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VoIP on the rise in Africa and the Middle East

Africa and the Middle East has the lowest adoption of VoIP in the world, despite demand for VoIP services, especially cheaper international calls. The low adoption rate is primarily due to government regulations that prevent operators from offering some or even all types of VoIP services. In some countries, such as the UAE, the restrictions on VoIP include a ban on VoIP traffic from websites such as Skype.

By the end of 2010, there were 4.8m VoIP subscriptions in the AME region. Although the overall adoption of VoIP in the AME region will remain lower than in other regions through the forecast period, Pyramid Research projects that AME VoIP subscribers will total about 16.5m by the end of 2015 — a growth rate that will outpace all other regions.

VoIP has become a major concern in the region, both for monopoly providers trying to maintain their control of the fixed market as well as for regulators trying to level the playing field while promoting market development, competition and access. There is a direct relationship between monopoly fixed-line markets and the prohibition of the VoIP telephony services to the public.

Pyramid Research expects VoIP lines in AME to more than triple through 2015, growing at a CAGR of more than 28%. This growth will be spurred by many factors, mainly the growth of broadband adoption, the liberalization of fixed-line markets and the elimination of regulatory hurdles. This Insider examines the current and forecast VoIP landscape in AME in terms of subscribers and revenue and then looks more closely at the factors that will enable this evolution of the service. Finally, we look at the market dynamics in Oman and the UAE. Oman’s second fixed-line licensee has decided to deploy a WiMAX network, as opposed to fixed copper network, and began offering fixed services through VoIP telephony services. In the UAE, where VoIP is currently illegal, we expect regulatory changes and thus project consumers to embrace VoIP as the country’s network expands as an all-fiber network.

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