities. Broadband is viewed as a critical component for achieving various development targets aimed at improving the quality of life for all, and promoting cultural diversity and human rights.
For example, Bahrain has used ICT to help achieve health-related goals by establishing electronic health records and interconnected data systems that link all hospitals, health centres and clinics. In particular, the system tracks child immunizations, enabling doctors to more easily follow up on vaccinations.
The Qatar Assistive Technology Center (Mada) showcases a host of assistive technologies, such as text-to-speech software for the blind. The United Arab Emirates has implemented the Echo of Silence project, which provides training and assistive technologies to people with hearing and speech disabilities. And an ICT project in Oman trains teachers to enable children with disabilities to use computers.
Protecting the environment
Several Arab countries have launched specific initiatives to ensure that ICT applications can help protect the environment. For example, in Egypt, the Green ICT Strategy adopted by the Ministry of Communications and Information Technology in August 2010 is composed of three main programmes: raising awareness of green ICT; electronic waste management; and ICT solutions for a more sustainable future. In Qatar, ictQATAR has developed green ICT policies and guidelines with the aim of providing incentives for ICT growth while reducing greenhouse gas emissions and energy consumption. In the United Arab Emirates, the Emirates Energy Star initiative was introduced by Etisalat and Pacific Controls in October 2010, and inaugurated by the Minister of Environment. The programme aims to reduce the consumption of energy and the carbon footprint of organizations in the country. This involves retrofitting existing buildings with ICT-enabled machine-to-machine systems to increase energy efficiency through managed energy services.
Many programmes have been initiated in the Arab region in order to deal with the negative impacts of ICT on the environment. These programmes mainly target the assessment of e-waste and the establishment of e-waste recycling structures, for example the programmes in Algeria, Jordan, Morocco, the Syrian Arab Republic, Egypt, Tunisia and Saudi Arabia.
Other Arab initiatives aim at recycling used computers and digital equipment. These include the Moroccan Green Chip project for the collection of used digital equipment and e-waste recycling and the Jordanian project for reusing computers, which is overseen by the Jordan Environment Society.
There are also innovative public-private partnership initiatives, for example, Qtel’s e-waste recycling programme. Launched under the auspices of the Ministry of Environment and the Qatar National Campaign for the Recycling of Mobile Phones, the aim is for all Qtel shops in Qatar to provide dropboxes for e-waste.
The changing role of regulators
The establishment of regulatory authorities in the Arab region over the past decade has resulted in 16 of the 22 economies in the region having a regulatory authority. In the light of rapid technological development and service innovations, countries are increasingly moving towards the adoption of technology-neutral and unified authorization frameworks. These frameworks allow licensees to provide all forms of services under the umbrella of a single authorization, using any type of communications infrastructure and technology capable of delivering the desired service. Licences (typically coupled with unrestricted entry) provide a platform for better competition.
Universal access strategies
Many governments have taken a more pro-active role to promote ICT in order to ensure universal access and reduce or eliminate the digital divide within their borders. For example, the Egyptian Ministry of Communications and Information Technology has initiated several projects to minimize the digital divide. Most notably, this ministry has established community centres as part of its “IT Clubs” initiative, which aims to make ICT available throughout the country. Working with the private sector, non-governmental organizations and the educational sector, the ministry makes available laboratories fully equipped with computers, printers, networks, access to the Internet, and trained instructors. These computer laboratories are mainly located in schools, clubs, universities and youth centres.
Sometimes market forces are not enough to ensure access in rural areas. In Saudi Arabia, for example, licence obligations for mobile operators used to exclude areas with fewer than 5000 inhabitants from the coverage obligations. This left almost 18 per cent of the population distributed over more than 13 000 localities without access to telecommunication services. In 2006, the Saudi Ministry of Communications and Information Technology issued a Universal Service Policy to extend universal service to localities of more than 100 inhabitants, with services to be made available — within 10 kilometres — to communities of fewer than 100 inhabitants. Under the policy, any award of universal service funds should encourage competition between licensed operators. The resulting competition between the three mobile operators has resulted in technology innovations, particularly in using 900 MHz spectrum to deliver high-speed packet access services.
Other Arab countries are pursuing a hybrid approach, combining universal service that directly reaches all homes and businesses, with community centres. The Omani Telecommunications Regulatory Authority is seeking to expand access by establishing telecentres and by implementing universal service obligation projects — through a public tendering process — to cover rural areas.
Most Arab countries have established regulations for infrastructure sharing. Co-location and site sharing are mandated in more than half the countries, while sharing among mobile operators is permitted in two-thirds of the countries. In 2009, Delta Partners estimated that about 200 000 towers were in operation in the region, with this number expected to increase by 50 per cent during 2010–2015. Mobile operators in the region could save USD 8 billion in capital expenditure through tower-sharing arrangements, and a further USD 1 billion annually on the construction of new towers. Regulators in several Arab States are starting to support this new trend.
