VZCZCXYZ0000
RR RUEHWEB

DE RUEHAM #0833/01 0971216
ZNR UUUUU ZZH
R 071216Z APR 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 4818
INFO RUEHGB/AMEMBASSY BAGHDAD 6220
RUEHLB/AMEMBASSY BEIRUT 3035
RUEHEG/AMEMBASSY CAIRO 3998
RUEHDM/AMEMBASSY DAMASCUS 4137
RUEHRH/AMEMBASSY RIYADH 2132
RUEHTV/AMEMBASSY TEL AVIV 1656
RUEHJI/AMCONSUL JEDDAH 0875
RUEHJM/AMCONSUL JERUSALEM 5461
RUCPDOC/DEPT OF COMMERCE WASHDC
RHDIFCC/FCC WASHDC

UNCLAS AMMAN 000833 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA AND EEB/CIP/BA (FINTON) 
STATE PASS TO COMMERCE FOR ITA/OTEC (BENNETT) 
STATE PASS TO FCC (TANNER) 
 
E.O. 12958: N/A 
TAGS: ECPS EINT EINV TINT JO
SUBJECT: GROWING INTERNET COMPETITION AND LAUNCH OF A 3G TENDER IN 
JORDAN 
 
REFS:A) State 27310 
     B) 08 AMMAN 3368 
      C) 08 AMMAN 2782 
      D) 08 AMMAN 2490 
 
¶1. (SBU) Summary: In response to ref A, this cable provides an 
update on Jordan's initiatives and strong government commitment to 
improve telecommunications and Internet connectivity.  Such efforts 
led to an increase in Jordan's rank to 44 out of 134 countries in 
the World Economic Forum's (WEF) 2008-2009 Global Information 
Technology Report.  Over 22% of Jordanian households accessed the 
Internet in 2008, and the Ministry of Information and Communications 
Technology (MOICT) expects Internet use to increase as prices fall 
with growing competition in international gateway access. 
Approximately 94% of Jordanian households have at least one cell 
phone, which is considered high for a country with a per capita 
income of about $3,000.  The Jordanian government issued a tender 
for a Third Generation (3G) mobile communications license on March 
¶30.  Job loss in the information technology sector remains low, and 
a government program seeks to support employment of new graduates. 
End Summary. 
 
ICT READINESS 
------------- 
 
¶2. (U) Jordan ranked 44 out of 134 countries in the WEF's 2008-2009 
Global Information Technology Report, compared to 47 out of 127 
countries in 2007-2008.  Jordan received its best rankings on 
government e-participation (#15); government prioritization of 
information and communications technology (ICT) (#17); and 
importance of ICT to government vision of the future (#18).  It 
ranked lowest on monthly business telephone subscription (#107); 
computer imports (#110); and freedom of the press (#110).  Overall, 
Jordan was tied with the Slovak Republic and had a higher ranking 
than Italy, China, and India.  The report highlighted Jordan's 
successes in leveraging ICT to improve its economy, which was rare 
among low-income countries. 
 
22% of Jordanians Accessed the Internet in 2008 
--------------------------------------------- -- 
 
¶3. (SBU) Jordan's Department of Statistics (DOS) reported that 40% 
of Jordanian households had a computer in 2008 and 22% were 
connected to the Internet compared to 16% in 2007.  MOICT Secretary 
General Bashar Bashaireh clarified these numbers and acknowledged 
that while fewer than 5% of households have a long-term Internet 
subscription, many households can access the Internet via pre-paid 
dial-up cards.  He added that MOICT has worked to improve rural 
access by establishing computer workstations within community 
centers and through a Ministry initiative to link all public schools 
and universities to a national broadband backbone. 
 
