5 Sep 2008

Millicom CEO: scale is not the key in Latin America, Africa

During the long run-in to next week's Americas Com conference in Rio de Janeiro, I naturally look fairly closely at the competitive landscape in most the countries of Latin America. In the mobile space, this can be summarised in many markets as a battle between varying combinations of three companies. Two of these are telecoms giants - America Movil and Telefonica. The third is a smaller business headquartered in Luxembourg, Millicom International Cellular.

Millicom, whose services across Latin America are branded Tigo, is present in El Salvador and Guatemala and Honduras, where its local operations are market leaders. In South America, the company is present in Bolivia, Colombia. and Paraguay. Millicom has the largest market share only in the last of these three South American markets.

Earlier this week, in an interview with Investor's Business Daily, Millicom CEO Marc Beuls denied that larger competitors enjoy overwhelming competitive advantages: "Size isn't a reason for any of our competitors to be more successful in these markets than us. In Latin America, we compete against two giants, America Movil and Telefonica. This industry has more to do with innovation and launching new products and services, not so much technology, because much of that is the same among operators."

Having visited two Tigo-branded cellcos' HQs back in April (in Paraguay and Bolivia), I was disappointed not to have secured the participation of either for next week's conference. Frankly, across the group (in Latin America, Africa and SE Asia) we find Millicom subsidiaries to be a little wary of speaking or otherwise having a very visible presence at our conferences. We hope to resolve that in 2009.
Beuls says that "it was only three years ago that we started focusing on Africa and began investing substantial amounts of money. We've been able to improve our market position in most markets, the only exception being Sierra Leone. In Ghana, our largest market in revenue, we're No. 2 out of four operators. We're No. 3 in Tanzania, with 22% share, and gaining ground on the two largest operators."
Noting Vodafone's move on the Ghanaian market, the interviewer asked Beuls whether bigger operators have an edge because they can purchase mobile phones in large volumes and sell them in retail stores priced as low as $20. Beuls responds: "We don't play the handset game. We don't sell any handsets in Africa. The handset supply is there. A lot of the phones you find at (retail) dealers are second-hand, used phones. You can get a mobile phone at any price, a used one for $10 or a new one for $200. There is no need to get involved in that part of the market, whereas in Latin America operators are involved in the phone business."
Buels was asked whether bigger groups enjoyed advantages around roaming. Zain's promotion of services across national boundaries was mentioned, something which is now more relevant for Millicom given the Kuwaiti-headquartered cellco's presence in some 15 African countries.

Beuls argues that in the prepaid segment in Africa there is not much value in roaming: "Those customers are not mobile, they're not traveling. Maybe they're going from town to town, but not out of the country."
I am not closely involved in our Africa-specific events. These are managed by my colleague Julie Rey. However, I am close enough to the action to say confidently that October's Africa Com conference in Cape Town looks set to be bigger, busier and more exciting than ever. I daresay some of the questions mulled over this week by Millicom's Beuls will be discussed on stage and offline at the event.

4 Sep 2008

Bahraini WiMAX-er signs up for our Middle East speaker panel

Today I received the welcome news that MENA Telecom are to be represented at a high level on the panel of speakers at our December Middle East region telecoms conference/exhibition in Dubai. So I look forward to meeting the company's Deputy CEO Mr Laith Sadiq when we assemble the great and the good of the region's burgeoning telecoms sector.

When working out what to feature on this year's conference agenda, we got mixed reviews about the business case for WiMAX in the Middle East, with answers varying widely across markets and across the types of telecoms service provider with which we were having conversations. So it seems that there continues to be a live debate about the prospects for WiMAX technology in the region. With this in mind, we are sure that MENA Telecom will be a very useful contributor to the discussions. The Bahrain Tribune reported in July that the company was busily adding friendly user accounts during the testing phase of its new WiMAX 802.16e network. A full nationwide lauch is "on the horizon" according to the report.

