Ruling the Arab Internet: An Analysis of Internet Ownership Trends of Six Arab Countries
Issue 14, Summer 2011
An Internet cafe in the Egyptian countryside
This body of research focused on answering the questions, “who owns Arab Internet media?” and “what are the implications of this ownership?” Grounding our theoretical framework within the Agenda–Setting Theory of McComb & Shaw (1972), we conducted a critical empirical analysis scrutinizing major Internet service provider websites from six Arab countries: Egypt, the United Arab Emirates (U.A.E.), Syria, Lebanon, Saudi Arabia, and Jordan, and looked specifically for trends such as monopolies, oligarchies, and investment in telecommunications companies by foreign and regional entities. Our results indicated that the U.A.E. and Saudi Arabia are highly invested in Arab telecommunications. Furthermore, there is a strong economic and political link between Egypt, the U.A.E., Lebanon, Jordan, and Saudi Arabia, and an interconnection exists between companies from these countries. Other Arab countries such as Kuwait and Bahrain are also investing in regional ISPs. There is limited investment from outside the region, but Orange Telecom (the commercial brand of France Telecom) dominates this foreign investment. The results also indicate that although there are no monopolies (with the partial exceptions of Bahrain and Syria), there are emerging oligopolies of Arab Internet media, specifically growing individually out of each of the countries we examined. Implications for these results indicate that inter–country oligopolies may potentially develop as more regional investors take control of Internet companies, and as more connections are made (such as with the Hariri family or other political and economic leaders, Saudi Oger, the Saudi Telecom Company, and the connection between Lebanon, Jordan, and Saudi Arabia), more influence on control and regulation—as well as what is regulated and controlled—will be exerted.
Over the past decade, the Internet has emerged as a dominating medium for communication, commerce, and entertainment, one that has not ignored the Arab World. The Internet first came to the Arab World in 1991 when it was introduced to Tunisia (Rinnawi, 2011; Wheeler, 2004). It then diffused throughout the MENA region as follows:
1993 Egypt, Algeria, UAE, Kuwait
1995 Bahrain, Lebanon, Morocco
1997 Oman, Qatar, Saudi Arabia, Syria
As Aladwani (2003) describes it, “the Arabian market…is equal in size to that of the U.S.A., and in purchasing power to that of China and many other middle–income countries” (p. 9). As the number of Internet consumers continues to grow each year, the potential that exists in the Arab World is astonishing. The number of Internet users in the Arab World rose from 15.8 million in
2004 (United Nations Development Programme, 2004) to 37.5 million in 2009.5 However, others contend that it is between 40 and 45 million users (Arab Advisors Group, 2009), while one report even purported that it is as high as 60 million (Arab Knowledge Report, 2009). With this continuously growing market, which includes many young Arabs, it is of no surprise that the number of individuals, corporations, and governments wanting to profit from and regulate Internet use is staggering.6 Analyzing ownership trends of the Internet service providers (ISPs) in Arab countries is paramount to understanding: who and what is investing in Internet technology and infrastructure, how much Internet freedom can exist within a particular network, what socio–cultural and political forces might be effecting that freedom, and what kind of regional or international connections are being made as more countries and companies extend their economic hegemony over the Internet.
STATEMENT OF THE RESEARCH QUESTION AND HYPOTHESIS
The research questions that we explore are: who (or what) owns Arab Internet media—in particular identifying monopolies, oligarchies, and inter–Arab World and international connections—and what implications exist because of this ownership and these connections if they do indeed exist?
Our initial hypothesis was that Saudi Arabia was increasingly investing in the telecommunications industries of the region as it dominates the ownership of other Arab media such as television and printing (Hafez, 2009). However, shortly after we began working we incorporated the ideas that not only was Saudi Arabia trying to gain influence over regional Internet networks, but many other Arab entities are vying to do so as well. Regardless of the “who” in this sense, the “what” is clear: the more control an individual or entity has, the more power and revenue is available.
Although the secondary literature on this topic was very limited, our analysis of primary data proved to be sufficient in providing enough information for this exploratory empirical research. Before this is discussed in detail, however, it is crucial to define what an Internet service provider is, and highlight their powers and abilities.
The population (unit of analysis) that we focus on in this study is the individual Internet service providers (ISPs) from each country. ISPs are for–profit companies that provide Internet access to customers in exchange for a monthly fee (Kayne, 2010). Since these ISPs are businesses, if they are incorporated in the stock market, individuals, other companies, or governments can buy shares and invest in them. Understanding who is investing in ISPs is important because ISPs have a number of powers that directly affect their subscribers. For instance, ISPs can monitor internet activity, and they have the ability to block content, as Sussman (2000) reinforces by stating that key ways of censoring include: “devising Internet–explicit licensing and regulation, applying existing restrictive print and broadcast laws to the Web, filtering Internet content through control of the servers, or censoring electronic content deemed unacceptable after dissemination” (p. 542). Furthermore, ISPs can block websites, limit bandwidth, or block access altogether.7 If a particular individual or group has control over a telecommunications company or network and desires to restrict certain content, it directly affects the user; this highlights a strong relationship between ownership and control. This is highly relevant to the Arab World where many governments often regulate their Internet media (as well as other media), and regional powers looking to further implement their own agendas are investing in many Arab Internet and telecommunications companies.
