Strategies to transform Jordan into a digital economy and leading ICT regional centre

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Holding the potential to become a major economic growth driver, Jordan’s ICT sector has seen decades of robust telecoms expansion and a liberalisation agenda launched in the early 2000s, supporting rapid growth in mobile penetration and internet usage.

Jordan is slated to benefit from rising next-generation mobile broadband adoption, while its broader ICT sector has been the focus of a series of recent government reforms aimed at supporting macroeconomic growth, with new lending programmes and multiple tax incentives supporting tech firms and IT service providers.

The same cannot be said for telecommunications operators, which face one of the world’s highest sector-specific tax burdens, with ongoing government efforts to accelerate fiscal consolidation remaining a cause for concern among stakeholders.

Recent sector development strategies have identified multiple ICT business lines offering considerable private sector investment opportunities, with the ongoing e-government services and digitisation drive expected to support private sector growth, enabling sustainable long-term development and the eventual transformation into a knowledge-based economy.

Public Oversight 

Jordan’s ICT sector is dynamic, liberalised and well developed, with telecoms activity dating back to 1921, and the kingdom’s first dedicated telecoms operator, the Telecommunications Corporation, established 50 years later in 1971.

The Ministry of Information and Communications Technology (MICT) and the Telecommunications Regulatory Commission (TRC) are the main government bodies overseeing ICT development. The MICT is in charge of developing sector policies and legislation, increasing investment in the IT and postal sectors, and delivering the government’s national broadband network (NBN), as well as creating and supporting deployment of e-government services. Operating under the aegis of the MICT, the National Information Technology Centre (NITC) was established in 2003, and acts as an executive authority for all public procurement of IT resources, including equipment, software, information, operations and human resources training. The TRC was formed under Telecommunications Law No. 13 of 1995, and acts as an independent jurisdictional body responsible for regulating the telecoms and ICT sector, as well as the postal sector. It also responsible for overseeing mobile operator licensing and spectrum allocation.

A wave of liberalisation reforms launched in 1999, and concurrent adoption of progressive ICT development policies, saw the creation of the Information Technology Association of Jordan (int@j), which plays a supportive role in the formation of national ICT strategies, data collection and industry lobbying: as well as Oasis500, a government-backed entrepreneur support organisation that has grown to become one of the largest start-up seed investors in the region.

Private Sector

Liberalisation between 1999 and 2004 also permitted private sector investment in telecoms services for the first time, with the Telecommunications Corporation – now operating as the Jordan Telecom Group (JTG) – privatised in phases ending in 2000, with the government holding a 30% stake today, and the remainder owned by France’s Orange. JTG is branded as Orange Jordan and stands as the kingdom’s second-largest mobile operator with a 31% market share. The only integrated operator offering fixed, mobile, wholesale and internet services. The firm listed on the Amman Stock Exchange in 2002.

Orange is one of three mobile operators active in the market. Zain Jordan is the largest by market share, with 40%, and was the first firm to introduce GSM mobile services in 1995, following the entrance of Kuwait’s Zain Group the previous year. Rounding out the big three is Umniah, a subsidiary of Bahrain’s Batelco. It was the last to enter the market, launching operations in 2005.

Jordan is also home to 16 internet service providers, although Orange maintains a monopoly on international gateway and local landline services, and all providers use the company’s copper network to attain last-mile connectivity, especially for ADSL services. Orange launched fibre-to-the-home internet services in October 2014, followed by Zain in November 2014. In February 2017 the US International Trade Administration (ITA) noted that there were 600 active technology firms operating in Jordan, of which 300 are start-ups.

