Mobile phone use in Yemen is set to rise sharply following the launch in mid-February of two networks to rival the state's monopoly wireless operator.

Until now, wireless coverage in the Arabian Peninsula state has been extremely restricted.

Latest figures from the International Telecommunications Union (ITU) showed there were 27,700 mobile phone subscribers in Yemen at the end of 1999, equating to 0.16 handsets per 100 inhabitants.

"You would expect that to take off quite rapidly," ITU spokesman Piers Letcher told BBC News Online. He says continuous growth of 50-100% a year might be a realistic estimate.

But the two new service providers harbour even greater hopes. They are expecting to sign up as many as 160,000 users within one year.

Tough competition

Coverage will initially be focused on Sanaa, the capital, and a handful of Yemen's larger towns, before being extended elsewhere in the country.

The new operators are SabaFon, a venture of Egypt's Orascom Telecom, and SpaceTel, whose owners include Lebanon's Investcom and Oman's Al-Zubeir Group.

Orascom says it expects to attract 20,000 subscribers to its Yemen network within three-four months and a total of 60,000 after a year.

SpaceTel has said it will invest $70m this year in a network with capacity for 100,000 subscribers.

"The competition will be hard," Orascom's investments director Amani El Feky told BBC News Online.

Few fixed lines

The two GSM (global standard for mobiles) licences were awarded in May last year for $10m each to Orascom and Lebanon's Liban Cell.

The government later replaced Liban Cell with SpaceTel on the grounds that it could not fully implement its contract.

Initial plans called for the two operators to invest a total of about $180m-190m over 15 years.

Previously, mobile phones services were only available in Yemen through TeleYemen, a joint venture between the state and UK-based Cable & Wireless.

Penetration levels of fixed-line telephones are also very low in Yemen.

According to the ITU, Yemen had 291,000 fixed lines at the end of 1999, or 1.7 per 100 inhabitants.