At the launch of the Beirut (Lebanon) Chapter of The Internet Society8 in October 2010, the past COO of The Internet Society—Jon McNerney—stated that no one owns the Internet. Paraphrasing him, he discussed how, on the contrary, “the People” own the Internet. We happen to disagree, however. The reason for this disagreement is reinforced by our theoretical framework, which is grounded in the Agenda–Setting Theory proposed by Maxwell E. McCombs and Donald L. Shaw (1972). This theory suggests that the perceived importance of issues and the type of content available are constructed and framed in a specific and deliberate way to implement the agenda of the media power in the general public. The public perceives what is being presented as information that is more factual, true, and real, and is thus more credible and more important (McComb & Shaw, 1972). This theory relates to our work, because Internet media regulators, regulations, policies, and access are often influenced by the owners of the individual companies,9 so one may draw inferences that as increasing numbers of people are investing in Internet access, more control is being exerted by these owners with the intention to not only increase their financial assets, but influence public opinion, control content, and perpetuate their agenda(s).
Using Saudi Arabia as an example, even though Internet users to a large extent are their own gatekeepers, the Saudi Arabian government is explicit about the content they block. The Saudi Arabian Communication and Information Technology Commission (CITC)—the body responsible for regulating information and communication technologies in the Kingdom—states clearly on its website that, “[blocking content] saves many of them from all the harmful and offensive content [on] the Internet” (Communication and Information Technology Commission, 2010, Conclusion). Rinnawi (2011) continues to articulate the gravity of political and cultural censorship by listing it as the first of the six main obstacles he presents facing/hindering the Arab Internet (p. 9),10 and also describing the various types of Internet controls and restrictions each country employs (pp. 19–24).
Other studies have documented the connection between ownership, regulation, and available content (Rinnawi, 2011; Fandy, 2007; Hofheinz, 2005; Adel, 2003; Aladwani, 2003; McChesney & Schiller, 2003; Al–Tawil, 2001; Cave & Mason, 2001; Compaine, 2001), while additional literature exists highlighting the relationship between government regulation, heavy start–up costs, and limited ability for investment (Rinnawi, 2011; Aladwani, 2003; Ngini, Furnell, & Ghita, 2002). Sussman (2000) echoes this by underscoring how important the Internet in Saudi Arabia is to businesses, yet key Saudi Arabian figures believe that the Internet was delayed until technology “was available to bar access to information contrary to Islamic values and dangerous to our society” (p. 540). Moreover, he identifies the United Arab Emirates (U.A.E.) as what the Human Rights Watch called “the most wired country in the Middle East,” yet “the regional leader” in restricting access to websites (p. 540). Rinnawi (2011) reinforces this by stating: “…the Arab governments attempt to do their best to be updated in the field of the telecommunications and the Internet. However, they did and still [are] doing their [best] efforts to restrain the development of the Internet in their countries” (p. 1).
To answer the research question stated previously, we decided to conduct a critical empirical analysis (document analysis) utilizing unobtrusive methods with the aspiration of finding links, relationships, and connections to other Arab individuals, Arab governments/countries, or international companies, organizations, or governments. We decided to focus on six countries because of the availability of the information we were accessing as well as the various geographic locations within the region, demographic consistencies, and the political and economic situations and influences: Egypt, Jordan, Syria, the United Arab Emirates, Saudi Arabia, and Lebanon.11 We then searched for a listing of these countries’ Internet service providers (usually found on their Ministry of Telecommunications or some other related Ministry’s website).12 We mapped out the ownership of each individual ISP by going to their website for that respective country, and scrutinized the websites with ambitions to discover who and/or what has shares in the company (usually found in the “About Us,” “History,” or the “FAQ” sections of the website. They may also have a corporate website dedicated to this information). We recorded the website URLs that we used (for instance, we took the URL down from the “About Us” section, as well as from a company that is invested in it, and/or a government website if a government is investing in it).
We also included the analysis of the “6 W’s” of each country’s ISPs (the who, what, when, where, why, and how). Although we mainly focused on the “who” and “where,” this focus included examining who owned the companies and what their nationality is, what other business or work they are involved in, where the headquarters of the company (and of its parent company and subsidiaries) are located, when these companies were established (as well as other important dates and information related to ownershi,p such as mergers and acquisitions), why are they investing in them, and how their ownership is connected to other individuals, governments, and/or larger companies. Part of the purpose of this was to look critically for connections between Arab countries/the Arab World, as well as with international governments and corporations.
We examined documents and annual reports from these websites and their owners' websites when available to check for shareholders, acquisition(s), financial problems, mergers, executives, boards of directors, and any additional relevant information. We were careful to also take note of the names and nationalities (if possible) of the corporate leaders (chairperson, CEOs, presidents, etc.) —and especially the board of directors for each company—or government officials in case of government investment/ownership. If the ISP was owned by another company then we would follow the “6 W” process with the other company as well so that if we could link these names and these corporations/governments to any of the other ISP owners that we had previously found, we would consider the following questions: (1) Is there a connection? (2) Who is investing? (i.e., which individuals, companies, and governments, and what are their nationalities?) (3) What might their interests be? And (4) what are their professional backgrounds? Lastly, if the website did not have ownership information, then we emailed them (going directly to the source) requesting access to any available information.
