Esis extension / Mediterranean Countries / Alternative Networks / Sythesis of Update Memos 2

October 1999

Mediterranean Countries
Synthesis of the Update Memos

1. Different status for alternative networks

As it was mentioned in the general report published on August 1999, we can distinguish three groups of countries according to the state of liberalisation in their alternative networks:

Algeria, Syria, Tunisia : there is currently no plan regarding liberalisation of alternative networks.

Cyprus, Jordan, Malta, Morocco, Turkey and Egypt: alternative networks are still closed but evolution towards liberalisation and competition (attribution of several mobile licences, development of competition within ISPs) will accelerate their opening.

Israel, the most liberalised country : the liberalisation of alternative networks was completed in June 1999 (date of telecommunications liberalisation),

Moreover, a fourth group is worth mentioning, Palestine and Lebanon. They are (re)building their networks and the conditions under which alternative networks will open will depend on future telecommunications laws. Once there will be more capital and know-how, the opening process may be quick.

2. A potential evolution towards liberalisation

Liberalisation of alternative networks makes a major contribution to the development of an Information Society. It facilitates the emergence of new actors and constitutes a necessary step to stimulate competition. In particular, it enables new entrants :

to reduce networks costs,

to get more independence from the historic operator, that usually raises a number of entry barriers to new operators (high leased lines prices, important delays before delivering network infrastructures to new entrants,

to reduce time to market,

to provide up-graded, high quality networks,

to provide a choice of technologies.

This is of major importance to emerging countries where the quality of networks is often not sufficient to enable the provision of good quality services : mobile, Internet and data. Furthermore, tariffs are also very prohibitive.

In most of the countries we believe there has not been any development in the regulation of alternative networks. At the same time, most of the national players have not drafted a telecommunications strategy so far. Nevertheless, the situation could evolve quickly in countries where licences are attributed to new entrants.

3. Main events in the last quarter July-September 1999

3.1 Attribution of a second GSM licence in Morocco

The new mobile operator, Medi Telecom (Telefonica 39,5 %, Portugal Telecom 39,5 %, the Moroccan Bank of International Commerce 20 %, Akwa 11 %, the Caisse de Dépôt et de Gestion 8 %) will invest nearly 2 billion Dirhams for the installation of its radio network. This new operator should accelerate reform of the status of the main public utilities in order to define a new legal framework enabling them to supply telecommunications network services.

3.2 Importance of cable networks

In Malta, the regulator took the decision in October 1999 to allow ISPs to use the cable network of the cable TV distribution monopoly Melita Cable, in order to provide Internet access. This is an important movement towards liberalisation, because as specified in the current telecommunications law, Maltacom had the monopoly of the provision of telecommunications networks.
In Israel, the 3 cable TV companies asked the regulator for licences to provide broadband Internet services and telephony via their infrastructure. This would have a major impact on the telecommunications market: cable networks cover over 90 % of the country and 70 % of homes subscribed to cable television.