Monday, May 25, 2009

Jordan: 15% reductions in wholesale Internet connectivity costs from June 2009, expected to boost adoption

[Jordan Times] The Jordan Telecom Group (JTG) will reduce Internet Protocol (IP) connectivity costs for Internet Service Providers (ISP) by 15 per cent as of June 1, according to JTG CEO Mickael Ghossein.

End-users should expect a drop in Internet prices based on reductions by individual ISPs, he said, pointing out that the 15 per cent cut will decrease the cost of services to ISPs by 30 per cent.

IP connectivity represents a significant part of any ISP’s current costs.

The 15 per cent cut brings the total reduction since the beginning of 2007 to 70 per cent, Ghossein told reporters at a press conference on Thursday.

JTG, the country’s main IP connectivity provider, has a 50 per cent market share through Orange Internet.

Ghossein said the cut in IP connectivity prices is meant to enable ISPs to reduce prices for end-users and thus increase the number of people using the Internet.

Internet penetration currently stands at 26 per cent, according to Ministry of Information and Communications Technology figures, and the government seeks to increase it to 50 per cent by the end of 2011 through the implementation of the National ICT Strategy, which was launched in 2007.

"The cut gives ISPs a good margin to reduce their prices to end-users," said Jawad Abbasi, founder and chairman of Arab Advisers Group.

"It is also designed to increase the competitiveness of ADSL as there are alternatives to it now such as Wimax," Abbasi told The Jordan Times in a phone interview yesterday.

Meanwhile, JTG Wholesale Marketing Director Wesal Balasmeh noted that the group is connected to the Internet in Europe and North America through four physically separate routes, noting that a fifth "high" capacity route will be operational soon to back up the others.

"The fifth route will enable us to reduce prices further," Ghossein said, adding that when it is operational, ISPs are expected to increase the download capacities offered to their clients.

During the press conference, Ghossein said he expected a drop in telecom sector growth in 2009 in light of the global financial crisis and the competition in the market.

"Revenues of telecoms are decreasing in general and the growth in Internet does not make up for the decrease in telecom," he said.

Internet Protocol connectivity costs to drop by 15% as of June 1

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