RESULTS – overview of General trends
After experiencing considerable difficulties ascertaining information from the different websites in addition to no answers from twenty–five emails we sent to various ISPs and ISP owners (e.g., the Saudi Telecom Company) throughout the Arab World,13 we decided that the most prudent and efficient report of results could be refined to the most predominant ownership trends found among select major ISPs from the six different countries. Before discussing in–depth each of the six countries, some of the general trends we discovered in our analysis included: the United Arab Emirates and Saudi Arabia are highly invested in the MENA region’s telecommunications; interconnections exist between Egyptian, Jordanian, Emirati, Saudi Arabian, and Lebanese companies; there is limited investment from outside the region.14 This is reinforced by the research of Varoudakisa & Rossotto (2004) who concluded: “…foreign ownership is most severely constrained…” (p. 59). Generally, there are two to four big, dominating companies followed by many smaller companies, but many of the present ISPs came about by the merger/acquisition of smaller companies forming a bigger company that is then bought by an even larger company. We also observed that women hold very few management positions: the ISP organizational hierarchies are male dominated.15 Lastly, we can divide each country into groups depending on their telecommunications investment trends. For instance, companies in Saudi Arabia and the U.A.E. are investing into other countries' telecommunications, while Lebanon and Jordan are being invested into. Egypt is both investing into other countries, and being invested into, while Syria is neither investing into other countries or being invested into (and why this particular phenomenon is occurring is discussed below).
Results – Egypt
Egypt is the most populous country in the Arab World in addition and has one of the oldest Internet networks in the region (introduced in 1993). In 2009, the Egyptian population was close to 80 million (http://www.internetworldstats.com/af/eg.htm),16 and 16.65 million of them were using the Internet in 2009.17 Although there was not an official Ministry website page with the exact number of Internet service providers available, Egyptsites.com — division of Emox, a Lebanese business and internal development company18 (http://www.egyptsites.com/main/about.asp) — lists twenty–four Egyptian ISPs with websites. Of those twenty–four websites, we focused on interesting trends regarding three Egyptian ISPs.
The first included ownership trends of a major Internet service provider, Internet Egypt. Internet Egypt consolidated with another company called the Egyptian Company for Networks (EgyNet).19 In October of 2008, Etisalat—a large telecommunications corporation based in the U.A.E.—acquired 100 percent of EgyNet (and thus, Internet Egypt).20 This shows investment from the U.A.E. into Egypt.
The second company was LINKdotNET, one of the largest ISP in Egypt as well as the region, with offices in Saudi Arabia, the U.A.E., Qatar, and Algeria.21 A product of the merger of the first established ISP in Egypt (InTouch Communications) and Link Egypt in 2000,22 it continued its expansion in 2002 by acquiring eight other ISPs.23 Currently, Mobinil (the Egyptian Company for Mobile Services) is negotiating the acquisition of LINKdotNET from Orascom Telecom Holding S.A.E. (Orascom Telecom (O.T.)).24, 25 Orascom Telecom is an Egyptian–based telecom company with holdings throughout the region including Egypt, Tunisia, Algeria, and the Alfa mobile network of Lebanon, in addition to holdings outside of the region in Canada, Sub–Saharan Africa, Pakistan, Bangladesh, and North Korea.26 This is significant because Mobinil is:
owned by Mobinil Telecom (51 percent) and Orascom Telecom (20 percent), with the remaining 29 percent publicly floated. Mobinil Telecom is itself owned by France Telecom (71.2 percent) and Orascom (28.8 percent), but following an April 2009 ruling by the International Chamber of Commerce (ICC), Orascom was instructed to sell its stake in the holding company to [France Telecom].27
According to the same website, the agreement also includes incorporating LINKdotNET Egypt (which is still currently owned completely by Orascom Telecom) into Mobinil. Although difficult to digest, this is significant because the largest Internet provider in Egypt has a connection to a French telecommunications company. Moreover, to make ownership analysis even more convoluted, presently Mobinil Telecom is owned partially by Orascom Telecom (28.75 percent) and the French Telecom Group through Orange, which owns the remaining shares (71.25 percent).28 To further complicate the ownership situation, it was recently announced that the Russian telecom company VimpelCom29 is merging assets with the Egyptian company Weather Investments.30, 31 This will entail VimpelCom acquiring the Italian mobile operator Wind, and 51.7 percent of Egypt’s Orascom Telecom (in particular Orascom Telecom’s Egyptian and North Korean operations). The Algerian government is discussing whether it will buy Orascom Telecom’s Algerian operations (BBC, 2010). The significance of this is apparent in the increased presence of Russia in regional telecommunications, but overall it reflects a testament to the volatile and liquid nature of telecommunications ownership in the MENA region.
