ERICSSON REGION MIDDLE EAST
COUNTRY REPORT: SYRIA
Ericsson RMEA contains 22 country including Turkey and became effective on 1 July 2010.
These countries are; Turkey, Egypt, United Arab Emirates, Bahrain, Jordan, Qatar, Kuwait,
Lebanon, Oman, Pakistan, Iraq, Iran, Syrian Arab Republic, Djibouti, Eritrea, Ethiopia, Sudan,
Somalia, Afghanistan, Yemen, Saudi Arabia, Palestine Authority.
This document was prepared for Ericsson Partners to provide basic country information and
key highlights of telecommunication sector in RMEA region.
Any views and/or opinions expressed in this article by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views
and/or opinions of Ericsson.
Rev PA1
SYRIA
COUNTRY REPORT
Sources: Foreign & Commonwealth Office, CIA - The World Factbook, WorldBank
Full country name: The Syrian Arab Republic
Population: 22,198,110
Capital City: Damascus
People: Arab 90.3%, Kurds, Armenians, and other 9.7%
Climate: Mostly desert; hot, dry, sunny summers (June to August) and mild, rainy winters (December to February)
along coast; cold weather with snow or sleet periodically in Damascus.
Languages: Arabic (official); Kurdish, Armenian, Aramaic, Circassian widely understood; French, English
somewhat understood
Religions: Sunni Muslim 74%, other Muslim (includes Alawite, Druze) 16%, Christian (various denominations)
10%, Jewish (tiny communities in Damascus, Al Qamishli, and Aleppo)
Currency: Syrian Pound (also called Lira – LSYR)
Government: Islamic Republic
Head of State: Lt-Gen Dr Bashar al-Assad
Prime Minister/Premier: Engineer Mohammad Naji Al-Otri
Foreign Minister: Mr Walid al-Muallam
Rev PA1
2/13
BASIC ECONOMICS FACTS
Sources: EIU, IMF, CIA - The World Factbook
GDP (purchasing power parity): $100.8 billion (2009 Estimate)
GDP - per capita (PPP): $4,600 (2009 Estimate)
Annual Growth (real GDP, 2009): 5% (2009 Estimate)
Inflation (consumer price index, 2009): 2.6% (2009 Estimate)
Unemployment Rate: 8.5% (2009 est.)
Major Industries: The two mainstays of the Syrian Economy are the oil sector and agriculture, which each
account for about a quarter of GDP, varying from year to year depending on prices and climatic conditions. In
parallel with the gradual depletion of Syrian oil reserves, growth in other sectors such as financial services,
construction, telecommunications, tourism, and non-oil industry and trade are diversifying the economy. The
private sector is slowly playing a more prominent role.
Main Exports: crude oil, minerals, petroleum products, fruits and vegetables, cotton fiber, textiles, clothing, meat
and live animals, wheat
Main Imports: machinery and transport equipment, electric power machinery, food and livestock, metal and
metal products, chemicals and chemical products, plastics, yarn, paper
Major Trading Partners: Exports – Iraq 30.22%, Lebanon 12.21%, Germany 8.89%, Egypt 6.8%, Saudi Arabia
5.04%, Italy 4.55%. Imports – Saudi Arabia 10.1%, China 9.95%, Turkey 6.97%, Egypt 6.44%, UAE 4.97%, Italy
4.93%, Russia 4.92%, Germany 4.38%, Lebanon 4.12%
Exchange Rate: 1 United State Dollar = 46.8500 Syrian Pound
TELECOMMUNICATION HIGHLIGHTS
Sources: BuddeComm, The Arab Advisors Group
Syria has the most regulated telecoms sector in the Middle East and one of the least developed. This has
resulted in a country where there is strong growth potential if the rules were to be relaxed. News reports of
coming change continue but as yet nothing has happened.
Fixed-line services remain the monopoly of state-owned Syrian Telecommunications Establishment (STE). STE is
investing in upgrading and extending its network and aims to gain 100% coverage by end-2013. Fixed-line
subscriber numbers are still rising and although penetration rates are low, they are higher than in many more
wealthy Middle Eastern countries.
STE is also investing in Syria’s very limited international infrastructure. Syria is linked to Cyprus by the UGARIT
submarine cable, a 239km cable that began operating in 1995, with designed transmission capacity limited to
622Mb/s. STE and the Cypriot Communications Authority (CYTA) have agreed to expand the cable and increase
Internet capacity and have also undertaken to establish a second undersea link. In addition, a land cable
connecting Syria, Turkey, Jordan and Saudi Arabia is expected to come online in mid-2010.
