Building an e-Society in Jordan

by david.nunes
Hesham H. KhalafIssue:Africa and the Middle East I 2003
Article no.:10
Topic:Building an e-Society in Jordan
Author:Hesham H. Khalaf
Organisation:Middle East Telecom & Electronics Co., Ltd. (METE)
PDF size:40KB

About author

Hesham H. Khalaf has been the President of the Middle East Telecom & Electronics Co., Ltd. (METE), a Middle East telecommunications hardware and service provider, since 1975. METE is a private sector member of the ITU. Before joining METE, Mr Khalaf served with the Jordanian government as its Director of International Communication. Mr Khalaf has extensive experience in microwave communication, space communication, public and private switching, networks and a wide variety of telecom services including carrier operation, enhanced voice services, Internet services, IPLs, telephone cards and the like. Mr Khalaf has a BSc. in Engineering (Telecommunications). He is a member of the Jordan Engineering Association and is the Commissioner of the IT section of the Jordan Businessmen Association.

Article abstract

Jordan’s 1995 Telecommunications Law initiated sectoral reform and established the independent Telecommunications Regulatory Commission. In 1997, the country had 305,500 fixed telephone lines, mostly in the capital, and unmet demand for modern services. Today, Jordan has 2 million cell phones, 700,000 fixed-lines and 70,000 Internet subscribers. By 2005, Jordanian telecommunications will be fully open to private service providers. The Jordanian Government, together with national and international organisations, has promoted a wide variety of programmes for the digital inclusion of SMEs.