The third relationship that was found exists between TE–Data, Telecom Egypt and Vodaphone. In 2001 TE–Data S.A.E. was established by (and is a subsidiary of) Telecom Egypt “to act as its data communications and Internet arm.”32 Telecom Egypt is a major Egyptian and regional telecommunications company33 90 percent owned by the Egyptian government.34 According to the TE–Data website, they are “Egypt’s largest IP based data communications carrier”35 and hold 61 percent of the market.36 TE–Data not only operates in Egypt, however, but in Jordan as well (see: Results – Jordan below). What is most interesting is that currently Telecom Egypt owns 44.95 percent of Vodaphone Egypt,37 the Egyptian branch of the multinational, intercontinental telecom company Vodaphone, which is based in the United Kingdom.38 Moreover, Telecom Egypt and Vodaphone are continuing to expand their partnership. This highlights increased cross–national alliances between a European–based global telecommunications corporation and a regional telecommunications powerhouse.
The last interesting ISP relationship is between Yalla Egypt and the Mohammed Abdulmohsin Al–Kharafi & Sons Company (MAK Group) of Kuwait.39 This highlights a regional investment relationship, although it is small.
Results – Jordan
Internet usage in Jordan continues to rise, and as of 2009, there were 1.6 million users (http://www.internetworldstats.com/af/eg.htm).40 Additionally, there are eleven ISPs according to (http://muoffaq.qabbani.net/?p=935).41 Out of these eleven, we found interesting trends regarding four ISPs.
The first was Batelco (Bahrain Telecom) Jordan, a company that is 20 percent owned by Jordanians, and 80 percent owned by Batelco Bahrain (the “only major Bahraini telecom company”42).43 This is a company that runs “significant operations” in Bahrain, Jordan, Kuwait, Saudi Arabia, Yemen, and Egypt,44 as well as in India.45
The second was TE Data Jordan. TE Data Jordan is owned solely by TE Data – Egypt S.A.E. (discussed in the Results – Egypt section above) and its major shareholder is Telecom Egypt, with 92.5 percent of the total number of shares.46 Until 2010, three Egyptian state banks (National Bank Of Egypt, Banque Misr and Banque du Caire) each held 2.5 percent of the shares of TE–Data.47 This “provide[ed] TE Data Egypt with a confident financial stability…”48 Since January of 2010, however, Telecom Egypt “acquired the remaining 4.95 percent of TE Data [shares], to have full ownership of its broadband subsidiary.”49, 50 The financial backing of a powerful and growing Egyptian regional telecommunications company (Telecom Egypt), coupled with complete control over TE Data Jordan’s operations translates to a significant amount of financial resources and capital being invested into Jordan from Egypt, but also increased Egyptian hegemony and control over Jordanian Internet.
The third trend consists of a smaller company called VTEL, which is owned completely by VTEL Holdings, a privately owned U.A.E. company.51 The fourth consists of Orange, the commercial brand of France Telecom alluded to previously. Apart from demonstrating a French influence in Jordan, it also highlights a trend towards consolidation: the Jordan Telecom Company combined its four companies in 2006 under the aegis of being the sole integrated operator in Jordan before adopting the Orange name in 2007.52
Results – Syria
The Syrian Arab Republic presents a completely different picture when compared to much of the rest of the Arab World. As of 2009, Syria had 3.565 million Internet users (http://www.internetworldstats.com/me/sy.htm),53 but as of May 28, 2010 the “official” website (the Ministry of Communication and Technology) stated there are only two “suppliers” (ISPs) of Internet services in Syria.54 These two ISPs are Syrian Telecom, owned solely by the government (http://www.ste.gov.sy),55 and SCS–Net (Syrian Computer Society Network), which is owned by the Syrian Computer Society (http://www.scs.org.sy/).56 Furthermore, as the OpenNet Initiative (2009) reports:
The telecommunications market is Syria is the most regulated in the Middle East and is among the least developed. State–owned Syrian Telecom (STE) owns all telecommunications infrastructure and has made some substantial investment to bring services to rural areas, but limited competition exists with private ISPs competing with STE in the Internet provision market (p. 2).
Together Syrian Telecom and the SCS–Net provide a significant relationship because the Syrian Computer Society was founded by Bassel al-Assad,57 and is undoubtedly still connected to his brother, the current Ba’athist President Bashar al-Assad (although this is not mentioned on the website). This essentially forms a monopoly over the major Internet networks and the Internet infrastructure of Syria, controlled by the government, which is rooted in political and military hegemony. This leads to the Syrian government restricting, regulating, and controlling not only access and content, but also dissemination.58
RESULTS – THE United Arab Emirates
As of 2009, the U.A.E. had 3.56 million Internet users59 and only four Internet service providers (Oger Telecom, Etisalat, Du, and Precedence, although we only focus on the first three). One interesting point to note is that ownership of the U.A.E.’s ISPs is limited to Emirati nationals (with the exception of Oger Telecom that allows for some non–Emirati nationals).
The Saudi Arabian–based Saudi Oger Group (which will be discussed in greater depth in the “Lebanon” section) controls Oger Telecom (based in the U.A.E.). Oger Telecom is a regional leader in telecommunications services, in particularly in the Arabian Peninsula, having significant operations in Saudi Arabia, Lebanon, Jordan, South Africa, and Turkey (http://www.ogertelecom.com/about.html).
