More International Calls Running over Cellular

International traffic from cellular phones outstrips those from fixed lines in Jordan according to a new report from the Arab Advisors Group. International telecom call traffic constituted the highest revenue share of total traffic revenues of Jordan Telecom and stood at 60% of total traffic revenues in 2003. Counterbalancing a strong trend of traffic migration from fixed to mobile networks, is an impressive growth in fixed line Internet traffic. Jordanian dialup users spend an average of 37 minutes per day on the Internet.

The boom in Jordanian international GSM traffic stems from the traffic substitution effect observed as well as the clear preference of many expatriates to use prepaid mobiles for their international calls. This makes it very clear that Fastlink, Jordan's largest GSM operator that competes with JT's MobileCom, could be very eager to have its own international gateway after JT's ILD monopoly expires in 2005. Jordanian GSM and fixed line users subscribers made an average of 12 international call minutes per month and received an average of 14 international minutes per month in 2003, the Arab Advisors Group has calculated. On the mobile and fixed front, while total mobile to fixed traffic exceeded that of fixed to mobile traffic by more than 26%, average minutes per month from fixed to mobile lines were more than 55% higher than from mobile to fixed. This can be explained by the much larger GSM subscriber base in the country.

Another bright spot in Jordan is the local dialup Internet traffic growth. "In 2003, the Internet local traffic increased by a rate of 282% compared to 2002. The Internet local traffic volume constituted 25.7% of total local traffic (voice and Internet) in 2003 while it only constituted 7.6% in 2002." Faisal Hakki, Arab Advisors Group's research analyst wrote in the report. "The Arab Advisors Group believes the Internet local calls will continue on increasing because of the growth in Internet usage, which however might be hindered by the possible growth of GPRS usage in the country and the increasing migration to the ADSL service." Mr. Hakki added.

The Arab Advisors Group believes that the anticipated competition in fixed line services (including ILD) expected in 2005, the launch of a radio Trunking operator (effectively the third cellular operator) in May 2004, and the granting of a third cellular license this year (effectively the fourth cellular license), will be strongly felt by all operators in the market. With a lot more competition on the doors, the winners will be the ones that understand that telecom services are increasingly becoming a commodity-like service. As such, attention to costs, enhanced efficiencies and economies of scale are the factors that would decide the future winners."

Posted to the site on 22nd April 2004