Councils and Alliances


Economic News

22 Jul 2010
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News that Qatar is to have a new body to oversee the development of its IT sector was broadly welcomed by industry insiders this week, adding to other good news for the country's internet and telecoms sectors. With IT expanding at a rapid rate of knots, Qataris are now positioning themselves well to take advantage of regional developments, too.

On August 3, Emir Sheikh Hamad bin Khalifa Al Thani issued a decree establishing the Supreme Council for Communications and Information Technology (SCCIT). This autonomous organisation will be funded via a supplement to the state budget and will be managed by a board of directors headed by the heir apparent, Sheikh Tamim bin Hamad Al Thani.

Under the decree, the stated objectives of the SCCIT are to organise the communications and IT sector in Qatar and "create a society that has an advanced awareness of IT", by developing the necessary infrastructure and formulating a national strategy for the communications and IT sectors. The council will also develop strategies for linking these sectors to national public policies, while also implementing and supervising those policies.

Board members are to be chosen from among candidates with solid IT experience, but they will also need the skills to draft laws and by-laws related to the sector. The SCCIT will have responsibility for setting provisions and standards for the issue of licences and will also fix tariffs on services.

Qatar has not previously had that much of a role in the Gulf's IT world. On the one hand, a strong energy sector and full employment have crowded out any pressing need to develop alternative technology and knowledge based growth, while on the other, Gulf states such as Dubai have already taken controlling positions in areas such as the Arabisation of software and high-tech, value-added services.

Internet penetration rates have been growing, but are still relatively low. At the end of 2002, the International Telecommunications Union put the penetration rate at 10.8%, or some 70,000 users. This placed Qatar third amongst Arab countries, behind Kuwait (12.2%) and the UAE (35.2%).

Yet Qatar may be catching up fast. Financial results for the first six months of this year announced July 24 by telecoms monopoly Qtel showed that its dial-up internet service had expanded its subscriber base by 40% over the previous 12 months. Meanwhile, the company's ADSL service had nearly quadrupled its subscriber base, growing by 379%.

Good news for Qatari IT - and for Qtel, whose chairman, Sheikh Abdullah bin Mohammed bin Saud Al Thani, said on announcing the results that "In the first six months of the year, Qtel achieved another strong performance, with revenues rising by 18% to QR1.149bn and net profit increasing by 29% to QR749m over the corresponding period last year."

This was the result of good growth in both wireless and wireline services, Sheikh Abdullah said. Qtel's GSM subscriber base saw 28% growth from 328,000 in June 2003 to 419,000 this June. The prepaid GSM subscriber base was outstanding in this - showing a 51% increase over the 12-month period.

Fixed-line services also performed well with 14% growth in overall revenue from QR387m in June 2003 to QR441m in June 2004. In this, Sheikh Abdullah commented, internet and leased circuits had been the main engines for growth.

Such results provide good background for Qtel in the regional GSM market too. This saw an important development in July with the formation of an alliance between four of the Middle East's most technically advanced mobile GSM network operators.

Qtel was naturally one of them, with the other three being Jordan's MobileCom, Bahrain's Batelco and Kuwait's Wataniya. Together, these four reach over 3m mobile customers in the region, via networks in Bahrain, Kuwait, Qatar, Jordan, Iraq, Algeria and Tunisia.

"Through partnership in development, we will be able to accelerate the delivery of a number of new products and services to our customers," Ross Cormack, executive director for wireless services at Qtel, told reporters on announcing the alliance on July 20. "The alliance's combined economic and marketing power will allow us to access and offer a significantly wider range of wireless content and applications."

These are likely to include the fruits of collaboration on roaming for devices using the MMS, GPRS and EDGE access services. Alliance members will also support a pre-paid roaming and common short code, as well as supporting total interoperability between customers in alliance member markets

All of which will doubtless be welcome news to the new IT and communications supreme council in Doha, as it convenes its first meeting in the days to come.

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