Etisalat is also invested in Saudi Arabia and Egypt (as discussed in the “Egypt” results) (http://www.etisalat.ae). According to Rinnawi (2011), Etisalat was the first to connect the U.A.E. to the Internet, and he contends that they have “a monopoly over [the] telecommunications services in the U.A.E.” (p. 3). Our findings do not substantiate this claim, however, as Oger Telecom and Du (as well as Precedence) have a strong presence in the country's ISP market as well. This leads us to conclude that Rinnawi’s data may simply be out–of–date.
Lastly, Du is a large, local, U.A.E.–based ISP with “over 50% of its senior management team and customer–facing staff [(as well as the board of directors) consisting of] U.A.E. nationals” (http://www.du.ae/en/about/who–we–are). Additional information regarding ownership was not listed on their website, and could not be accessed.
Results – Saudi Arabia
The Kingdom of Saudi Arabia is also, not surprisingly, an interesting anomaly. With over 7.76 million people using the Internet in 200960 and at least fifty licensed ISPs (http://www.internet.gov.sa/learn–the–web/guides/list–of–service–providers), it would seem intuitive that competition is rampant and options are very diverse. But the providers with the most costumers are all connected to the Saudi Telecom Company (S.T.C.) in some way. The Saudi Telecom Company is the leading national provider of telecommunication services in the Kingdom of Saudi Arabia,61 and it creates something similar to a monopoly,62 at least exerting incredible amounts of control. The main contenders in the Saudi Arabian Internet service provider market (and the ones we primary focused on) are: Cyberia, AwalNet, SaudiNet, Nesma, Naseej, and Al–Alamiah Internet & Communications Co.
In 2002 Al–Alamiah Internet & Communications Co. and Naseej combined with AwalNet, keeping the AwalNet name.63 In 2007, the S.T.C. bought AwalNet so that the S.T.C. now owns 97 percent of it (http://www.ameinfo.com/117042.html). The S.T.C. also owns SaudiNet (www.stc.com.sa), and has a 35 percent share in Oger Telecom (based in the U.A.E.), which owns Cyberia (http://www.cyberia.net.sa/about_us/about_us.asp), and Cyberia owns Nesma (http://www.nesma.net.sa/). We will explore the connection between Cyberia, Oger Telecom, and the S.T.C. in the “Lebanon” section next.
RESULTS – LEBANON
As of 2007, there were 16 official ISPs registered with the Lebanese Ministry of Telecommunications (http://www.mpt.gov.lb/isplist.htm), and 945,000 Internet users in 2009 (http://www.internetworldstats.com/me/lb.htm).64 Only four of the 16 official ISPs were explicit about their ownership on their websites. These included: FarahNet, Inconet Data Management (IDM), SODETEL, and Cyberia – Lebanon.
FarahNet is a small ISP that was started by two enterprising Lebanese men: Ghassan Assi and Fadi Hamad (http://www.farahnet.net/FarahNetProfile.pdf). Inconet Data Management (IDM) is substantially larger, being one of the biggest ISPs in Lebanon,65 and is owned by GlobalCom Data Services (http://www.executive–magazine.com/getarticle.php?article=12825), a large Lebanese communications company based in Beirut. SODETEL is more divided, with 10 percent of their shares belonging to Telecom Italia, 40 percent belonging to France Telecom/Orange, and 50 percent belonging to the Lebanese Ministry of Telecommunication (http://www.sodetel.net.lb/aboutus.php).
Cyberia is one of the largest ISPs in the region, extending into Lebanon, Jordan, the U.A.E, and Saudi Arabia.66 In 2006, Cyberia announced 25 percent ownership in the Abdali Communications Company (ACC), the telecommunications division of Abdali Investment and Development in Jordan, which is investing in urban development in Amman (http://www.abdali.jo/about.php). Additionally, Saudi Oger—a company that specializes in construction, facilities management, real estate development, infrastructure development, printing, telecommunication, utilities, and IT services (http://www.saudioger.com/index.html)—is investing in ACC.67 This is significant because Oger Telecom owns Cyberia;68 Oger Telecom is owned primarily by Saudi Oger (65 percent) (http://www.ogertelecom.com/default.html) with the other 35 percent being controlled by the Saudi Telecom Company.
Significant Lebanese–Saudi Investment relationships
One of the most notable relationships to mention echoes what Kraidy (2010) called the “Lebanese–Saudi Connection,” but one that runs much deeper than reality television. Keeping in mind the connections between Cyberia, Saudi Telecom Company, Oger Telecom, and Saudi Oger, members of the Saudi Oger Board–of–Trustees include:
Saad Rafic Hariri (the outgoing Prime Minister of Lebanon, and son of the deceased former Lebanese Prime Minister and billionaire businessman: Rafic al–Hariri) is the General Manager of Saudi Oger Ltd.,69 a member of the board of directors, as well as “the Chairman of Oger Telecom” (http://www.saudioger.com/overview_key.html).
Bahaa R. Hariri70 (Eldest brother of Saad, Fahed, and Ayman).
Mohammed Hariri is the cousin of Rafic Hariri, and is the alleged chairperson and executive committee member of Oger Telecom (according to that website: http://www.ogertelecom.com/Board_of_Directors.html), a Senior Vice President for Finance and Administration, and the Secretary General of the Board of Directors of Saudi Oger Ltd.71
Mouwafac Hariri72 is a cousin of Rafic Hariri, and is also considered a “key executive” for Saudi Oger.
