Identifier
Created
Classification
Origin
09AMMAN833
2009-04-07 12:16:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Amman
Cable title:  

GROWING INTERNET COMPETITION AND LAUNCH OF A 3G TENDER IN

Tags:  ECPS EINT EINV TINT JO 
pdf how-to read a cable
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RR RUEHWEB

DE RUEHAM #0833/01 0971216
ZNR UUUUU ZZH
R 071216Z APR 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 4818
INFO RUEHGB/AMEMBASSY BAGHDAD 6220
RUEHLB/AMEMBASSY BEIRUT 3035
RUEHEG/AMEMBASSY CAIRO 3998
RUEHDM/AMEMBASSY DAMASCUS 4137
RUEHRH/AMEMBASSY RIYADH 2132
RUEHTV/AMEMBASSY TEL AVIV 1656
RUEHJI/AMCONSUL JEDDAH 0875
RUEHJM/AMCONSUL JERUSALEM 5461
RUCPDOC/DEPT OF COMMERCE WASHDC
RHDIFCC/FCC WASHDC
UNCLAS AMMAN 000833 

SENSITIVE
SIPDIS

STATE FOR NEA/ELA AND EEB/CIP/BA (FINTON)
STATE PASS TO COMMERCE FOR ITA/OTEC (BENNETT)
STATE PASS TO FCC (TANNER)

E.O. 12958: N/A
TAGS: ECPS EINT EINV TINT JO
SUBJECT: GROWING INTERNET COMPETITION AND LAUNCH OF A 3G TENDER IN
JORDAN

REFS:A) State 27310
B) 08 AMMAN 3368
C) 08 AMMAN 2782
D) 08 AMMAN 2490

UNCLAS AMMAN 000833

SENSITIVE
SIPDIS

STATE FOR NEA/ELA AND EEB/CIP/BA (FINTON)
STATE PASS TO COMMERCE FOR ITA/OTEC (BENNETT)
STATE PASS TO FCC (TANNER)

E.O. 12958: N/A
TAGS: ECPS EINT EINV TINT JO
SUBJECT: GROWING INTERNET COMPETITION AND LAUNCH OF A 3G TENDER IN
JORDAN

REFS:A) State 27310
B) 08 AMMAN 3368
C) 08 AMMAN 2782
D) 08 AMMAN 2490


1. (SBU) Summary: In response to ref A, this cable provides an
update on Jordan's initiatives and strong government commitment to
improve telecommunications and Internet connectivity. Such efforts
led to an increase in Jordan's rank to 44 out of 134 countries in
the World Economic Forum's (WEF) 2008-2009 Global Information
Technology Report. Over 22% of Jordanian households accessed the
Internet in 2008, and the Ministry of Information and Communications
Technology (MOICT) expects Internet use to increase as prices fall
with growing competition in international gateway access.
Approximately 94% of Jordanian households have at least one cell
phone, which is considered high for a country with a per capita
income of about $3,000. The Jordanian government issued a tender
for a Third Generation (3G) mobile communications license on March

30. Job loss in the information technology sector remains low, and
a government program seeks to support employment of new graduates.
End Summary.

ICT READINESS
--------------


2. (U) Jordan ranked 44 out of 134 countries in the WEF's 2008-2009
Global Information Technology Report, compared to 47 out of 127
countries in 2007-2008. Jordan received its best rankings on
government e-participation (#15); government prioritization of
information and communications technology (ICT) (#17); and
importance of ICT to government vision of the future (#18). It
ranked lowest on monthly business telephone subscription (#107);
computer imports (#110); and freedom of the press (#110). Overall,
Jordan was tied with the Slovak Republic and had a higher ranking
than Italy, China, and India. The report highlighted Jordan's
successes in leveraging ICT to improve its economy, which was rare
among low-income countries.

22% of Jordanians Accessed the Internet in 2008
-------------- --


3. (SBU) Jordan's Department of Statistics (DOS) reported that 40%
of Jordanian households had a computer in 2008 and 22% were
connected to the Internet compared to 16% in 2007. MOICT Secretary

General Bashar Bashaireh clarified these numbers and acknowledged
that while fewer than 5% of households have a long-term Internet
subscription, many households can access the Internet via pre-paid
dial-up cards. He added that MOICT has worked to improve rural
access by establishing computer workstations within community
centers and through a Ministry initiative to link all public schools
and universities to a national broadband backbone.