Economic Impact 

The ICT sector represented 4% of GDP in 2016, according to the Department of Statistics, although mobile operators reported in February 2017 that the telecoms sector alone accounts for 14% of GDP annually. In its 2016 annual report, the TRC reported average annual investment in the telecommunications sector of JD185m ($261m) between 2012 and 2016, with a recent high of JD290m ($409.1m) in 2015, falling to JD95m ($134m) in 2016.  Jordan’s ICT market – like many of its regional neighbours – has undergone a rapid shift towards data service usage over traditional voice and SMS services, supported by equally swift mobile broadband network expansion, which has had a large impact on internet usage since 2014. According to the ITA, estimated internet penetration stood at 85% by the end of 2017, up from 62.3% the previous year.

Mobile Broadband Expansion 

Orange Jordan was the first operator to receive a 3G licence, paying $71m to acquire 3G spectrum in 2009. The company was granted exclusive rights to 3G deployment from March 2010 to March 2011. Zain became the first operator to secure a 4G licence in April 2014, at a cost of $76.75m. Its commercial 4G LTE network went live in February 2015, while Orange Jordan acquired a $100m 4G licence using spectrum on the 1800-MHz frequency, and launched services in May 2015. Umniah secured a 4G licence in September 2015, and commenced 4G LTE services in June of the following year.

Although the TRC floated a bid offering new spectrum allocations in June 2013, paving the way for the entrance of a fourth mobile operator and fixed-broadband wireless access provider on the 800-MHz, 1800-Mhz, 2100-MHz, 2300-MHz and 2600-MHz frequencies, a new operator was not selected.

Advancements in mobile technology have helped spur a rapid uptake of services. Telecoms research firm BuddeCom notes that there were 14.7m mobile phone subscribers in Jordan in 2017, compared with 11m in 2014, while fixed-line subscribers fell from 370,000 to 350,000 over the same period. Broadband subscribership rose by 170% between 2014 and 2017 to 4.1m, and BuddeCom states that 4G penetration could reach 70% by 2020, with 3G penetration standing at 70% in 2017.

Sector Strategies 

Jordan’s mid- and long-term ICT development targets are encapsulated in the MICT’s National ICT Strategy (NIS), spanning 2013-17; an e-government strategy running from 2014 to 2016; and the REACH2025 national ICT development and digitisation strategy, successor to the NIS, which runs until 2025.

REACH2025 targets transforming Jordan into a regional IT centre, recommending reforms including improved access to finance, investor incentives and tax exemptions, many of which have been adopted recently. It targets boosting ICT development to contribute an additional 3-4% to GDP, increasing sector revenues by between 25% and 30%, creating 130,000 to 150,000 new jobs and establishing between 5000 and 7000 new businesses active in the digital economy.

The plan’s core elements include smart specialisation and growth, public sector innovation, start-up and entrepreneurship support, skills development, improvements to the business environment and the creation of smart digital infrastructure.


REACH2025 was incorporated into the government’s mid-term economic development agenda, the Jordan Economic Growth Plan (JEGP), which was published in mid-2017 and runs from 2018 to 2022. The JEGP aims to support 12% annual expansion in the ICT sector over the period, as part of a broader effort to boost GDP growth to a yearly average of 5% through 2022, against an average of 2.5% between 2010 and 2016, with the World Bank forecasting this figure to stand at 2.3% in 2017 (see Economy chapter).

The plan highlights 85 government projects valued at $8.8bn, and 27 private sector-led investment projects worth $13.3bn, as necessary to meet this target, with its digitisation budget estimated at JD430m ($606.6m).

The JEGP maintains REACH2025’s 96 identified action items to foster ICT development in support of six broad targets: promoting the use of technology through digital policymaking; adopting open data and security and information protection policies; permitting private sector investment in delivering local knowledge stations and upgrading post offices; reducing the use of paper in government institutions; attracting new investment across the ICT sector; and establishing a national digitisation policy. The total budget for these initiatives is expected to be JD175m ($246.9m).

Private Sector Participation 

Private sector investment plays a critical role in recent ICT policies: the NIS recommends an “aggressive” re-examination of current e-government initiatives, with the aim of identifying new modalities to attract private sector investment in developing and managing e-government services, while the JEGP reports that public-private partnerships (PPPs) will be essential for rehabilitating post offices and launching knowledge stations, which will provide financial and social support, and a range of e-commerce and e-government services.

