A third of a century after Qatar launched its first public phone service in 1953 with a modest 150 lines, Law No. 13 created a state-owned company to run the sector. When Qatar Telecom (Qtel), now known as Ooredoo, moved into mobile services in 1994, its Global System for Mobile Communications (GSM) was among the first in the Middle East. Only after the ascent of the Father Emir, Sheikh Hamad bin Khalifa Al Thani, in 1995 did Qatar’s authorities begin to let more market forces steer the economy. As part of this wave, Qtel listed stock, first on the Qatar Exchange in 1998, then in London (1999), Abu Dhabi (2001) and Bahrain (2002). This diluted ownership, but the state has kept a majority stake: as of early 2014, it held 52% of voting shares, compared to other state entities (17%), the Abu Dhabi Investment Authority (10%) and other investors (21%). Qtel also expanded abroad, operating in 13 countries across the Middle East, Africa and Asia. Foreign operations now generate more than 80% of its revenue.

The government began more liberalisations in 2006. Law No. 34 of that year launched new rules to make Qatar’s telecoms sector more competitive internationally, breaking up Qtel’s monopoly and introducing a private competitor. In June 2008, the country’s second mobile operating licence was granted to Vodafone Qatar, after a joint application from Qatar Foundation (QF) and Vodafone Group. In March 2009 the new operator switched on its mobile network, thus beginning an era of competition. As of early 2014, a 55% share of Vodafone Qatar floated on the Qatar Exchange, the other 45% split between QF and Vodafone.

Recent Results

The Qatar arms of both Vodafone and Ooredoo have recently seen positive financial results across the board. Ooredoo’s revenue from Qatar alone grew 9% between 2011 and 2012, from QR5.8bn ($1.6bn) to QR6.2bn ($1.7bn), according to the company’s 2012 annual report. Operations in Qatar serve 3% of customers but make up 18% of revenue. Customer numbers grew about 6.5%, from 2.37m to 2.53m, more than reversing a 1% contraction between 2009 and 2011. Average revenue per user (ARPU) also saw a slight increase year-on-year (y-o-y), from QR145.2 ($39.77) to QR148.7 ($40.73) in the three months ending December 31.

Vodafone Qatar likewise posted strong figures for its 2014 fiscal year (FY), which runs from April 1 to March 31. For the nine-month period ending December 31, 2013, mobile customers grew 17.4% from 1.1m to 1.3m.

The increase in customers saw revenue grow by 31% from QR1.1bn ($301.3m) to QR1.43bn ($391.6m), according to the company’s third-quarter figures.

Perhaps the most positive sign for Vodafone came in late 2013, when the firm reported its distributable profit of QR89m ($24.4m) for the nine months ending December 31, 2013. New telecoms entrants typically post losses in early years as they invest in infrastructure, build a customer base and compete with incumbents – up till then, so did Vodafone Qatar. The trend of achieving positive distributable profits has continued since the fourth quarter of the 2013 FY at QR27m ($7.4m), QR16m ($4.4m) in the first quarter of the 2014 FY, followed by QR26m ($7.1m) in the second quarter of that year and QR47m ($12.9m) in the third quarter.

Rules & Regulations

As the telecoms sector grows and technology develops, the government is working to keep regulations up to date. The state’s first telecoms regulator, the Supreme Council of Information and Communications Technology (ictQATAR), was created in 2004 with a mandate to nurture innovative technologies and regulate the sector to ensure a fair and competitive market. In June 2013, Sheikh Hamad announced he would pass the throne to his son, Sheikh Tamim bin Hamad Al Thani. The new Emir immediately reshuffled his Cabinet and created a new ministry to take on ictQATAR’s roles, the Ministry of Information and Communications Technology, installing ictQATAR’s secretary-general, Hessa Sultan Al Jaber, at its helm. ictQATAR has tried to level the playing field between the state’s telecoms firms. In January 2013, it announced the phased roll-out of mobile number portability (MNP), a system that allows customers to switch operators without changing their phone number. By reducing the inconvenience of a switch, this increases competition. Originally planned for 2009 when Vodafone Qatar first entered the market, the newfound ease may soon draw customers to new providers – though just how much is unclear. Qatar’s high mobile penetration, around 160%, means that about two-thirds of population may already have two lines. Businesses, which often subscribe to multiple lines and services over longer periods of time, may enjoy the increased flexibility. For these and other high-end users, even marginal benefits may nudge them towards a switch.