International mobile roaming among the Arab States is plagued by high charges. The Arab Regulators Network has tried to address this, but proposals made to the Council of Arab Ministers have not yet been accepted.
In February 2012, the Ministerial Committee of the Gulf Cooperation Council decided to introduce a price cap for all mobile operators to reduce prices for roaming among its six countries. In this context, Bahrain’s Telecommunications Regulatory Authority has reduced roaming tariffs across Gulf Cooperation Council countries by 75 per cent.
Bahrain and the United Arab Emirates had already imposed transparency measures on licensed operators, requiring them to send text messages with pricing information to their roaming customers.
Arab countries should envisage handling international roaming rates on a regional basis among governments and regulators.
Refarming spectrum for new technologies
Regulatory approval for deployment of newer technologies on the same spectrum (referred to as spectrum refarming) is essential for the roll-out of wireless broadband services. For example, the Communications and Information Technology Commission of Saudi Arabia has adopted a technology-neutral approach in its spectrum policy for universal service providers to allow the provision of high-speed access in rural areas. In 2010, it authorized universal service providers to deploy 3G services over the 900 MHz band, which had previously been allocated for 2G operations only.
Many countries have adopted plans for digital broadcasting transition, with the main objective of freeing up spectrum that can then be used for telecommunication services, particularly mobile broadband. Digital terrestrial television is already available in six countries, with the analogue switch over having taken place in these countries, and set to occur by 2015 in an additional seven countries. More than 80 per cent of households in the Arab region are expected to receive digital television by 2015. Policy-makers throughout the region have plans to release an unprecedented amount of spectrum over the next few years for new mobile services.
Internet exchange points
Ten Arab countries have set up Internet exchange points, while only two have taken part in regional projects. As a result, most Arab Internet traffic is exchanged outside the Arab region, through access points in the United States and Europe. However, there have been some direct exchanges between service providers within the region, and some recent experiments on Internet exchange through access points. The need to expedite Arab cooperation in this area is clear.
Transition from IPv4 to IPv6
Few Arab countries have a national plan for the transition from IPv4 to IPv6, and — among those that do — implementation is still in the early stages. The ITU Arab Regional Office has initiated strategic efforts to assist Arab countries to promote and accelerate the transition. These efforts include capacity building, reviewing current national plans, and assisting in drawing up national plans based on stakeholder commitment and international best practice.
Cloud computing initiatives in the Arab countries are still in their early stages, and are generally being led by local operators. This is the case with Etisalat in the United Arab Emirates and Mobily in Saudi Arabia. Meanwhile, the Qatar Cloud Computing Initiative, the first cloud platform in the Arab region, developed by IBM in 2009 is being driven by three universities, led by Carnegie Mellon University in Qatar. The objectives of the initiative are to advance research previously constrained by time, resources and overburdened systems, and to open the cloud infrastructure to local businesses and industries in order to support oil and gas exploration. This platform is fitted with an Arabic language web search engine.
With a critical mass of Arab users in many countries, governments have begun to recognize social media’s potential to develop more transparent, participatory and inclusive governance models.
Some Arab government officials and politicians are active contributors to social networking platforms such as Twitter and Facebook. For example, the Bahraini telecommunications regulator launched its Twitter presence in April 2011 as part of an initiative to promote openness and transparency, noting that “the usage of social media such as Twitter is growing tremendously, as it is complemented by the affordability of broadband services in Bahrain. The online community has become a popular new medium for people’s communications, and the telecommunications regulatory authority understands the importance of adopting the new technology to interact with individuals both online and offline.”
Arab blogospheres and communication networks create a space in which citizens are able to engage in debate on social and political issues, and even hold discussions with national leaders. From Morocco to Bahrain, the Arab world has witnessed the rise of independent vibrant social media and steadily increasing citizen engagement on the Internet, which is expected to attract 100 million Arab users by 2015.
Governments and authorities use different measures to regulate Internet access and online activities. These include print and publication laws, penal codes, emergency laws, anti-terrorism laws, the terms and conditions of Internet service providers’ licences, as well as telecommunication decrees. Some Arab countries have enacted temporary blocking measures in response to the perceived threats from social media. For example, Twitter was blocked in January 2011 in Egypt in an effort to stop protesters from using the site to organize, and to get information out to the public.
The Arab Book 2012 includes recommendations to help guide policy-makers and stakeholders as they seek to adapt regulatory structures to new and innovative technologies. These recommendations focus on policies to promote ICT access and adoption; creating an enabling environment; spectrum management in the digital economy; universal access strategies; policies for new and converged services, applications and content; and, ICT and cross-sectoral matters.
Arab Book 2012 was prepared by ITU experts, with Taieb Debbagh, Amr Hashem and Bouchaib Bounabat as lead authors, under the supervision of the ITU Regulatory and Market Environment Division, and in close coordination with the ITU Arab Regional Office. The report was edited by the consulting firm Telecommunications Management Group, Inc. (TMG).