Mobile penetration rates are relatively low – Syria is one of the few markets in the region with room for expansion.
Two Build-Own-Transfer (BOT) operators, Syriatel and MTN Syria, provide mobile services. Syriatel is locally
owned and MTN is a subsidiary of MTN of South Africa, which gained ownership through its purchase of
Investcom. Both operators would prefer to convert their BOT contracts into regular mobile operator licences not
least because of the high royalties (50% of revenue) that they are required to pay to the Syrian government.
Rev PA1
3/13
Internet penetration is low and broadband penetration very low. The government exercises strict Internet
censorship with many sites, including Facebook and YouTube, blocked in addition to websites critical of the
Syrian government. Broadband services are expensive and difficult for a residential user to subscribe to, with
ADSL in Syria reported to be the least affordable in the Middle East. However there are no restrictions on
receiving the multitude of DTH satellite TV channels available in the Middle East.
Syria remains a market with great potential for expansion but requires much market liberalisation to achieve that
potential.
SYRIA MOBILE MARKET
Syriatel and MTN Syria are the mobile operators in Syria Mobile Market.
Real competition still does not exist between the two operators. GSM operators are required, according to the
signed BOT agreements between the STE and themselves, to conform to strict fixed prices. According to the
BOT agreement, the Syrian government has the right to introduce a third GSM operator after seven years of
signing the agreement. This implies a third GSM operator to be introduced to the Syrian market by 2008, but this
was delayed pending the new telecom law.
In June 9, 2010, the Syrian Parliament approved a new telecommunications law in Syria. The new telecom law
will be applicable six months after its launch; that is December 2010. The law establishes the framework for the
establishment of a new regulatory body in Syria. Accordingly, Syrian Telecom (previously known as STE) will no
longer be the telecom regulator in Syria. Syrian Telecom will be a joint-stock company, owned by the government
offering fixed and Internet services.
Reportedly, Syriatel and MTN Syria will transform their BOT contracts into licenses. Each operator will pay US$
550 million (SYP 25 billion) for the license. This is expected to happen during the first quarter of 2011.
The Ministry of Communications and Technology announced the tender for the third mobile license in Syria in
September 2010. The first phase of the tender is the pre-qualification process. Interested candidates are
requested to submit their pre-qualification documents by November 14, 2010, at a fee of US$ 6,963 (Euro 5,000).
The shortlist of the successful pre-qualification candidates will be announced in November 28, 2010. Later in
December 12, 2010 the Ministry will launch the Request for Proposal (RFP).
Source: The Arab Advisors Group
Rev PA1
4/13
SYRIA MOBILE MARKET STATISTICS
The new telecommunications law and the entrance of a third mobile operator in the Syrian market will enhance
competition; hence increase the cellular penetration in the market. By end of June 2010, Syria’s total cellular lines
reached close to 9.8 million.
Syria’s cellular lines grew by only 0.92% during the first six months of 2010. The two GSM operators in Syria
added 89,000 cellular lines during the period compared to 1.9 million lines added in 2009. Syriatel and MTN Syria
generated cellular revenues of US$ 989.254 million during the first half of 2010. The process for a third mobile
license in Syria is expected to be launched in late 2010 or early 2011, after the establishment of the new
regulatory authority.
The Syrian cellular market added 89,000 lines during the first half of 2010. Syria’s total cellular lines reached
close to 9.8 million by the end of June 2010, a growth rate of 0.92%. Syria’s cellular penetration slightly declined
from 48.2% year-end 2009 to an estimated 48.1% by end of June 2010.
Source: The Arab Advisors Group
Rev PA1
5/13
SYRIA MOBILE OPERATOR DATA
This massively reduced growth in cellular lines in Syria was mainly due to the decline in Syriatel’s subscribers’
base. The operator lost 81,000 cellular lines during the first half of 2010, which came from both Syriatel’s prepaid
and postpaid lines. The operator’s cellular lines reached 5.4 million (a market share of 54.9%) by end of June
2010, compared to 5.5 million cellular lines (a market share of 56.2%) by end of 2009.
MTN Syria added 170,000 cellular lines during the first half of 2010. The operator exceeded the 4.4 million lines,
translating into a growth rate of 4.0% and a market share of 45.2%.