Something I am not clear about is whether the company plans to enter the mobile services arena. Back in January, Informa Telecoms & Media's fortnightly research service 'Middle East and Africa Wireless Analyst' reported that the Bahraini Telecoms Regulatory Authority was considering whether to license a third mobile operator. The MEAWA story reported TWA frustration with relatively limited price and service competition. The small Gulf state's two current mobile players are the mobile arm of incumbent operator Batelco and the local subsidiary of the Zain group.

In the article, MEAWA's Matthew Reed speculated that Vodafone, which won the contest for Qatar's second mobile license might also be interested in Bahrain. Reed noted that both "both countries offer high ARPUs, have aggressive economic-development plans and are located in the strategically significant Gulf, midway between Vodafone operations in Egypt, Turkey and India."

I don't know how much signifance to attribute to the fact that one of the very first speakers to confirm his participation at our December conference was Hatem Dowidar, Vodafone's CEO of the Partner Markets area of the business. If the nature and extent of the giant global cellco's interest in the Gulf markets is unclear by December, I daresay some conference participants will ask Mr Dowidar for his opinion.

Reed also noted that Saudi Telecom, which had earlier won the another recent Gulf license contest, for the third operator in Kuwait, migth have Bahrain in its sights. However, Reed went on to note that "another option would be to remove the mobility restriction on fixed-wireless licenses, of which the TRA has issued two." The licensees? Mena Telecom and Zain. I really couldn't say how seriously this option is being considered now by the Bahrain TRA. Again, if this notion has any substance to it, I'd guess that some delegates at our event will attempt to probe MENA Telecom's Sadiq in Q&A sessions and/or offline during the many networking breaks.

Whatever happens in Bahrain between now and December, I am really pleased to have secured the participation of Mr Sadiq. Our event has rejoiced in the name GSM>3G Middle East for some years - and was known as GSM Middle East before that. We really need to think more broadly than that as network standards, services and business units converge everywhere, making the old fixed/mobile distinction fuzzier and fuzzier with each moment that passes.

3 Sep 2008

LinkedIn: I'm a believer

Those of you who have not yet joined LinkedIn.com - I really urge you to do so. I can't overstate how useful it is in terms of keeping track of existing, valuable contacts as they move from job to job and country to country. Also, by establishing a presence on the site and offering something of value, any LinkedIn member can attract new contacts and new business opportunities.

Some weeks ago, I set up geography-specific networking groups associated with each of the Com World Series telecoms sector conferences of which I am the manager. So, I am now the 'owner' of networking and discussion groups for telecoms execs in the following regions:

Having set these up, and focussing on the two regions (CEE and Americas) whose conferences were coming up soonest, I invited existing contacts to join. I am now attempting to stimulate useful discussion in these two groups - with some success in the case of the CEE group, where I posed a question about the growth prospects of DSL in the region.

The effect is viral. These two particular groups are now growing strongly, but not because of me taking the time to send out numerous further invitations to join. Instead, some of the new members (I guess well-liked, influential individuals) seem to attract further new members very quickly. Scenario: a high-placed exec from a Southeast European telco joins the group. Within days, colleagues from many parts of that company join our group and enjoy the networking and discussion opportunities offered.

Today I enjoyed one of the real benefits of all this. Back in June, I hosted our Russia & CIS Com conference in Moscow. One of the most compelling speakers was the then-General Director of Ukrainian CDMA operator PEOPLEnet. Given that the event had previously been branded GSM>3G Russia/CIS, and that we were keen to broaden the appeal very considerably beyond the GSM MNO space, PEOPLEnet was precisely the kind of business we wanted to have involved. That goes for next year's event too, so it's vital to stay on top of who is running the business. So you can imagine my pleasure on welcoming PEOPLEnet's recently appointed Marketing Director to our Russia & CIS Com LinkedIn group this afternoon. I was even more pleased by a brief exchange of correspondence following my welcome note. From this, I learned that the gentleman whose presentation so impressed me in Moscow back in June has moved on. I also learned the name of his replacement, and I hope I have been able to keep my new contact interested in joining us in Moscow in 2009 - and encouraging colleagues and partners to do likewise.