Full Article

The modernisation of Jordan’s telecommunication sector, its first step towards its inclusion in the world wide e-society, began less than ten years ago in 1995 with the passage of the 1995 Telecommunications Law. The law prepared the way for the subsequent development of the telecommunications sector and, later, made possible a wide range of Jordanian e-initiatives. The Re-organisation of Jordan’s Telecommunications Sector History The building of an e-society is a long process. In 1961 Jordan introduced its the first automatic telephone switch service – an electromechanical switch with approximately 5,000 lines. When it was established in 1971, the state-owned Jordan Telecommunications Corporation (TCC) was the country’s only telecommunications service provider. The TCC took over the operation of the country’s basic telecommunications services, its telephone, telegraph and telex, and Jordan’s satellite earth station at Baqa, which used Intelsat facilities. At the time, like other companies throughout the world in the same situation, the TCC was unable to meet the market’s demands for telecommunications services. TCC dominated the policymaking, regulation and operations for the sector, and blocked private participation and competition. This resulted in a weak telecommunications sector with unsatisfied customers and poor service. Despite significant expansion between 1973 and 1985 as part of a government investment programme, and the 1993 development plan called the National Telecommunications Program (NTP), there was still a long – 8 to 10 year – waiting list for telephone lines. In 1997, Jordan had only 305, 500 fixed telephone lines and a penetration rate of 7.24 lines per 100 population. Service was concentrated in the capital area where the density was double the country average. Jordan’s system compared poorly not only with the developed world, but also, in the region, with Israel which had a 41.8 line per 100 penetration. There was also growing demand from businesses that needed advanced services such as data communications, cellular mobile and satellite-based services to compete in global markets. The availability of data communications, paging, public payphone and analogue mobile services was very limited and greatly hindered the nation’s economic development. Nevertheless, the TCC was profitable. It earned a substantial amount of foreign exchange, due to high international tariffs for the government. In 1994, as a monopoly, it generated revenues of US$ 718 per line – all of which went to the country’s treasury and limited the funds it needed for maintenance and expansion. The Telecommunications Law of 1971 (amended in 1993) formalised, the incumbent TCC as the central company in the sector. Under the new law, the TCC accumulated the functions of service provider, regulator and, to all intents and purposes, the country’s policymaker. The TCC’s multiple roles caused the sector considerable concern. As an operator, TCC competed with all other services and, as such, could not be expected to be an entirely impartial regulator when its own interests were involved. The potential for conflict of interest was obvious. Regulation of tariffs, competition, interconnection policy, conflict resolution, radio frequency allocation, management and monitoring of the spectrum and other regulatory duties were shared by a number of government organisations (i.e. Council of Ministries (COM), the Frequency Management Committee) and the TCC. They were not able to deal with these complex problems effectively and services such as cellular and data communications suffered. Re-Organisation The 1995 Telecommunications Law provided a legal basis for reform and established the independent Telecommunications Regulatory Commission (TRC). The creation of the TRC was a major step toward rationalising the sector’s regulatory environment. Four high commissioners who, together, regulate the market now control the TRC. Guided by the TRC, data communication services, public phone and mobile telephony services are now all provided by private sector. In 1997, in preparation for its privatisation, the TCC was transformed into a government-owned company, was renamed the Jordan Telecommunications Company (JTC) and began to operate on a commercial basis. As a private company, despite being state-owned, the JTC could now operate with a greater degree of financial, operative and administrative independence “Mobile phones have increased exponentially in the last couple of years, according to the latest counts. There are two GSM operators in Jordan, Fast Link and MobileCom, each of which now has more than one million subscribers. This, in a country with a population of 5 million people, gives a good indication of the speed with which this sector has developed.” Privatisation In 2000, following its privatisation plan, the Jordanian Government sold 40 per cent of the JTC to a France Telecom (32 per cent)/ Arab Bank (Jordan’s largest independent bank with 8 per cent) consortium for US$508 million. Jordan’s social security system now owns 8 per cent and 5.5 per cent is owned by a number of other shareholders. France Telecom was chosen by the government as a strategic partner to provide the company with much needed management skills, increase JTC’s efficiency, and hasten its modernisation. The results have been noticeable. The changes were made to Jordan’s local, national, and international switching systems. New ground stations for satellite communications were implemented, as were local area and wide area communication networks. Fibre optic technology was used to build the network’s backbone. Growth JTC’s development plans are aimed at maintaining the company’s leading position despite the expected liberalisation of the market. Accordingly, guided by France Telecom’s commercial vision, one that places much greater emphasis upon customer needs – a novelty for the region, the company began a drive to computerise all of its operations, especially its customer care and service operations. Today, the JTC is advertising for new telephone subscribers. In most areas, it takes, at most, one-week to install a telephone – quite different from the many-year-long wait list of ten years ago. “Currently, there are close to 70 thousand Internet subscribers, not counting government organisations, in the Kingdom. Although there are some twenty licenced ISPs (Internet service providers), only five of them are fully active and have an appreciable number of subscribers.” Mobile phones have increased exponentially in the last couple of years, according to the latest counts. There are two GSM operators in Jordan, Fast Link and MobileCom, each of which now has more than one million subscribers. This, in a country with a population of 5 million people, gives a good indication of the speed with which this sector has developed. Jordan’s fixed telephony sector has more than 700 thousand subscribers, double the penetration of five years ago. Currently, there are close to 70 thousand Internet subscribers, not counting government organisations, in the Kingdom. Although there are some twenty licenced ISPs (Internet service providers), only five of them are fully active and have an appreciable number of subscribers. As a result of the sector’s reorganisation and the growth of competition, there has been a dramatic and continuing reduction of the prices for many services. At the end of 2004, the market will be fully opened and the private sectors will be allowed to provide a full range of services. The government’s plans for the use of ICTs, though, were not restricted to the liberalisation of the telecommunications sector. The government has been at the forefront of efforts, having launched a number of programmes, to stimulate the use of ICTs. Jordan’s e-Initiatives The Jordanian Government, in cooperation with a wide range of national and international organisations and associations, has promoted a variety of e-initiatives. The following are among the more promising initiatives:  EBDA, or the ‘Electronic Business Development Activities’ programme, is an initiative to build ‘e-commerce awareness, dissemination, and business qualifications training’. It is aimed particularly at Jordan’s small and medium enterprise (SME) sector. The programme was initiated in 2000 and has trained 30 trainers – all highly qualified with previous technical and business experience. More than 5,000 people have already received e-commerce training under this programme. Special emphasis is placed upon breaking down the barriers to understanding, and to fostering the rapid uptake of electronic commerce by the Jordanian business community  The Jordan Connect programme aims to link high technology and other entrepreneurs with the resources they need to create new companies or help existing companies grow. Jordan Connect helps provide the money, supervision, technology, marketing strategies, management strategies, partners, legal aid and other needed support services  The Knowledge Station programme gives citisens from all segments of Jordanian society throughout the country access to ICT skills. Seventy-five stations have already been installed –- primarily in less developed, information poor areas throughout Jordan. The stations serve as a means for improving the social and economic conditions of the country’s citisens. There are plans to establish several more to comprehen-sively cover the Kingdom  The e-village pilot programme is an effort to integrate the activities of all national e-initiatives and projects into shared IT hubs known as e-villages. There, innovative IT projects can join forces, share best practices and lessons learnt and co-ordinate efforts. A model e-village, that can be tailored and replicated in other villages and cities in the region, will be created. The goal of the e-village programme is to build ITC skills and professional capacity to develop economic opportunities and create new job opportunities, including for women, in the IT sector  The Information Technology Association of Jordan’s initiative is aimed at helping the Jordanian software and ICT services industry in the global market. It has successfully worked for legislative reforms that provide foreign partners with a modern and competitive investment environment, and enable local companies to grow substantially in sise and exports. Jordan’s telecommuni-cations infrastructure is also being continuously upgraded, following its REACH initiative’s recommendations and provides all sectors with the communications platform essential to compete in the global e-economy.

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