The authorities are now looking to expand the benefits of competition. Radio spectrum management, for example, is a growing interest. In the past, frequency allocation was fairly straightforward, because only a few devices like television, radio and remote controls could actually utilise radio frequencies. The development of mobile voice and data services has made allocation of radio frequencies a bit more complicated, however.

Mobile Finance

One such perk is mobile financial services, which Ooredoo has launched in the last three years to woo customers. This service allows customers to transfer money abroad, eliminating the need for in-person transactions, which can be costly and time-consuming. In 2012, Ooredoo partnered with MoneyGram, a retail transfer provider, in a new service that allows Qatar-based customers to transfer money to any country in the world that has a MoneyGram office.

The operator aims to enlist Qatar’s expatriates, who make up more than 85% of the total population. “With a growing number of foreign workers working on critical projects in Qatar, there is an increasing need for people to be able to transfer money safely and conveniently back home at any time and from anywhere,” said Waleed Al Sayed, Ooredoo’s chief operating officer, following the announcement of the MoneyGram deal.

Transfers are only part of the market’s potential. In Africa, mobile money services like Kenya’s M-Pesa have taken on the role of bank cards, allowing people to make small transactions with their phones. Operators in Qatar are confident they too can succeed in mobile money. Enrolment is so far positive. In May 2013, Ooredoo announced 100,000 customers had signed up for the service since its launch in October 2011.

Looking Abroad

This step actually makes sense for both companies because each has global operations. Vodafone Qatar is part of UK-based Vodafone Group, which works throughout Europe, Africa and Asia. Ooredoo‘s 91m customers are concentrated in over 10 countries outside of Qatar, and its leaders are keen to expand its international holdings. “MENA and South-east Asia: that’s where the focus area is,” CEO Nasser Marafih told reporters in May 2013 at the World Economic Forum in Jordan. The company, he said, plans to concentrate capital expenditures on expanding data and broadband in markets like Iraq and Indonesia.

Ooredoo has been keeping an eye out in several markets. In May 2013, it raised $12bn to bid for a controlling stake in Rabat-based Maroc Telecom, according to Bloomberg. Morocco’s largest operator of fixed and mobile lines had been privatised in February 2001 when Paris-based media multinational media Vivendi bought a 35% stake. After increasing its share to 53%, the French firm changed course and sought to sell off its stake to pay down debts and shore up its share price. Ooredoo’s offer competed with one from UAE-based Etisalat, another GCC telecoms firm looking to expand its holdings abroad. In June 2013, Ooredoo retracted its bid.

In Myanmar, things went differently. Ooredoo won its bid for one of two new telecoms licences being offered by the government, having been selected from an 11-candidate shortlist that had itself been narrowed down from a pool of more than 90 initial applicants. Before the country began to open and liberalise in 2011, mobile services there were prohibitively expensive – activating a GSM chip could cost as much as $5000. As a result, the country’s more than 60m people have one of the lowest mobile penetration rates in the world. At 5-10%, mobile usage there looks tiny next to the 70-100% rates of neighbours like Laos, Thailand and Cambodia. The Burmese government says it wants to see the rate reach 80% by 2016.

To justify its choice of bid, the government in Myanmar cited Ooredoo’s strong record elsewhere in the region. “We selected them for a licence on the basis of their services: they have a good telecom service in Singapore,” a spokesman told The New York Timesby phone in June 2013. Ooredoo’s leadership is optimistic about prospects in Myanmar despite some domestic opposition to the licensing results. Following the decision, Sheikh Abdullah bin Mohammed bin Saud Al Thani, chairman of Ooredoo, said the country would “undoubtedly become a key market” for the company.


