Contents :
In most countries, the telecommunications sector was traditionallyowned and operated by a state entity and regulated by a ministerial departmentor agency. In countries with market economies, the main argument provided forsuch an arrangement was that the sector was a natural monopoly. As such, andconsidering the magnitude of telecommunications revenues, most governmentschose to own the telecommunications operator rather than allow a private firmto run the sector and regulate its activities.
However, a number of developments that took place over the lasttwo decades have led to major reforms in the telecommunications sector acrossthe world. In developed countries, several sectors were deregulated andliberalized. In developing countries, macroeconomic reforms were broad-basedand included infrastructure. This liberalization was driven by the need toenlarge the customer base and improve the quality of services provided in acontext of limited government resources. Furthermore, rapid technologicalinnovations in telecommunications have facilitated private sector participation.Izaguirre (1999) reports that more than 90 developing countries haveliberalized their telecommunications sector and opened it up to privateparticipation over the period 1990-1998, which resulted in transactionsamounting to 214 billion U.S. dollars. In addition, the World TradeOrganization (WTO) agreement on trade in basic telecommunications servicesreached by 69 countries in 1997 was expected to lead to further liberalizationof the sector worldwide.
Historically, the structure of the telecommunications sector inmost Arab countries was similar to that of other developing countries; that is,the state was both the operator and the regulator of the sector. The tablespresented in the appendix at the end of the paper provide some telecommunicationsindicators for a large number of Arab countries. From the figures in thetables, it shows that the level of development of the telecommunications sectoris not similar across Arab countries. For instance, telecommunications densityranges from 0.60 in Sudanto 33.19 in the United Arab Emirates (UAE) in 1999. In the same year, the sizeof investments in the sector ranges from 3 million U.S. dollars in Mauritania to565 million U.S. dollars in the UAE.
In recent years, Arab countries have followed theworld trend in telecommunications which consisted of liberalizing andprivatizing the sector. The objective of this paper is to provide an overviewof the privatization efforts undertaken by Arab countries in thetelecommunications sector. The discussion will be limited to telephoneservices, both fixed and mobile. In this respect, Arab countries can beclassified into three main groups: countries in which the government providesboth fixed and mobile telephone services (fixed public - mobile public); countriesin which the government provides fixed services but in which the private sectorprovides mobile services (fixed public - mobile private); and countries inwhich the private sector is involved in both fixed and mobile services (fixedprivatized - mobile private). Although this classification does not exactlyreflect the various ownership combinations encountered in thetelecommunications sector across Arab countries, it does serve the purpose ofthe present paper.