All of this is really just a bit of preaching from a LinkedIn evangelist. I genuinely believe everyone doing business across time zones, cultures and complex value chains owes it to themselves to take advantage of the Web 2.0 functionality of resources as useful as LinkedIn.

Nawras CEO joins GSM>3G Middle East speaker panel

I was delighted to hear from Omani MNO Nawras this morning, confirming the participation of CEO Ross Cormack on the panel of speakers at our GSM>3G Middle East TOWARDS A BROADBAND WORLD event in Dubai this December. Ross has been a loyal and enthusiastic supporter of the conference and it will be a pleasure to welcome him and his colleagues once again.

Since Ross participated at the 2007 version of the event, Nawras have gone first-to-market with 3.5G services in Oman. Nawras competes in the cellular space with the mobile business unit of incumbent carrier Omantel. Oman Mobile has yet to deploy a 3G network, but in February this year it was reported that Huawei had undercut Ericsson and Nokia Siemens networks to win the Oman Mobile contract for the building out UMTS coverage. I notice that this report describes Oman Mobile as "one of the few cellcos in the Middle East yet to build a 3G network'. I beg to differ. Referring to the invaluable World Cellular Information Service from Informa Telecoms & Media, I can see that 3G networks are as yet absent in all of Iran, Iraq, Jordan, Kuwait, Lebanon, Syria and Yemen. We expect all of these countries to be well represented at our December conference, as well as good-sized contingents from South Asian, North African and West African markets where mobile carriers are associated with Middle Eastern shareholders/owners. So I have proposed that Ross Cormack speak on the theme of gaining competitive advantage through the first-to-market deployment of a 3G network. That ought to be useful for delegates from those countries.

I am also mindful of the fact that the Omani market has recently opened up to MVNOs and mobile resellers, so a possible alternative presentation topic for Ross would be to look at how far market liberalisation and the emergence of this kind of new entrant compels established players to sharpen their focus on understanding and maximising customer value.

Two of the MVNOs concerned, FRiENDi mobile and Majan Telecom are already confirmed participants at our conference. The former will be represented by Fayez Husseini (SVP, Business Development), the latter by the company CEO Niklas Nielsen. So we are well on the way to having the Omani telecoms sector very well represented at the conference.

2 Sep 2008

Iraqi operator CxOs join speaker panel at GSM>3G Middle East

As my colleagues and I work to develop the Com World Series, one of the real pleasures of the job is getting the opportunity to meet people whose daily efforts are bridging the digitial divide in some of the most challenging markets imaginable. Anyone who has encountered Karim Khoja, CEO of Afghan mobile operator Roshan, will have been impressed by his passion for his company's contribution to the development of that troubled country. To my mind, Karim is rightly proud of running the one of Afghanistan's largest private employers and of the fact that a fifth of his workforce are women, something which was prohibited during the seven-year rule of the Taliban.

I have been fortunate enough to meet several members of Karim's management team, and have been interested to hear about the security and logistical challenges of living and working in Afghanistan. I have also met executives from Roshan's competitor Afghan Wireless. Their experiences are naturally pretty similar. As a daily communter into London, I am naturally in the habit of exchanging horror stories about travel delays and overcrowding with colleagues. The daily challenges faced by good folks at these two MNOs really do put my little travel problems in the shade.

Thus far, I have not had the chance to learn from telecoms people in the other country most associated in the popular imagination with conflict and a perilous security situation - Iraq. Today it looks as though that is set to change.

