Case Study: Syrian Boycott of Mobile Telecoms
In 2009, OpenNet Initiative deemed Syria to have the most heavily regulated and least-developed telecom system of the Middle East countries, and critics claimed that this regulation served to squash the competition that would have resulted in lower rates and enhanced services for the consumer. Further, the 38% mobile phone penetration rate lagged far behind the MENA region average of 75%, in large part due to the lack of incentive to expand to the rural regions of the country. Despite a population of nearly 2 million citizens, customers only had two options in terms of providers: privately owned Syrian-based Syriatel (which accounted for 55% of all users) and South African-based MTN Syria (which accounted for the remaining 45%). With the GDP per capita in 2009 remaining steady at $4700, the $50 a month 3G service subscription was too expensive for many citizens. Though $3.25 calling cards were also an option, they were set to disconnect 7 days after activation, forcing many users to pay for services they could not use.
The government-imposed tariffs (the highest in the region) requiring the providers to pay 50% of revenue to the state in part explained the high prices customers were forced to pay for service, but critics also voiced suspicions of corruption within the Syrian telecom industry. It’s worth noting that in 2008, the U.S. Treasury Department blacklisted Syriatel by adding the provider to its Specially Designated Nationals and Blocked Persons List. The Department asserted that Rami Makhluf – who owns the majority share of the telecom company – “uses his access to high-level Syrian Government insiders to enrich himself at the expense of the Syrian people.”
To learn how Syrians used Facebook and blogs to organize a boycott against the mobile telecoms, read our full case study: Syrian Boycott of Mobile Telecoms.