Jawad Abassi is the Founder & General Manager of Arab Advisors Group, a regional research firm that specializes in surveying the media and telecommunications markets of the Middle East. Arab Advisors also organzies the pioneering Media & Telecom Convergence Conference.

Q. Kindly introduce yourself and Arab Advisors Group.
A. I have a bachelor’s degree in engineering from the American University of Cairo and a master’s degree in information systems from the London School of Economics. I worked in IT and then in the telecommunications research field. We started Arab Advisors back in 2001. Before that, I had spent three to four years in the ICT and telecom research industries, two of these were in Boston with two companies.

Arab Advisors Group started with the mission of researching, analyzing and presenting reliable information on the telecommunications and technology markets in the Arab world. Later on, we moved on to the broadcast media markets, particularly because of the convergence that is on the way between the content side, broadcast side and the telecom side. After we secured our partnership with the Arab Jordan Investment bank in 2005, we also moved into financial markets research and consulting and equity research. Arab Advisors now has a team of 24 analysts, based in Amman-Jordan.

Q. Tell us about the demand for research and market information covering the Middle East, and how your business has grown with the region.
A. I believe that any economic sector that has competition, that has competing vendors in that sector as well as multiple operators and more liberalization and privatization, needs research.

All of these forces create the demand for objective, independent and reliable research that businesses can use especially when the market became competitive, operators no longer disclosed all the information. So, to research the market you have to benchmark, to rely on surveys and that’s why we have seen a rapid increase in the demand for our services, since we started in 2001. When we started, very few of the Arab world countries had been liberalized, but by now almost all of the 19 Arab countries are competitive telecommunication markets either in the cellular, Internet or fixed segments.

Q. What's your view regarding the impact of the global economic recession on the region's telecommunications industry?
A. The Middle East at large is not a very homogeneous region when it comes to ICT. You have countries like Bahrain, Qatar, Saudi Arabia, UAE and Kuwait, and to a lesser extent Oman, where the penetration of ICT services especially the Internet and Cellular field, is on par and even higher than advanced economies such as Western Europe, South East Asia or North America. Then you have other markets, where the demand is much lower such as Yemen, Sudan, Somalia and Mauritania, largely because there is a lot of poverty and a significantly less education and therefore that inhibits the demand for broadcast. Of course, then you have the middle countries such as Tunisia, Egypt, Syria and Jordan. The general feel is that there are drastic improvements in the cellular markets across the region.

The telecommunications industry will be one of the more resilient sectors, but that does not mean it will not be affected. On the negative side, new licenses are offered and new green field operators will probably find it a bit more difficult to find financing from international investors because everybody has now become more cautious towards new operators.

On the positive side, many operators in the region are hugely profitable and have a very nice cash flow generation. Because of that, the economic crisis could be a chance for them to go beyond the region acquiring head operators in, for example, central Europe, Africa, or South East Asia; given the fact that, as the credit crunch continues, they will have less competition acquiring these licenses. If the economy slows down, usually that also affects the telecommunications sector to a little extent, but in economic downturns business demands for telecom services sometimes increase. People travel less and do a lot more phone conferences or communicate by technology rather than by travel. The corporate sector’s demand for services is very inelastic compared to the retail sector for telecom services. If there is a deep economic downturn they will cut back. Fortunately, so far in the Arab world, there isn’t a deep economic downturn except for maybe in the UAE where even Etisalat is expecting some reduction in the total population, which will affect the demand for telecom services.

Q. Arab Advisors organizes a Media & Telecom Convergence Conference every year, tell us about the goals of this event and what you have in store this year.
A. We are very glad that the event has become very popular in the region. After covering both the telecommunications and the media industry and realizing how the telecom sector was increasingly focused on Value Added Services and content for the subscribers and how the media organizations have started using the telecommunications industry for interactivity with their audiences; we found that the media & telecom convergence was a hot topic and we needed a forum for the major media and telecom players to come together, network and discuss issues relevant to convergence.

So basically, it is a major networking event where ongoing issues are discussed. We are very happy to have the continued presence of the many delegates from many countries in the world and Jordan.

Q. What, in your view, are the main obstacles to further telecom and media growth in the Arab region?
A. It used to be regulations but not anymore, especially in the telecom field where liberalization is present. Whenever you see liberalization of the broadcast industry, you will also see immediate mushrooming of broadcasters, such as Jordan or Palestine FM radio stations.

I think, in the media scene, what inhibits certain segments are regulations. The ones that are not regulated such as the free-to-air satellite TV channels. By last count, these were 470 up from 370 a year and a half ago. Basically, everybody wants to broadcast but the problem is not many people watch these channels. We have the 10-90 rule where 90% of the audience is watching 10% of the channels and the rest of the channels are competing for the remaining 10% of the audience.

For more information, visit Arab Advisors Group.