Opportunity rising in Jordan
A young, growing population. Relatively low mobile penetration rates and Internet users. A modernising economy and infrastructure. It’s safe to say Jordan is rife with opportunities for telcos looking to grow their customer base.
It’s safe to say Jordan is rife with plenty of opportunities for telcos.
Compared to some of the other markets in the Middle East, Jordan has a relatively low mobile penetration rate. Similarly, just a little over 60% of the population uses the Internet, according to the CIA World Factbook. Thirdly, it has a very young population – with a median age of just 22.5 years – and a rapidly growing population, both through a high birth rate and immigration.
In sum: there are tremendous business opportunities for telcos to reach new customers throughout Jordan.
The main operators in Jordan are Orange Jordan (part of Jordan Telecom Group), Zain Jordan (part of Kuwait-based Zain Group), Jordan Telecom, and Umniah (mostly owned by Bahrain-based Batelco). According to the Oxford Business Group, so many operators in the market has led to fierce competition, leading to lower prices for consumers, particularly since the introduction of Umniah in the mid-2000s. That competition has, according to a May report from Arab Advisors Group, in Jordan having the lowest average prepaid cellular package prices in the Middle East.
According to an analysis from Kylie Wansink at telecommunications research site Budde Comm, mobile broadband is a key growth area for Jordan, with the introduction of 4G services and a growing ICT industry.
“Jordan is a unique market in many ways, due to the huge population growth in the last decade and the influx of refugees into the country,” her report says. “Jordan has a well-developed telecommunications infrastructure and the industry is preparing itself for the next wave of developments relating to 5G and IoT/M2M.
“The development of a national broadband network based on fibre is well underway and Orange Jordan remains the largest fixed network operator in the kingdom. Zain Jordan is also investing in fibre-based network infrastructure.
“The mobile sector in Jordan is challenging for the three major operators as they all hold roughly the same market share and are highly competitive. Zain Jordan and Orange Jordan both launched 4G LTE services ahead of Umniah - which saw a decline in mobile subscribers in 2016 as a result.
“However, the launch of 4G LTE services in general, has led to a growth in data revenues for the mobile operators and expanding data offerings will be a key focus area moving forward.
Jordan is host to a growing number of ICT companies and has emerged as a technology start up hub for the Middle East, made possible due to a focus on ICT education and a regulatory environment conducive to ICT investment. It has also made great progress in the digital financial services area with support from the Central Bank of Jordan.”
Such an analysis may seem like music to the ears of telcos in terms of business opportunities, but Wansink writes there are challenges, too. “While Jordan is demonstrating positive developments towards fixed and mobile broadband development, it has some challenges including the ongoing influx of refugees from Iraq and Syria which places strain on the countries’ economy, infrastructure and society in general.”
Jordan is a unique market in many ways, due to the huge population growth in the last decade and the influx of refugees into the country.”
A report from the Oxford Business Group provides a similar analysis. “The ICT sector faces a number of challenges, most notably a heavy tax burden, exacerbated by the government’s decision to double two key industry taxes in 2013,” it states. “In addition, competition between Jordan’s big three telecoms operators has lowered prices, which benefits the consumer, but could also reduce the profitability of expanding 4G services.”
Yet the report says the Jordanian market remains “strong and stable,” as well as “mature, diverse and modernised,” with further potential for growth. As the Oxford Business Group analysis concludes: “Despite rising regional competition and slower domestic economic growth and a tough regulatory environment, ICT remains one of the kingdom’s greatest strengths, and its ongoing expansion remains high on the list of government priorities. With a history of forward-thinking tech and telecoms development, Jordan is well positioned to continue capitalising on its bright population.”