Ruling the Arab Internet: An Analysis of Internet Ownership Trends of Six Arab Countries
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
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).