ICT sector revenues drop by 4% in 2013 — study

AMMAN — Revenues generated by the ICT sector in 2013 dropped by 4 per cent to $2.2 billion compared with $2.3 billion a year earlier, according to a recent survey.

Telecom revenues for 2013 declined by 6.4 per cent in 2013 to $1.582 billion compared to $1.691 billion in 2012, according to the 2013 ICT and IT Enabled Services (ITES) industry statistics’ survey conducted by the ICT Association of Jordan (int@j) and the ICT Ministry.

In spite of the drop in overall revenues, the IT sector registered positive growth in 2013, with revenues growing by 3 per cent to $638 million, compared with $617 million in 2012.

Of the total IT revenues, domestic revenue accounted for $313 million in 2013, registering a 1 per cent decline, compared to 2012.

IT exports grew by 8 per cent in 2013 to $324 million compared to $300 million in 2012, according to the survey.

Telecom sector employment declined by 384 jobs in 2013 to 4,212, while the IT sector created 277 new jobs, making the total 11,637.

The ministry and int@j differed over the reasons behind the drop in the telecom sector’s revenues, which caused the overall decline in 2013 revenues for the ICT sector. 

“The drop in telcos’ revenues and profits is due to the technological shift and the usage of some applications such as Viber and Whatsapp, which reduced people’s reliance on voice services… There are good and bad years for telecom operators,” ICT Minister Azzam Sleit told reporters on Wednesday. 

“They need to provide new convincing services for customers to increase their revenues,” he added.

“The drop in their revenues is part of a global trend. We cannot guarantee telcos a certain percentage of revenues or profits. This is life and there are ups and downs,” the minister noted.

Jawad Abbassi, chairman of int@j, agreed that the usage of some applications affected revenues of telecom operators, but said doubling the tax on mobile phone subscriptions from 12 per cent to 24 per cent and increasing the electricity tariffs played a key role in the decline of telecom companies’ revenues.

“After the tax, mobile users reduced their spending by around 7 per cent, which affected telcos’ revenues and profits,” Abbassi said.

Many lost their jobs due to the decline in revenues, and “even advertising companies were harmed” as telcos cut a lot of their spending, he noted.

Sleit said the ministry is currently conducting a study on the impact of raising the tax and is in the process of collecting figures from concerned entities such as the Income and Sales Tax Department.

The survey indicated 26 per cent of Jordan’s total ICT exports were to Saudi Arabia, followed by the US (21 per cent), Iraq (12 per cent), Nigeria (7 per cent), the UAE (6 per cent), the British Virgin Islands (5 per cent), Palestine (4 per cent), Qatar (2 per cent), Morocco (2 per cent) and Lebanon (1.5 per cent). 

The rest of the exports were distributed over 37 regional and international countries.

According to the survey, foreign direct investment registered in the sector in 2013 reached $2.4 million compared to $4.1 million in 2012.