I recently asked my colleague Emily Cottam to assist me with gathering CxO-level speakers from a list of operators and countries that have traditionally been under-represented at our annual GSM>3G Middle East conference in Dubai (this year 15-16 December). Emily today received the welcome news that two of the mobile operators in Iraq have confirmed their participation. So, in December we be joined by Dr. Diar Ahmad, CEO of Asiacell and Dr. Hameed Akrawi, Deputy CEO of Korek Telecom. We are encouraging both to focus their presentations on the matter of rapidly expanding network reach and service availability in a cost-effective manner.

Both of these companies started their operations in Iraqi Kurdistan. Asiacell is the older business, first established in 1999 by Iraqi businessman Mr. Faruk Mustafa Rasool. Initially, network coverage was primarily around the Kurdistani city of Sulaimaniya. Wataniya Telecom(40%) and the United Gulf Bank (9%) have since become shareholders. Since October 7, 2003, the Iraqi Ministry of Telecommunications has allowed Asiacell to operate across Northern Iraq and expand into the rest of the country.

Korek Telecom, meanwhile, has continued to confine its operations to its home territory of Kurdistan. However, this looks set to change. Korek now has a national license but a network still limited to Iraqi Kurdistan. We understand that to maximise the value of the licence, Korek Telecom will need to expand to national coverage, maybe as part of a JV withEtisalat, which would give Korek access to the UAE incumbent's resources and international operating expertise to roll out a countrywide network that could compete with Zain and Asiacell. Given that both Korek Telecom and Etisalat will both be present at our conference in December, we get some clarity on that then if not before.

Mixed news from Chilean mobile market ahead of Americas Com conference

South American telecoms markets are naturally on my mind as I prepare to head for Rio de Janeiro on Saturday afternoon, heading out early to prepare for our two day Americas Com conference and exhibition on 9-10 September.

So the item of commentary which caught my eye first this morning was an outline of a new BuddeCom report which indicates that Chile is no longer the leading South American market in terms of of mobile penetration, having been overtaken by Argentina and Uruguay. A more positive aspect of the Chilean mobile market, according to the report, is a boost in ARPU, attributed by the author to expanding data services and a growth in the perecentage of subscribers on post-paid plans.

As further markets deploy 3G networks and roll out commercial mobile broadband services in earnest, delegates at next week's conference may look to the Chilean example for guidance. I'd like to remind all telecoms opeator readers once again - attendance at Americas Com is free of charge for you, so do please register online if you can make it to Rio next week:


1 Sep 2008

Millicom 3G deployment announced across entire LatAm footprint

Telecoms.com, the leading news and opinion telecoms sector website operated by Informa Telecoms & Media, reports today that Millicom International Cellular plans to have launched 3G services in all of its Latin American markets by the end of this year. The mobile group, headquartered in Luxembourg has already launched 3G in Guatemala, Honduras and Bolivia. Launches in Paraguay (today), El Salvador (tomorrow) and Colombia (by the end of 2008) are all set to follow.

I had the pleasure of visiting two of Millicom's Tigo-branded operations while touring South America in April this year. In both Paraguay and Bolivia, I was struck by the very high visibility of the brand. I also learned a little about the Bolivian operation's WiMAX launch, but was in the country a little too early for the full commercial 3G deployment.

This recent announcement supports my personal belief that tech vendors looking to tap into major big CAPEX in Latin America will soon need to look beyond the strong growth story in mobile. Once 3G networks are rolled out across the whole region, I wonder which technology area will offer the best growth prospects. It was this line of thinking which prompted us to broaden the focus of our long established Latin America region conference and exhibition. What was once 'GSM Americas', is now a more holistic event in terms of welcoming every kind of telecoms service provider - fixed/mobile/integrated; traditional telecoms space/cable MSO/emerging forms of service provider.

This year's event is imminent. My team and I board the plane to Rio de Janeiro this Saturday in time to set up for next week's conference on 9-10 September. We'd love to see you there. If you represent any telecoms operator, we can still admit you free of charge. Register at: