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ISPs received only 49% of the actual spending on internet access services by end users in the North Africa and Levant countries during 2002, says IDC

A recently published IDC Study, North Africa and Levant Internet Access Services Forecast and Analysis, 2002-2007, indicates that licensed Internet service providers in the countries of North Africa and the Levant collected less than $89 million of a total Internet access services market valued at $182 million in 2002. According to the study's findings, over 51% of end-user spending on Internet access services in North Africa and the Levant actually went to the incumbent telecommunications operator, illegal service providers, or the data connectivity providers.

The study, which examines the Internet access services markets in Egypt, Jordan, Lebanon, Morocco, Syria, and Tunisia, puts the total number of Internet access connections in the six countries at over 1 million. Egypt holds the largest number of connections, while Lebanese end users spent the most on Internet access services among the six countries.

"Lebanon enjoys one of the highest average spending per connection (ASPC) figures in North Africa and the Levant, making it comparable, in this respect, to some of the more affluent Gulf states," stated Mohsen Malaki, Senior Analyst in IDC CEMA's Telecommunications Group. "Unfortunately for licensed ISPs, however, less than 43% of the average spending per connection goes to the ISPs in the form of subscription fees. The remaining 57% of end-user spending in Lebanon goes to unlicensed providers of Internet access services over illegal private copper cables, and to the incumbent operator in the form of leased line rental fees and PSTN call charges."

IDC research indicates that a similar trend exists across the region. ISPs in Egypt collected only 68% of total end-user spending in that country in 2002, while the corresponding figure for Morocco was 48%, followed by Lebanon at 43%, and Jordan at 42%. Tunisia came last, with ISPs collecting a mere 33% of the 2002 end-user spending on Internet access services in that country. "ISPs need to look at the actual spending by end user on Internet access services, instead of simply the revenue they generate from their customers. This will allow them to assess what share of the total end-user spending is ISP revenue, and to quantify the amount of end-user spending they are losing to other market players, such the fixed-line operators," says Malaki.

"The region's ISPs have even more to worry about," asserts Malaki. "Not only are they being squeezed from the revenue side, there is tremendous pressure on their profits from the cost side of the equation as well. Depending on the regulations specific to each country, ISPs can also incur such operating costs as dial-in port rental fees, connectivity to the national IP backbone, wholesale fees for leased lines, co-location fees for ADSL equipment, as well as the very costly international bandwidth fees."

The IDC study has also identified several payment models being used for dial-up Internet access services in the region. These include the traditional subscription-based models employed since the early years of the Internet in the region, as well as several innovative new models. These new models include the subscription-free model being used in Egypt, subscription-free premium-rate model used in Egypt, Syria, and Algeria, the Internet prepaid card model used in several countries in the region, and the flat-rate, unmetered access model currently introduced only in Morocco.

Looking ahead, IDC believes these new dial-up models will play a key role in the further growth of Internet access connections in the region. IDC expects the overall Internet access market to exhibit a CAGR of 24% for connections and 19% for end-user spending between 2002 and 2007. The market will reach close to three million connections, which are expected to generate end-user spending of $437 million in 2007. The largest driver of connection growth will be dial-up during the forecast period. Broadband connections should see the highest growth rate, however, up from a very small base in 2002. Internet leased line connections will increase at an 16% CAGR in the same period.

The North Africa and Levant Internet Access Services Forecast and Analysis, 2002-2007 (IDC #ZT07K) study sizes and forecasts the Internet access services connections and revenue in the countries of Egypt, Jordan, Lebanon, Morocco, Syria, and Tunisia. Connections and end-user spending are segmented by consumer and businesses by size, as well as by dial-up, broadband, and leased lines. Dial-up connections considered in the market sizing include subscription-free, premium rate, prepaid card, hourly subscription, and unlimited monthly subscription. Broadband connections are composed of xDSL, cable modem, satellite broadband, metro Ethernet, and broadband fixed wireless access technologies. Internet leased lines are further segmented by bandwidth.

This IDC study is available for purchase from IDC CEMA, Tel. +420-2-2142 3140 or contact Marketa Kderova at mkderova@idc.com.

Related IDC Studies, released to IDC's MEA Telecommunications CIS clients, include:
- Lebanon Internet Access Services Forecast and Analysis, 2002-2007 (Jul 2003)
- Syria Internet Access Services Forecast and Analysis, 2002-2007 (Jul 2003)
- Tunisia Internet Access Services Forecast and Analysis, 2002-2007 (Jul 2003)
- Jordan Internet Access Services Forecast and Analysis, 2002-2007 (Ju12003)
- Morocco Internet Access Services Forecast and Analysis, 2002-2007 (Ju1 2003)
- North Africa and Levant Internet Access Services Forecast and Analysis, 2002-2007 (Ju1 2003)
- Egypt Internet Access Services Forecast and Analysis, 2002-2007 (Jun 2003)
- Turkish Internet Access Services Forecast and Analysis, 2002-2007 (May 2003)
- Gulf Region Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)
- Bahrain Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)
- Kuwait Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)
- Oman Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)
- Qatar Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)
- Saudi Arabia Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)
- United Arab Emirates Internet Access Services Forecast and Analysis, 2002-2007 (Apr 2003)

To view the full list of IDC's MEA Telecommunications CIS Event Flashes, Studies, and Insights, please visit the link: http://www.idc.com/getdoc.jhtml?containerId=IDC_P6030

IDC provides global research with local content.

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community.

IDC is a division of IDG, the world's leading IT media, research, and exposition company.

For the emerging markets, IDC retains a coordinated network of offices and agents in Dubai, Johannesburg, Budapest, Bucharest, Ljubljana, Kiev, Moscow, Sofia, Warsaw, and Zagreb, supported by the Central & Eastern Europe, Middle East & Africa (CEMA) regional research center in Prague.

All product and company names may be trademarks or registered trademarks of their respective holders.

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