Esis extension / Mediterranean Area / Regulatory Developments / Synthesis of Update Memos 2

Last quarter (September - December 1999) was very rich in regulatory developments in the Mediterranean countries. Developments focused mainly on the following:

It is clear that priorities vary from one country to another. They mainly reflect telecommunication development levels, national policies, and involvement in regional and inter-regional cooperation.

The reading of national reports clearly shows that the development of telecommunication and information technologies is considered as a key element in promoting economic and social development.

National reports (available on the web site) show that main developments in several countries were oriented toward liberalisation.

This is the case for Cyprus, Malta and Turkey, who have expressed their willingness to become European Union members and are officially known as candidates. In that framework, the main current developments are focused on the transposition of EU telecommunications directives into national regulations. Making laws and ensuring the implementation of competition principles is a time consuming process. Usually, compliance with the "Acquis Communautaire" is forecasted for the end of 2003. It is worth noting that in Cyprus a new telecommunication law is currently being evaluated by the government. In Malta, compliance with the "Acquis Communautaire" by 2003 should lead to the premature loss of the Maltacom monopoly, which is currently guaranteed until 2010. Turkey, which has been involved in liberalisation for several years, is preparing major reforms (the creation of an independent regulatory authority, and ending of the monopoly status of Turk Telekom by the end of 2004).

Important developments occurred in Egypt during last quarter. Indeed, the government established the new "Ministry of Telecommunications and Information", thus separating the regulation of Posts from Telecommunications. This is part of a large movement oriented towards telecommunications reforms including the privatisation of Telecom Egypt and the preparation of a new regulatory framework. The Ministry created several working groups in charge of the definition of new programs and reforms. A new Telecommunications Act recommending more liberalisation should be drafted soon.

Only a few of the Mediterranean countries have started to privatise incumbent operators. Indeed, Israel and Malta are the only countries to have started privatisation processes. Nevertheless, national reports show that most of the countries plan to privatise their main State enterprises in order to make a complete reform of several economic sectors. Indeed, privatisation is conceived as a key element in accelerating modernisation and to introduce know-how and capital. Numerous privatisation operations should start during 2000.

For example, in Morocco, the opening of Maroc Telecom’s capital (ex-IAM) could be initiated in the first quarter of 2000 (The Moroccan State keeping 51 % of the shares). Lebanon is involved in economic reforms. A draft form of a privatisation law should be submitted to the vote in a short time. It will then constitute the framework within which the privatisation process could begin. Privatisation of the Telecommunication sector should be an important part of the process. In Jordan, the government is leading a large privatisation program that concerns major public sectors companies. The privatisation of the national operator, Jordan Telecom, is a key element of this program. Jordan Telecom’s 40% acquisition by a consortium led by France Telecom was agreed to in principle. In Egypt, the privatisation of Telecom Egypt should start in the first quarter of 2000 (but, a rather limited share of capital would be opened, 10 to 20 %). It is worth noting that in Israel the government is to sell its remaining share of 54 % in Bezeq during 2000.

As outlined in previous reports, liberalisation is particularly advanced in the mobile and Internet sectors. Usually, the liberalisation process includes measures to attract foreign investment.

Indeed, in most of the countries, the mobile sector has been liberalised for several years. The need to compensate for the absence of fixed infrastructures or for the bad quality of fixed line services explains this evolution.

One can note that in November 1999, the ANRT in Morocco delivered a licence to Orbcomm (satellite consortium).

It is worth noting that in Egypt, several sectors were opened to competition in anticipation of future privatisations (pre-paid international calling cards, pay phones, ...).

Important infrastructure modernisation programs are in progress. Upgraded networks are necessary to enable the development of quality voice and multimedia services. One can note that in Syria the roll out of a national Internet backbone has started and should be completed by November 2000.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.