4. (SBU) Bashaireh predicted Internet use to increase as
subscription costs fell. He said Jordan Telecom (JT) recently
reduced its prices 15 - 20%, most likely in anticipation of its
upcoming loss of monopoly control over the international gateway
through Aqaba (ref C). Currently all Internet Service Providers,
including the three new WiMax providers, rely on JT for such access
which has kept connection prices high. In 2009, at least two
additional international access points will be added - one through
the West Bank and one through Saudi Arabia, with a potential fourth
access point through Syria. Bashaireh predicted that consumer
prices will fall by at least 50% once another international gateway
is operational. He said adding such international redundancy has
been one of the Ministry's top priorities, especially since the
disruptions in service in Egypt in December.

94% of Jordanian Households Have a Cell Phone
--------------


5. (SBU) DOS reports that 94% of Jordanian households owned a cell
phone in 2008, compared to 86% in 2007, and 75% of households have
more than one mobile phone. In 2008, the average monthly household
expenditure on mobile phones was $35; a median Jordanian salary is
approximately $500 per month. The CEO of Orange Mobile, Majd
Shweikeh, was quoted in the press that the potential for new mobile
subscribers is very limited in Jordan and that future business

efforts will be focused on customer retention and new services
rather than recruiting new customers. The WEF report estimated that
the mobile phone sector in Jordan accounts for 5.3% of GDP which is
more than double the average for other emerging market countries,
and that penetration is particularly high given Jordan's low per
capita income of approximately $3,000.

3G Service Expected by the End of the Year
--------------


6. (SBU) The Telecommunications Regulatory Commission (TRC) floated
on March 30, a long-delayed tender for 3G mobile telecommunications
service in Jordan. TRC Chairman Ahmad Hiasat publicly announced
that all telecommunications companies, both incumbents and
outsiders, were welcome to participate and predicted that mobile
wireless broadband data services would be operational by the end of
the year. Incumbent operators had been lobbying TRC since June 2008
to limit participation to the four incumbent mobile providers, and
in December 2008 they succeeded in delaying the spectrum auction by
several months (ref D). The auction's reserve price has been set at
$35 million and the auction winner will also be eligible to purchase
a separate 2G spectrum license. In addition to the license cost,
all providers must also pay 10% of revenues to the government.
Bashaireh expects at least one bidder for the 3G license and said
that such 3G services are vital to Jordan's ability to market itself
as a foreign direct investment destination.


7. (SBU) The 2G license is particularly needed by Xpress, Jordan's
smallest provider. Xpress currently has a license to offer
Motorola's iDEN "push to talk" technology but has struggled to
attract customers. Xpress believes that a 2G license with GSM
technology would allow it to better compete. The process for Xpress
acquiring a 2G license has been controversial with Xpress arguing
that other providers have not had to pay large sums for a license
and the government now believing that a valuable asset like spectrum
should be sold at a fair price. Xpress has been operating with a
$54 million Export/Import Bank loan that it will likely be unable to
pay back if it cannot receive a 2G license.

Government Starts Program to Help with IT Employment
-------------- --------------


8. (SBU) Bashaireh said the ICT sector remains relatively strong in
spite of the worldwide economic slowdown. He said that major
e-government projects remain on-schedule (ref B). He added that the
GOJ has been looking for additional IT projects as a way of
supporting local IT companies and helping them to minimize layoffs.
He has heard rumors of layoffs in the industry but has not seen any
data. Bashaireh explained that the Ministry is particularly
concerned about recent IT graduates and has developed a program
whereby the government pays 50% of the salary of an IT worker at a
private Jordanian company for the first 12 months of employment. He
said that small numbers of Jordanian IT workers have already
returned from the Gulf, where the economy has been harder hit, but
he predicted their arrival would remain slow until June and July
when the school year ends.

Visit Amman's Classified Website at
http://www.state.sgov.gov/p/nea/amman

BEECROFT