Ayman R. Hariri73 (Younger brother of Saad, Fahed, and Bahaa) is the Deputy General Manager and member of the Board of Directors of Saudi Oger Ltd.
Fahed R. Hariri74 is also a brother of Saad, Fahed, and Bahaa.
Other “key executives” of Saudi Oger include:
Mazen Hariri75 is the Chief Financial Officer and a board member of Saudi Oger Jordan, and director of the Saudi Oger Training Institute.
Basile Yared76 is a board member of the Directors of Saudi Oger Ltd., and Chairman of FRADIM—the French affiliate of Saudi Oger Ltd. that represents the non–banking companies of the Hariri group. He is also a board member of BankMed (a major Lebanese bank77) and the MedGulf Insurance Company (a Lebanese company that has branched into the Arabian Gulf, in particular into to Saudi Arabia and Bahrain78), as well as Solidere real estate company—the Lebanese Company for the Development and Reconstruction of Beirut Central District S.A.L., and An-Nahar newspaper in Lebanon.
Even though Internet media is growing and changing, we did not find a substantial amount of secondary literature relevant to Internet ownership in the Arab World dated later than 2004. Secondly, our sample was primarily convenient, and did not contain a random element. Many of the websites lacked information, in particular regarding ownership. Sometimes websites had broken links or would not load for unknown reasons. Furthermore, none of the emails we sent elicited a response by any of the companies. Lastly, some of the websites were in Arabic and did not have a mirror site in English (although Google Translate helped us to overcome this obstacle).
Implications and Conclusion
Internet media is a medium that is going to continue to expand throughout the world, affecting our lives by facilitating the ways we shop, communicate, connect, network, research, understand, and live. This is not a phenomenon foreign or exclusionary to the Arab World. Our findings reinforce the notion that there is a strong economic and political link between Egypt, the UAE, Lebanon, Jordan, and Saudi Arabia. Other countries such as Kuwait and Bahrain are also investing in regional ISPs. Finally, no monopolies exist (with the partial exceptions of Batelco in Bahrain, and Syrian Telecom and SCS–Net in Syria. This is consistent with the information presented by Rinnawi (2011, pp. 126–133)79), but there are emerging oligopolies of Arab Internet media, specifically growing individually out of each of the countries we examined. These companies dominate their opponents, in particularly the smaller ISPs, frequently merge with other companies, and could lead to stifled competition if inter–country oligopolies develop. This is a topic that needs to be explored more thoroughly to reach a deeper conclusion. Moreover, more information needs to be gleaned—especially from the sources to which we could not gain access—that could paint a more holistic and encompassing picture of the economic and political connections that are constantly being made and reforged in the Arab World as consolidation continues.
Our results directly challenge the findings of Varoudakisa & Rossotto (2004), who concluded that: “MENA telecommunications markets remain less open to competition than elsewhere in the developing world [as] competition is hindered, private participation is scarce…while regulatory regimes do not support fair competition” (p. 59, pp. 75–76). Although there is a concentration of ownership in certain Arab countries, and high start–up costs (Rinnawi, 2011), as well as a concentration of other business-conducive resources such as political capital and connections80, can deter a potential entrepreneur or group from starting a company, we argue that competition is not hindered for Arab investors, as Egypt and Lebanon clearly demonstrate. While certain Arab countries such as Bahrain or Jordan may have fewer Internet companies, or countries such as Saudi Arabia and the UAE may have dominant companies, it is inaccurate to assume that applies to all countries within the MENA region. On the hand, it seems accurate that competition is hindered for companies that lie outside of the region, such as European or North American companies.81 Even this, however, is changing, as seen by France Telecom (and more recently, by the Russian company VimpelCom), which is becoming a dominant force among providers of Arab Internet. This may point to Varoudakisa & Rossotto’s (2004) conclusions as simply being outdated.82
Contextualized to the Arab World, the significance of understanding media ownership can be summarized in one word: potential; the potential for control, for setting/perpetuating specific agendas, for new and expanded revenues, and for infrastructure development. Furthermore, as the recent social and political uprisings in the region have illustrated, the Internet is a proxy battleground for state hegemonic dominance, and for the assertion of control and restriction of freedoms. Guns once signified power, but now it is information that dictates and equals money, power, and ultimately, control. As more influence from investors coming with agendas takes hold in other parts of the region, there might be further serious challenges to Internet freedom, Internet security, and Internet development. This is also a two-way street that might lead to more control (e.g., such as Saudi Arabian political and Wahabi Islamic religious ideologies being transported into Lebanon via Lebanese Internet telecommunications investment), or less control (e.g., such as the opposite: “Western,” “liberal,” or “anti–Islamic” ideologies being transported into Saudi Arabia via Saudi Arabian Internet telecommunications investment). This is not farfetched as certain Arab countries are already dominant in other mediums, such as TV. The Internet is no exception, and one thing is certain: with the amount of political and financial investment in the Internet, it is a medium that is not disappearing in the Arab World anytime soon.
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COMPANY WEBSITES ACCESSED
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BankMed. (2008). About Us – Profile. http://www.bankmed.com.lb/Pages/Profile.aspx.
