Telecom and ICT Sector in Jordan

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>ICT Sector
>National ICT Strategy

ICT is an entire sector that is not shy about recognizing the essential role that King Abdullah II and Queen Rania have had in starting it off, and continuing to encourage it to become first in the region. Abdul Malik Al Jaber, CEO of Zain Jordan describes their roles this way: “Among the Arab countries, Jordan is ranked number one when it comes to competitiveness and openness.

It is among the most advanced markets when it comes to the available technology. We have a King who views telecom as an economic and social enabler which is very fortunate. As such, a lot of attention is being given to this sector….

The King has instructed the government to push the internet penetration and allow Jordanians to have access to the internet, as well as initiatives by the Queen focused on equipping schools with internet and introducing the E-curriculum. The whole mindset in the country is positive and friendly towards internet and this helps us.”

Marwan Jumaa, Minister of ICT, recounts the King’s effect on ICT from the time he assumed the throne in 1999, and presented his vision of ICT growth, because “it harnesses the only talent we have, which is human beings”:

Back in 1999 we only had 2 telecoms, one fixed operator and a mobile operator. The IT industry on its own was very small, very fragmented. The over all size was not more than half a million dollars. In terms of exports, we didn’t have any exports. Employment was about 4,000-5,000 as a whole. The vision was if you invest in people and you cater to the region you can eventually create industry….

This was the first time in the Middle East where the private sector took the lead…..After 10 years of work, the sector has now grown to about 2.2 billion dollars in size, of which 1.3 billion is in telecom and 900 million is in IT….Employment reached about 70,000 in the sector,

15,000 direct and 55,000 indirect jobs as a result of companies investing in their IT departments. Our exports came from 0 to about a quarter of a billion dollars. You have 4 mobile operators, you have multiple fixed line operators; you have broadband penetration increasing rapidly.”

The King also saw that ICT could be almost tax free, creating two special economic zones for it to grow and export customs-free to the region: Jordan Cyber City near Irgid, and Amman’s Internet City. As a result, says Jumaa, “A lot of companies are choosing Jordan because from Jordan you can easily export your solutions completely tax free;

there is zero taxation on all exports of ICT….We have special economic zones in which you can hire foreign labor and pay only 5% corporate income tax, zero customs and zero taxes on exports.”

And the result: “We have seen players like SYSCO, for example.

After 10 years of being in Jordan now, SYSCO’s technical global support center in Jordan is being rated as SYSCO’s leading in the world and employing all local expertise. Recently we’ve also had HP deciding to perform some of their regional operations out of Jordan. We are working with IBM hopefully to establish an IBM center in Jordan as well.“

“We in Jordan are fairly better than our neighbors,” says Fadi Kawar, Chairman and CEO of the Telecommunication Regulatory Commission (TRC).

“In 2005 there was a full liberalization of the telecom market….Now we have technology-neutral licensing…. We now enjoy reduced prices, competition, and freedom of the telecom sector to work as they wish. Our role now in TRC is monitor and ensure that there is fair play among the operators, and that consumer rights are protected.”

National ICT Strategy

All parties in Jordan give credit to King Abdullah II for his role in developing the ICT sector in Jordan to become the economic powerhouse it is. Upon his accession as king in 1999, he saw ICT as the sector that could be most fruitful in utilizing the talents of the Jordanian people.

That vision was expressed in the words: “It is time to widen the scope of our participation in the knowledge economy from being mere isolated islands on the periphery of progress, to becoming an oasis of technology that can offer the prospect of economies of scale for those who venture to invest in our young available talent.”

This resulted in the REACH initiative introduced in October 1999: a 5-point program to coordinate the regulatory framework, infrastructure, incentives, capital formation, and education for the purpose of creating a vibrant, export-oriented, and internationally competitive ICT sector. Much of the success of that initiative has been described above.

In 2007, the REACH strategy was updated to prescribe new goals to be met by 2011, and in 2010 that second stage plan is now in the process of being revised. Internet penetration which has risen from 7% in 2007 to 30% in 2010 is to be raised to 50% by the end of 2011.

To achieve higher penetration, a fiber optic network is being extended to all public schools. For the over-6000 annual graduates of IT education programs, the goal is to increase IT sector direct employment from the present 22,000 jobs to 35,000 jobs by the end of next year. IT sector total income is targeted to rise to $3bn by the end of 2011, from $2.2bn in 2009.

In summary, Jordan has a very vibrant and growing ICT sector, which is the result of the vision of a fully liberalized market nurtured by a growth-friendly regulatory scheme, a strong educational system, and focused capital expenditures designed to make Jordan a regional leader in ICT.