The JEGP also targets a periodic review of the telecoms tax system, as well as reviews of operators’ profit-sharing models, allowing them to capitalise on shifting consumer trends, including increased data usage and falling voice and SMS usage. The plan encourages PPPs with foreign firms under a build-operate-transfer model, with an emphasis on attracting investment in mobile applications and emerging technologies serving the banking, e-commerce and transportation sectors.

Broadband Potential 

Private investment opportunities could also be on offer in the JD115m ($162.2m) NBN. The NIS reports that the country’s broadband network, which was originally launched in 2003 as a private governmental network to expand online education, health and public service delivery, has not been completed as a result of fiscal constraints.

Although the NBN is meant to act as a tool to enhance the development and competitiveness of local ICT firms in online service delivery, the network’s required investment cannot be provided through public funding alone. The NIS notes that the creation of large-scale demand and usage of e-government services is necessary to make private investment in the NBN economically feasible, reporting that partial or complete handover to the private sector will reduce or eliminate the government’s operational costs, while providing a potentially attractive opportunity to private investors.

Infrastructure Investment 

The ITA reports that the government signed a contract to implement a sizeable part of the network’s southern component in May 2015. This was expected to be up and running by the end of 2017, connecting over 800 public entities across three cities at a total cost of $31m, although the network’s launch had not been confirmed at the time of press. The central portion of the network will receive support from the Saudi Fund for Development, with the ITA highlighting the NBN as a significant target for future external investment.

According to the ITA, internet infrastructure works associated with the Port of Aqaba’s relocation also hold major potential for private firms to boost their ICT share in Jordan. Outside of the NBN and physical internet infrastructure, the ITA forecasts future ICT investment will be driven by technology and start-up firms developing applications targeting early internet adopters, with e-payment systems offering particular opportunities for growth. The government has also been active in developing e-payment infrastructure, with the ITA reporting that recent initiatives have coincided with MasterCard’s deployment of near-field communications mobile payment terminals across the kingdom.


E-government services have become an important component of ICT growth, and the JEGP notes that expanding application of e-government services will support improvements to the kingdom’s business and investment climate, with e-government services expanding rapidly over the previous decade, rising from 15 online services in 2003 to 125 in 2016.

One of the largest e-government initiatives introduced in recent years is the eFawateerCom system, an e-payment platform owned by the Central Bank of Jordan (CBJ) and operated by MadfooatCom Electronic Payments. Launched in 2014, the system allows users to pay bills through ATMs, bank tellers, mobile and online banking platforms, and post offices, as well as major retail centres, and also permits credit card payments. The government reports that in a period of just under three years since its launch, more than 3m transactions valued at JD1bn ($1.4bn) have been carried out using eFawateerCom, with 87 separate billers offering a total of 255 services (see Financial Services chapter).

In October 2017, following its launch in May of the previous year, the Ministry of Education (MoE) announced the completion of a national project to link almost 3000 of Jordan’s state schools and the MoE on an integrated IT network. The project, carried out by Umniah, is the result of an agreement between the MoE and the Special Communications Commission set to benefit connectivity, data sharing and additional application capabilities between 2652 schools, 43 directorates and 69 administrative buildings.

Other e-government services have sought to eliminate red tape and reduce the time it takes to set up a company in the kingdom, in support of ongoing reforms aimed at improving Jordan’s business climate, as well as new service platforms in the health care, education and transportation sectors (see analysis).

Smart ID Cards

A national e-ID card system, launched in July 2016, is also expected to streamline civil identification processes and reduce ministries’ operational costs. In early 2018 Jordan’s Civil Status and Passports Department noted 3m new e-IDs, or smart ID cards, had been issued since June 2016, with the agency stating its long-term target of replacing all civil identification documents with e-IDs.