Batelco Jordan. (2006). About Batelco. http://www.beta.batelco.jo/pages.php?menu_id=8.
Cyberia. (2010). About Us. http://www.cyberia.net.sa/about_us/about_us.asp.
EgyNet. (2010). About Us. http://www.orientory.com/egynet/.
Entisalat. (2010). Corporate Profile. http://www.etisalat.ae/.
FarahNet. (2010) Our Profile. http://www.farahnet.net/Profile.html.
France Telecom–Orange. (2010). About Us. http://www.orange.com/en_EN/group/.
GlobalCom Data Services. (2010). About Us. http://www.gds.com.lb/company–profile.html.
Inconet Data Management. (2010). About Us. http://www.idm.net.lb/about/index.asp.
Internet Egypt. (2006). Internet Egypt. http://www.internetegypt.com/.
Internet Society. (2010). About The Internet Society (ISOC). http://www.isoc.org/isoc/.
Lebanese Ministry of Telecommunications. (2010). Home. http://www.mpt.gov.lb/.
LINKdotNET. (2008). Our History.
MedGulf Insurance Company. (2008). About MedGulf – Story.
Mohammed Abdulmohsin Al–Kharafi & Sons Company (MAK Group) (2010). Profile.
Oger Telecom. (2010). About Us. http://www.ogertelecom.com/about.html.
Orascom Telecom Holding. (2010). About Us
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Nesma. (2010). Our Company. http://www.nesma.com/.
SaudiNet. (2004). About Us. http://saudinet.com/.
Saudi Oger. (2010). Board of Directors. http://www.ogertelecom.com/about.html.
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SCS–Net. (2004). About Us.
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Syrian Telecom. (2009). About Us. http://www.ste.gov.sy/.
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TE–Data – Jordan. (2008). About Us.
Telecom Egypt. (2010). About Us. http://www.telecomegypt.com.eg/English/index.asp#.
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Vodaphone. (2011). About Us. http://www.vodafone.com/content/index/about/about_us.html.
VTEL Jordan. (2010). Overview. http://www.vtel.jo/Overview.html.
1 This study was originally completed as a research requirement for a graduate seminar (Mass Media in the Modern Arab World) at the American University of Beirut during the 2010 spring semester. The course was co–instructed by: Dr. Nabil Dajani, PhD., and Dr. Jad Melki, PhD. We are very grateful for their assistance, and their suggestions on how to improve this paper.
2 This study was presented at the Global Dilemmas of Security and Development in the Middle East international conference hosted by the Jagiellonian University in Krakow, Poland on 10 November 2010.
3 Michael is a graduate student in the Department of Social and Behavior Sciences pursuing an MA in sociology and the primary correspondent: Box 2127, American University of Beirut, Bliss Street, Beirut, Lebanon. Telephone: +(961) 71–363574. E–mail: firstname.lastname@example.org.
4 Helen is a graduate student in the Institute for Middle East Studies pursuing an MA in Middle Eastern studies with a concentration in conflict resolution.
6 One only has to go so far as to observe the amount of Internet service providers (ISPs) each country has. But the amount of economic and developmental (e.g., infrastructural) potential is huge!
7 Evidence of this is seen in reports coming out of multiple countries—most notably the United States—as the United States Federal Communications Commission (FCC) continues to battle service providers over the issue of “net neutrality.” Part of this battle includes discussion over how much regulatory power ISPs can exert over their clientele base. For more information, see the following articles: Kang, C. (2010, May 7); Wyatt, E. (2010, May 6); Shields, T. (2010, May 6); and McCullagh, D. (2010, April 6).
8 The Internet Society (ISOC) is a Geneva–based, non–profit organization founded in 1992 whose mission is to provide leadership in Internet related standards, education, and policy. They seek to ensure the open development, evolution, and use of the Internet for the benefit of people throughout the world. For more information, see: http://www.isoc.org.
10 He also includes expensive costs, poverty, illiteracy (digital illiteracy in particular), infrastructure, and language barriers (pp. 9–10). Furthermore, limited access, infrastructure limitations, few (if any) regulations or oversight (as well as watchdog groups such as those that exist in the U.S. and Europe) in existence governing company consolidation and mergers including the effect they have on the consumer, and much consumption, but little production (such as blogging) are also issues plaguing Arab Internet.
11 Bahrain and Kuwait were not included, but are still discussed later in this work because of their connection with other Arab countries.
12 The individual websites will be given with the results by country analysis.
13 In fact, many of these emails “bounced back” (having never even been received) even though the contact email address listed on the website was often the email correspondence link specifically for customer service and/or a company inquiry. An interesting occurrence that happened, however, was when we emailed one company whose email “bounced back” to us with a question about rates of service, they promptly sent us the information we requested.
14 Of that outside investment, the majority of it comes from France via France Telecom through Orange, its commercial arm.
15 The only company that had women on its management team was Batelco in Bahrain.
21 Information retrieved from: http://www.link.net/English/Linkcorp/About/Our History/.
24 Reuters (2009, March 23).
25 This is particularly interesting as well because according the Orascom Telecom website (About Us: http://www.orascomtelecom.com/about/Contents/default.aspx?ID=765), Mobinil was O.T.’s “first operation,” and is “one of Egypt’s five largest companies on Cairo & Alexandria Stock Exchange (“CASE”) in terms of market capitalization.”
