World’s largest Mobile phone operators and the Muslim world

by Tawhid
February 24th, 2010

Telecommunications in the Muslim world

How do OIC Members stack up against the nonmuslim world?

Figure 1 An Emirati man talks on his mobile phone.  United Arab Emirates has the highest mobile penetration in the world. Photo courtesy: andy carvin

Assalamu Alaikum brothers and sisters in Islam, apologies for the lengthy absence at Al Nahza.

This time we look at the telecommunications sector in the Muslim world and its standing relative to some nonmuslim economic blocs.

We approach the issue from two perspectives.

Firstly, the mobile phone usage statistics – teledensity/mobile subscribers per 100 persons, total subscribers and total population – is tabulated. For comparison, the leading OIC member states in mobile phone penetration rate and total subscriber numbers are jotted down.

Then, we look at some of the largest mobile phone companies originating in the wider Muslim world – in OIC Member states – and compare their performances with those from the nonmuslim world.

Mixed results

The OIC Member states as a whole perform at par with the nonmuslim world. Mobile penetration rate – mobile phone subscribers as a percentage of total population – stands roughly at 58.58%.1

Wide variations are seen between countries and regions of the OIC in terms of mobile phone penetration. From as high as 200% for the United Arab Emirates (whose per capita GDP, teledensity rates, quality of living and many other statistics would have been higher if not for the foreign population from poorer countries that form a majority of its population) to as low as 14.90% for Comoros,2 the variation in teledensity rates is immense and illustrates the wide disparity in social, technological and economic situations of member states.

For Comoros, only data from 2008 was easily accessible. Therefore, understandably the figures presented are most likely to be lower than 2009 statistics.

Largest Mobile Phone Market in the World!

At over 900 million subscribers, the OIC members present a lucrative and largely untapped font of opportunity for telecom companies. Despite the numerous political and social divisions within the OIC member states, this market is larger than China (the world’s single largest national market for mobile telephony), the European Union, Russia, or other less significant markets.

Arabic speaking countries lead in teledensity

According to latest available information from the public domain, Arabic speaking countries take a good 9 of the top 15 spots in teledensity in the Muslim world.

At least 11 countries have mobile penetration rates of over 100% – more than one mobile phone per capita – which compares favourably with many highly touted “emerging countries” in the western and allied media/press/publications.

By some estimates, Algeria and Albania also possess teledensity rates in excess of 90%. In sub-saharan Africa, Gabon is clearly the leader, while Uzbekistan and Kazakhstan are predicted to break through the psychological barrier of 100% penetration soon.

In contrast, the lowest teledensity rates are seen in sub-saharan African member states, Bangladesh and Yemen.

Only Bangladesh and Yemen outside sub-saharan Africa is seen to have a teledensity rate lower than 35%.

Muslim3 telecom companies: Trailing the world leaders or trailblazing trendsetters?

From Saudi Telecom Company to Kuwait’s Zain, from UAE’s Etisalat to Qatar’s Qtel, mobile telecom companies from OIC member states have performed admirably well in the face of widespread economic malaise across most of the world.

When compared with the global leaders, Muslim telecom companies still have opportunity for growth. It is observed that the world leaders most frequently originate in the European Union. Charts comparing the performance of some Muslim and nonmuslim telecom companies are shown for convenience.

In comparison, some of the largest Muslim companies for which data was easily available fare quite well in profitability. Global reach of Arab companies leaves the rest of the Muslim world in the dust.

However, as we can see from the chart below, no individual Muslim telecom company is large enough to challenge the global leaders (originating mostly in the EU).

Figures for assets as at Dec 31, 2008 could not be obtained for three firms – Libyana (Libya), Globacom (Nigeria) and Sonatel (Senegal). Estimated/actual profits could not be obtained for Globacom and Libyana while revenue figures could not be obtained for Globacom.

The tables would be promptly updated with accurate figures once they are available.

Regarding the methodology, instead of using exchange rate values, we made corrections for Purchasing Power Parity bearing in mind the cost-of-living differences across countries.

Values were adjusted to reflect the relative purchasing power – a basket of goods and services one could purchase in a standard country, which is taken to be Kuwait for our analysis – of all the three indicators we listed, namely annual revenues, (net) profits and total assets.

Whenever possible, end of 2008 results were used failing which the results from the closest dates or the most easily available publications were referred to.

Sorted by the number of subscribers, the table looks somewhat different, as shown below.

It is also to be noted that some of the companies in the above list are majority owned by foreign nonmuslim4 companies, while certain other notable telecom firms as Taif Telecom (Tatarstan) and Astelit/Life (Ukraine) majority owned by Muslims are not included in our calculations solely for convenience of calculations.

In future editions Inshallah, revisions may be made to include such Muslim owned companies while excluding the nonmuslim companies from our lists.

Finally, we conclude that neither are Muslim3 firms global laggards nor global leaders.

Greater international ambitions and enhanced cooperation needed

Muslim telecom companies need to expand their presence in the world

If Muslim telecom companies are to become truly global leaders, they must think more ambitiously of acquiring foreign firms with great lucrative potential, enhance the scope for cooperation amongst fellow members, actively improve and develop products and services keeping the market dynamics in mind while carrying out groundbreaking R&D.

Also to be noted is the mobile handset market, which in the OIC alone, has a potential market of over a billion and a half customers! Already Indonesian, Iranian, Bangladeshi, Malaysian, Emirati, and many other companies have ventured into the sector. Though we must be cautious in our expressions for none of the OIC origin mobile phone manufacturer is among the global leaders, we have grounds for optimism considering the huge market within the OIC that is yet to be tapped. Taking the pole position in mobile phone sales within national and regional borders must be the first priority for handset manufacturers – Vitell Mobile, AsiaFone from Indonesia, CSL Group from Malaysia, Nawaiya from United Arab Emirates.

Indonesia’s ViTELL makes eye-catching mobile phones embedded with the latest applications. A ViTELL V720 can be seen here. Image courtesy: Vitellmobile.com

Download this report in PDF

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1 Data is for December, 2009 or latest available data, whichever is earlier. In many cases, accurate data was unavailable. Estimates were made for various items such as teledensity rates or total mobile subscribers based on information in the public domain.

2 Data used is for 2008. Latest data could not be gathered for Comoros, Djibouti, Guyana and Suriname. For these 4 countries, data for 2008 were used. Understandably, lower figures were registered in these countries’ accounts in our rankings. We would warmly welcome any up-to-date data on total mobile subscribers, mobile teledensity or population on these countries. We eagerly await members to update us with the latest data, alongside verifiable accounts for the information, if any mistakes are spotted.

3 Only OIC Member state-origin/owned companies are included under the term “Muslim telecom companies” in this case. As a result, groups such as Taif Telecom from the Russian Federation are not included while others like Maxis Telecom are included in our calculations.

This is purely a matter of convenience and other methods of calculation excluding nonmuslim owned companies from OIC member states but including Muslim owned companies from outside the OIC could also be used instead.

4 Originating in non-OIC member states.

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