Dutch firm Gemalto, a private tech company selected to issue the kingdom’s national e-ID cards, reported in June 2017 that the new cards will be formatted similar to credit cards and contain a microchip. They will be issued to any citizen over 18 years old at a cost of JD2 ($2.82). In addition, the new cards will eventually contain 18 data fields, with early cards including gender, name in Arabic and English, place of birth, area of residence and blood type. Later stages of development will integrate driving licence data, health insurance coverage and social security number information into the cards, as well as fingerprints and electronic signatures.

Private e-service development is also poised for robust future growth, with the relatively undeveloped financial technology (fintech) sector holding particularly high potential given the high proportion of unbanked citizens. In August 2017 private sector think tank Jordan Strategy Forum reported that the financial inclusion rate, which measures the proportion of citizens over 15 years of age who have a bank account, is 24.6%, and just 15.5% for females over 15 years of age. This leaves substantial room for so-called disruptive fintech technologies including mobile banking and mobile money transfers, especially given the high level of remittance inflows the kingdom records each year, with personal remittance inflows amounting to 13.3% of GDP in 2016, according to World Bank data.

A March 2016 report in online publication Cryptocoin News showed that several fintech businesses such as Emerging Markets Payments, GreenWallet and MadfooatCom are already offering mobile financial services in Jordan, while PayFellow and Middle East Payment Services are active in secure e-payment processing. Peerto-peer (P2P) lending platforms, including Islamic P2P lending start-up liwwa, also offer alternative financing channels for small businesses and entrepreneurs, further supporting improved financial inclusion.

Mobile Money 

Mobile payment growth, meanwhile, is supported by a progressive regulatory environment, with the CBJ moving to publish mobile payment services instructions in December 2013 as part of a three-year payment systems strategy. The strategy is designed to improve financial inclusion, stability, integrity and consumer protection, with the CBJ introducing the instructions as part of an effort to encourage mobile operators to play a larger role in financial service provision. The instructions permit operators to become payment service providers (PSPs) offering direct mobile money services via the establishment of a subsidiary to carry out these activities with a minimum paid-up capital of JD1.5m ($2.1m). The framework also allows PSPs to register new customers, in addition to providing cash-in and cash-out services.


In a December 2016 case study on mobile money in Jordan, the GSM Association (GSMA) reported that further reforms to enable interoperability through the CBJ’s central switch, JoMoPay, put Jordan at the forefront of regional financial inclusion efforts, as it is the first country in the MENA region to launch an interoperable mobile money system. Umniah, Zain and Orange have each launched mobile money offerings in recent years. The segment holds high potential to augment telecoms revenues in the coming years, with growth forecast to be supported by rapid smartphone and mobile broadband adoption.

IT Taxes

IT companies benefit from one of the most favourable tax environments in Jordan, after the government moved in April 2016 to adopt a host of new tax incentives. These include sales tax and Custom duty exemptions for all software development, mobile application, website portal, outsourcing, digital content and electronic games services, as well as IT training and e-learning. In addition, goods and services required for IT service provision were exempted from sales tax, while the government also unveiled plans to reduce the sector’s tax rates from 20% to 5%. IT export taxes were also eliminated. Other recent reforms have removed all minimum capital requirements for foreign investment in the IT sector, as well as trade licence rules that had prevented tech start-ups from operating home offices, and which have been a challenge to start-up growth in the kingdom. Working on attracting new investors is of course a great move,” Nader S Nemeh, general manager of local consultancy Migrate Business Services, told OBG. “However, public authorities should focus more on retaining the investors who are already present in Jordan by reducing regulatory changes, delays in announcements and uncertainty,” he added.