¶4. (SBU) Bashaireh predicted Internet use to increase as 
subscription costs fell.  He said Jordan Telecom (JT) recently 
reduced its prices 15 - 20%, most likely in anticipation of its 
upcoming loss of monopoly control over the international gateway 
through Aqaba (ref C).  Currently all Internet Service Providers, 
including the three new WiMax providers, rely on JT for such access 
which has kept connection prices high.  In 2009, at least two 
additional international access points will be added - one through 
the West Bank and one through Saudi Arabia, with a potential fourth 
access point through Syria.  Bashaireh predicted that consumer 
prices will fall by at least 50% once another international gateway 
is operational.  He said adding such international redundancy has 
been one of the Ministry's top priorities, especially since the 
disruptions in service in Egypt in December. 
 
94% of Jordanian Households Have a Cell Phone 
--------------------------------------------- 
 
¶5. (SBU) DOS reports that 94% of Jordanian households owned a cell 
phone in 2008, compared to 86% in 2007, and 75% of households have 
more than one mobile phone.  In 2008, the average monthly household 
expenditure on mobile phones was $35; a median Jordanian salary is 
approximately $500 per month.  The CEO of Orange Mobile, Majd 
Shweikeh, was quoted in the press that the potential for new mobile 
subscribers is very limited in Jordan and that future business 
 
efforts will be focused on customer retention and new services 
rather than recruiting new customers.  The WEF report estimated that 
the mobile phone sector in Jordan accounts for 5.3% of GDP which is 
more than double the average for other emerging market countries, 
and that penetration is particularly high given Jordan's low per 
capita income of approximately $3,000. 
 
3G Service Expected by the End of the Year 
------------------------------------------ 
 
¶6. (SBU) The Telecommunications Regulatory Commission (TRC) floated 
on March 30, a long-delayed tender for 3G mobile telecommunications 
service in Jordan.  TRC Chairman Ahmad Hiasat publicly announced 
that all telecommunications companies, both incumbents and 
outsiders, were welcome to participate and predicted that mobile 
wireless broadband data services would be operational by the end of 
the year.  Incumbent operators had been lobbying TRC since June 2008 
to limit participation to the four incumbent mobile providers, and 
in December 2008 they succeeded in delaying the spectrum auction by 
several months (ref D).  The auction's reserve price has been set at 
$35 million and the auction winner will also be eligible to purchase 
a separate 2G spectrum license.  In addition to the license cost, 
all providers must also pay 10% of revenues to the government. 
Bashaireh expects at least one bidder for the 3G license and said 
that such 3G services are vital to Jordan's ability to market itself 
as a foreign direct investment destination. 
 
¶7. (SBU) The 2G license is particularly needed by Xpress, Jordan's 
smallest provider.  Xpress currently has a license to offer 
Motorola's iDEN "push to talk" technology but has struggled to 
attract customers.  Xpress believes that a 2G license with GSM 
technology would allow it to better compete.  The process for Xpress 
acquiring a 2G license has been controversial with Xpress arguing 
that other providers have not had to pay large sums for a license 
and the government now believing that a valuable asset like spectrum 
should be sold at a fair price.  Xpress has been operating with a 
$54 million Export/Import Bank loan that it will likely be unable to 
pay back if it cannot receive a 2G license. 
 
Government Starts Program to Help with IT Employment 
--------------------------------------------- ------- 
 
¶8. (SBU) Bashaireh said the ICT sector remains relatively strong in 
spite of the worldwide economic slowdown.  He said that major 
e-government projects remain on-schedule (ref B).  He added that the 
GOJ has been looking for additional IT projects as a way of 
supporting local IT companies and helping them to minimize layoffs. 
He has heard rumors of layoffs in the industry but has not seen any 
data.  Bashaireh explained that the Ministry is particularly 
concerned about recent IT graduates and has developed a program 
whereby the government pays 50% of the salary of an IT worker at a 
private Jordanian company for the first 12 months of employment.  He 
said that small numbers of Jordanian IT workers have already 
returned from the Gulf, where the economy has been harder hit, but 
he predicted their arrival would remain slow until June and July 
when the school year ends. 
 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
 
BEECROFT