Payphones suffer from cellphone growth

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March 22 2004

Research conducted by the
Arab Advisors Group's indicates the GSM payphones market is stagnating in some Arab markets but is still growing in others as mobile penetration increases..

The GSM boom was disastrous for the payphone market in Jordan, for example, but was a major boon for the payphone market in Morocco. Arab Advisors Group's research shows that Morocco has the highest number of installed payphones in the examined countries while the UAE has the highest payphone penetration.

The advent of mobile phones has significantly reduced the popularity of payphones. Moreover, fixed line prepaid cards substitute the need for installing payphones. In Jordan, for example, the two payphone service companies, namely ALO and JPP, have shut down, while in Bahrain the payphones service is struggling. Egypt and Morocco, however, remain viable markets for payphone services.

As for Saudi, the influx of millions of pilgrims every year makes for an ideal context for payphone services in the Kingdom. In addition, the service seems to still have its client base in Algeria, Tunisia and Syria. In Syria a project for installing 8,000 new payphones is scheduled for 2005, but no offers have been submitted for the tender yet. As for Algeria, card-based payphones have been a recent addition to the market.

"Morocco is the Arab World's leading payphone market, size and usage wise. The country is followed by Saudi Arabia, Egypt, Tunisia, UAE, Syria, Algeria, Bahrain and Qatar." Serene Zawaydeh, Arab Advisors Group's senior research analyst, said

"On the other extreme, lies Jordan, which has seen its two private payphone operators close down and currently has no payphone service to speak of." Ms. Zawaydeh added.

"Morocco's installed payphones base constitute 7.5% of mainlines. This high percentage of total mainlines is indicative of why the mainline service in Morocco has declined over the past years.

Many Moroccans choose to receive calls on prepaid mobiles, and make calls using the neighborhood's payphone booths." Ms. Zawaydeh explained.

"The UAE has the highest payphones penetration rate (0.76%) amongst the listed countries, and its payphones constituted 2.7% of total mainlines" she concluded.


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