26 Information retrieved from: http://www.orascomtelecom.com/about/Contents/default.aspx?ID=765.
27 Information retrieved from: http://www.telegeography.com/cu/article.php?article_id=32800.
28 Information retrieved from: http://www.MobiNil.com/aboutMobiNil/shareholder.aspx.
29 VimpelCom “owns Russia’s second–largest mobile phone operator, as well as service providers in Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Georgia, Armenia, Kyrgyzstan, Vietnam, and Cambodia” (BBC, 2010).
32 Information retrieved from: http://www.tedata.net/web/eg/en/default.aspx?sec=25&pr=2.
33 Including operations throughout Egypt and Algeria (http://ir.telecomegypt.com.eg/Company%20Milestones.asp).
34 Information retrieved from: http://ir.telecomegypt.com.eg/Company%20Milestones.asp.
35 Information retrieved from: http://www.tedata.net/web/eg/en/default.aspx?sec=25&pr=2.
37 Information retrieved from: http://ir.telecomegypt.com.eg/Company%20Milestones.asp.
38 Information retrieved from: http://www.vodafone.com/content/index/about/about_us.html.
41 No information could be found on the Jordanian Ministry of Telecommunications website as to the official number of ISPs.
42 Information retrieved from: http://www.batelcogroup.com/portal/en/49/chief–executive–statement.aspx.
43 It is interesting to note, however, that in their Chief Executive Statement on the Batelco Bahrain website, they discuss competition: “In Bahrain, there are now over 75 operators holding 185 licenses. The intense competitive environment, combined with ongoing regulatory reform, is a great motivator to keep us innovating and improving for the benefit of our customers” (Ibid.).
45 Information retrieved from: http://www.batelcogroup.com/portal/en/49/chief–executive–statement.aspx.
46 Information retrieved from: http://www.tedata.net/new/tedata_jordan/en/outer.aspx?secId=72.
49 Information retrieved from: http://ir.telecomegypt.com.eg/Company%20Milestones.asp and http://tinyurl.com/TEDataPressRelease.
50 This has not been updated on TE–Data – Jordan’s website, however.
55 See: OpenNet (2009), and in fact the Syrian Telecom website clearly states that: “…[Syrian Telecom] has the rights exclusively for telecommunications in all parts of the Syrian Arab Republic…” (Information retrieved from: http://ste.gov.sy/index.php?m=58).
56 Information retrieved from: http://www.scs–net.org/portal/AboutSCSNET/tabid/53/Default.aspx
57 Information retrieved from: http://www.scs.org.sy/structureview.php?subtempleid=4.
58 This is further reinforced by the banning of certain websites such as Facebook, YouTube, and online services such as Skype as well as many others claiming they are tools that can be used to communicate with Israel (this includes closely monitoring blog sites as well). Even though many of these bans and restrictions can easily by circumvented by proxies and other services, strong regulation of the Internet and what is posted online (as well as in print, broadcast, and other media) is the norm in the Syrian dictatorship state. For more information, see: Associated Press (2008, March 26); Ali, A. (2007, November 27); and the OpenNet Initiative (2009).
59 Information retrieved from: http://www.internetworldstats.com/me/ae.htm, but although it is cited on the Internet World Stats website, their information is sourced from the Telecommunications Research Associates (TRA) (http://www.tra.com/).
60 Information retrieved from: http://www.internetworldstats.com/me/sa.htm, but although it is cited on the Internet World Stats website, their information is sourced from the International Telecommunication Union (ITU) (http://www.itu.int/en/pages/default.aspx).
61 Information retrieved from: http://www.stc.com.sa/cws/portal/en/stc/stc–landing/stc–lnd–abtsaudtelc.
62 Yunis, E. M. (2003, February 19), accessed from: http://www.isp–planet.com/research/rankings/ksa.html.
63 Ibid., as well as see: https://www.zawya.com/printstory.cfm?storyid=ZAWYA20070417110129&l=110100070417.
64 Information retrieved from: http://www.internetworldstats.com/me/sa.htm, but although it is cited on the Internet World Stats website, their information is sourced from the International Telecommunication Union (ITU) (http://www.itu.int/en/pages/default.aspx).
66 See: Baradei, D. (2006, October).
79 Although Qatar is not included in our analysis, Rinnawi (2011) additionally states that Qatar Telecom (the Q–Tel Company) has a monopoly over Qatari Internet (p. 130).
80 The Arabic term wasta refers to personal connections (and literally means “by means of”) that encompass all forms of political, economic, or social capital that an individual or group may access. This is a very important concept to achieving success in almost any endeavor or career in the Arab world as it alludes to nepotism and favoritism, and reflects widespread corruption.
81 This conclusion may have been particularly displeasing to the institution that commissioned and supported their research: The World Bank.
82 Indeed many of the mergers and acquisitions have only occurred recently since 2005. The study that Varoudakisa & Rossotto (2004) conducted was done almost a decade ago (submitted 1 February 2002 (p. 59), and merely published in 2004).