18 Regulatory restrictions on VOIP are widespread in the Middle


East but the constraints have only partially held back the trend toward greater VOIP use. Written by Matt Reed


Regulatory restrictions fail to halt MEA VoIP growth


• Regulatory restrictions on VoIP are wide- spread in the Middle East and Africa.


• Despite the legal restrictions and uncer- tainty, the use of VoIP is growing strongly.


• Factors propelling the use of VoIP include the increased use of smartphones and broadband networks in substantial parts of the region. In much of the Middle East and Africa, the


prospects for VoIP services are constrained by restrictions imposed by regulators and operators. But the use of VoIP services in the region


is growing, driven by factors such as the in- creasing availability and use of VoIP-capable devices, such as smartphones, as well as fixed and mobile broadband networks. Consumer demand is another factor: In


markets such as those in the GCC states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), each of which has large expatriate populations, many people want to use VoIP services for international calling in order to avoid the high cost of conventional international calls.


But local operators are reluctant to forego


those international-call revenues and pre- sent arguments against allowing VoIP, such as the claim that the loss of international- call revenues would threaten their ability to invest in new technology and network expansion. Governments and regulators in the region


are often sympathetic to these arguments, not least because substantial state invest- ment in local operators means that an apparent threat to the revenues of these op- erators is seen as also representing a threat to state assets and royalty earnings. Governments are also often eager to


use operators as tools for implementing national development plans, so they are sensitive to the operator’s arguments that competition from VoIP providers will force them to cut back on their investment in new networks. Specialist VoIP providers such as Skype are seen by some in the region as foreign players that threaten local companies and will take revenues out of the country. »


Middle East Market Review | November 2011


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