Start-up Lending 

The government is moving to boost credit access for technology companies and start-ups, as part of a broader strategy to improve lending to small and medium-sized enterprises (SMEs). In March 2017 the CBJ announced plans to launch a $100m entrepreneurship lending fund, the Innovative Start-ups and SME Fund (ISSF), in partnership with the World Bank. The World Bank will provide $50m of financing for the project, which was officially launched in June 2017 (see Financial Services chapter).

The fund is expected to improve financing for early-stage SMEs that have shown the potential to become “engines for job creation”, with authorities targeting provision of 200 loans to innovative start-ups nationwide, emphasising underserved industries and female entrepreneurs. The World Bank reports that investment will be split between companies at three separate stages of development, including seed, early stage and venture capital. Priority borrowers under the ISSF programme include tech-focused media, telecoms, services, agricultural, pharmaceuticals, water and green energy companies. “We are very excited, and we hope the fund will make a significant impact in ICT growth,” Nidal Bitar, CEO of int@j, told OBG. “If we evaluate projects’ borrowing eligibility based only on financials, it is not enough to support start-ups and entrepreneurship. We need to examine the issue from an innovative and technical perspective as well, looking at comprehensive, long-term benefits of supporting young companies, towards making Jordan a major regional start-up hub.”

One of the main recommendations under the REACH2025 strategy is the 1000 Entrepreneurs National Initiative, led by int@j and the MITC. The programme seeks to support new technology firms by transferring innovative ideas to 3000 new digital economy start-ups and SMEs, to provide development support to existing firms, and to create 5000 jobs.

Telecoms Taxes 

Telecoms operators face a more challenging situation, having experienced years of successive tax increases beginning in July 2012 when the TRC announced plans to raise the industry’s taxes, doubling revenue-sharing tax rates from 10% to 20%. The sector was already subject to a 16% sales tax and a 12% mobile subscription tax, and all operators pay a 24% income tax rate. The new framework has been in effect since August 2013. Telecoms operators reported in January 2014 that revenues had fallen by 9%, and profits by between 30% and 40% as a result. In May 2015 Deloitte reported that Jordan has some of the highest mobile taxes internationally, with taxes comprising over 35% of the total cost of mobile ownership. In addition, the special tax on prepaid and post-paid mobile subscriptions also increased from 24% to 26%.

In February 2017 local media noted widespread criticism of plans to hike telecoms taxes again, as part of the government’s IMF-supported fiscal rationalisation agenda, which required the kingdom to source JD635m ($895.8m) of new revenue in 2017 alone (see Economy chapter). Fiscal reforms saw a host of tax increases rolled out following the conclusion of a $723m three-year extended fund facility with the IMF in August 2016. These included scrapping tax exemptions for fixed- and mobile internet services, effectively doubling the tax rate for these services to 16%, as well as a JD2.60 ($3.67) tax charged on the purchase of every pre- and post-paid SIM card, as of February 15, 2017.

Though full-year figures were not available at the time of press, in July 2017 the Ministry of Finance reported it was still JD400m ($564.3m) short of its annual revenue collection target, which prompted fears of similar tax increases applied to technology companies and IT service providers. “We believe the tax reduction and incentives applied to the ICT sector are a must, because the ICT sector is the core of all other sectors,” Bitar told OBG. “Over the past few years, we’ve had unstable and unpredictable regulations and policies. Companies left because of this instability, as well as what were sometimes inconsistent interpretations of these regulations by those who implement them. Therefore, the priority now must be to incentivise the sector, which should contribute to digitising the economy and boosting entrepreneurship according to the recommendations of REACH2025.”


Although telecoms operators will face challenging conditions in 2018, Jordan’s digital economic development continues to progress steadily. The government cannot meet its ICT development goals without private sector investment, and investors are thus expected to make major inroads in ICT development in the coming years, with new investment expected in the e-government and fintech sectors, and digital infrastructure development. Ongoing fiscal rationalisation programmes present the greatest challenge to future growth, but recent policy announcements and new lending programmes otherwise leave the sector well positioned to become a critical pillar of future growth.

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