While the presence of Qatari operators grows abroad, the increasing popularity of smartphones in Qatar is opening doors at home. Relatively high disposable incomes and an expanding web culture have contributed to Qatar’s high smartphone penetration. About 66% of Qataris and 52% of long-term expatriates reported owning a smartphone in ictQATAR’s “Qatar ICT Landscape 2013”, a survey that gathered data from the whole of Qatar through 1880 face-to-face interviews. That rate is close to that of Qatar’s GCC neighbours Saudi Arabia (60%) and the UAE (61%), and exceeds those of developed European economies like the Netherlands (43%) and France (38%).

Rapid growth in smartphone usage has changed the contours of the telecoms sector’s revenue. For the nine months ending December 31, 2013, Vodafone Qatar saw revenue grow by 28% year-on-year to reach QR1.43bn ($391.67m) driven by base expansion – both prepaid and postpaid – and improved ARPU performance. Voice and text messaging used to make up the vast majority of revenues, back when mobile data use was much more limited as phones could not replicate the speed and user-friendliness of computers.

Developments like better battery life, sophisticated mobile processors and intuitive mobile interfaces, however, have opened the web to consumers on the go. While mobile web consumption in some markets was dampened by the costs of new phones themselves, Qatar’s high per-capita income has buoyed both sales and data use in the country.

Enterprise Services

Another growing segment, enterprise services, has been on both providers’ radar. In May 2013 Vodafone opened its Al Safwa Centre, dedicated to business services for corporate and highspending clients. The centre is both a showroom for new technologies and a space for workshops to teach clients about what that technology can do. Ooredoo likewise offers services like fibre lines, cloud services and group packages for business customers.

Providers see special growth potential in machineto-machine (M2M) remote monitoring. These systems use telecom networks to help firms keep an eye on their operations data. Vodafone has used this technology in its dealings with India’s Pepsi bottler, allowing the firm to monitor activities at its cold storage warehouses. Al Million taxi in Doha uses it to manage its vehicle network. “[By 2022], there will be more than 20bn machines connected to the Internet around the world,” Vodafone’s business services director, Niraj Singh, told media at the opening of the Al Safwa Centre. “These might be small things like domestic gas meters or big things like cars and freight containers. By connecting these machines, businesses can track their assets better, deliver innovative services and even provide health care services in a fundamentally different, more direct way.” With little M2M penetration in Qatar, there could be increasing opportunities for the technology to spread.


While Vodafone and Ooredoo are boosting telecoms services domestically, state authorities are working to build Qatar’s presence internationally. To this end, the government created the Qatar Satellite Company (Es’hailSat) in 2010 to purchase, launch and operate commercial satellites. The idea is to create a fleet network that is owned and operated out of Qatar, thus providing the country with an international communications infrastructure that can be used by both commercial clients and the state’s armed forces.

Es’hailSat has moved quickly. To establish itself in the communications satellite arena, in March 2012 it signed an agreement with Arianespace, a French space transportation company, to launch its first satellite, Es’hail 1. That May, it signed another deal with US-based Space Systems/Loral to build it. To serve focus markets in the Middle East, North Africa and Central Asia, Es’hailSat settled on the position of 25.5° East for the device. It is already drawing plans for an Es’hail 2, and over the next decade plans to build a fleet of at least six satellites. As for gathering clients, the company signed a deal with Doha-based Al Jazeera in July 2012. This laid the groundwork for the media firm to use Es’hailSat’s satellite network to support its coverage of the region.


Qatar’s telecoms sector has put itself on a sound footing, thanks to ongoing investments in domestic and global operations. With a solid fixed network, a growing satellite market and sprawling 3G coverage, residents enjoy high connectivity. The ever-rising demand for mobile data has already fuelled a drive for 4G coverage, and could prove lucrative to providers even as the use of voice and SMS decreases.

Keeping regulations competitive is likely to be on the minds of both operators and authorities. With the new Ministry of Information & Communications Technology taking over the duties of ictQATAR, a smooth transition will be crucial. The government has signalled its commitment to continuity in this regard by selecting former ictQATAR Secretary-General Al Jaber as minister of the new agency. As mobile demand continues to grow, spectrum allocation will become all the more important. Though the new state body may not be doing any just yet, it is likely to be working closely with operators and other stakeholders to keep regulations abreast of the needs of a fast-developing sector.