Source: The Arab Advisors Group
Rev PA1
6/13
SYRIATEL
Syriatel was established in 2001 after obtaining the BOT agreement from STE to establish a 900/1800 MHz GSM
network covering Syria. The company was a joint venture between Egypt's Orascom Telecom and Syrian
investors where Orascom owned 25% equity stake in Syriatel. Legal disputes between Orascom Telecom
Holding and its partner in Syriatel, Drex Technologies, were settled on July 16, 2003 with Orascom Telecom
Holding is no longer holding shares in Syriatel. Syriatel issued a successful Initial Public Offering in September
2004. The operator is 100% privately owned and has shares being traded in a “trading floor” for its shareholders.
Source: The Arab Advisors
MTN SYRIA
The second GSM network in Syria is operated by MTN Syria. MTN Syria operates under a BOT agreement, which
means network ownership will revert back to the government when the agreement expires. MTN Syria is a Syrian
joint stock company and a subsidiary of MTN Group. MTN Group is a multinational telecommunications group
and was launched in 1994. The Group operates in Africa and the Middle East. MTN Syria launched its services
commercially on March 1st, 2001.
Source: The Arab Advisors
Rev PA1
7/13
REVENUES and ARPUS
The small growth in cellular lines resulted in a reduced growth in the total country’s cellular revenues during H1
2010. The total cellular revenues grew by only 1.2% during the first half of 2010 when compared to the second
half of 2009. Syriatel’s cellular revenues grew by 2.4% during H1 2010 (when compared with H2 2009), while
MTN Syria’s cellular revenues dropped by 0.3% during the same period. The two operators generated total
revenues of around US$ 989 million in the first six months of 2010. The blended cellular ARPU decreased by
6.5% to reach US$ 16.9 by end of June 2010 compared to US$ 18.1 by end of June 2009
Source: The Arab Advisors Group
Rev PA1
8/13
Fixed Line
Syria’s fixed lines grew by 1.25% lines during the first quarter of 2010. Syrian Telecom (the monopoly fixed lines
provider in Syria) reported adding 48,248 lines during the period compared to 96,000 added lines during Q4
2009. Syria’s fixed lines’ penetration rate reached 19.36% by end of March 2010. Syria’s fixed line market
showed a deceleration in growth during the first quarter of 2010. Fixed lines increased by 48,248 compared to
96,000 lines added during Q4 2009, a 49.74% deceleration in growth. Fixed lines reached a total of more than 3.9
million lines by end of March 2010. This increased the country’s penetration rate to an estimated 19.36% by end
of March 2010 up from 19.24% by year-end 2009.
Source: The Arab Advisors Group
Rev PA1
9/13
Syrian Telecom reported a growth of 1.89% in mainlines’ capacity (maximum number of fixed lines the network
can operate) by end of March 2010. The total capacity reached 4,769,000 lines by the end of the period, up from
4,680,000 lines in 2009. Exhibit 2 below details Syrian Telecom’s mainlines’ infrastructure.
Source: The Arab Advisors Group
Rev PA1
10/13
The Arab Advisors Group notes that the growth in fixed lines in Syria remains healthy by regional standards. This
is due to the cost advantages presented by the fixed services in comparison to cellular rates (can be seen below).
In addition to this, the Syrian market have intense cellular competition in the future, the fixed lines may well face
the same substitution pressures from the cellular services as see in other countries around the region, such as
Jordan.
Source: The Arab Advisors Group
Rev PA1
11/13
INTERNET
Syria's Internet accounts' grew by 18.03% during the first six months of 2010. Internet accounts reached 968,887
by the end of the period. Dial-up accounts constituted a massive share of 94.59% of the Internet accounts.
Syria’s Internet market added 147,981 accounts during the first six months of 2010. This increase translated into
a growth rate of 18.03% during the period. Internet accounts’ penetration increased from 4.08% by end of 2009
to an estimated 4.76% by end of June 2010. The increase in the total Internet accounts during H1 2010 resulted
mainly from the high additions of active prepaid accounts which are included in the dial-up accounts.
Source: The Arab Advisors Group
Rev PA1
12/13
By October 2010, there were 12 ISPs in Syria in addition to the satellite Internet provider – Best Italia. Among the
12 ISPS, Syrian Telecom (including Tarassul and 190.sy), Aya and SCS reported having the largest market shares
of Internet accounts. Syrian Telecom’s market share reached 19.02% by end of June 2010, followed by Aya with
16.5%, while SCS had a market share of 15.44%. As for the ADSL market shares, Syrian Telecom had the largest
share of 67.58%.
Source: The Arab Advisors Group
Rev PA1
13/13