HSPA subs growing in Saudi Arabia; market developments in slow-to-liberalise Kuwait

While I was moderating conference sessions at this month's GSM>3G Middle East conference in Dubai, I had the pleasure of introducing a representative of Saudi cellco Mobily to the audience.
Mohamed A. Radwan heads up the development of the MNO's chain of retail outlets and told conference participants about the company's approach to promoting all 3.5 G capabilities and VAS. According to the notes I made on the day, Mohamed did not share numbers regarding HSPA subscriber growth. I was therefore interested to see this question addressed in an edition of Global Mobile Daily last week. The Informa Telecoms & Media research service says that the number of Mobily's HSPA-based subscriptions has reached 300,000, having acquired this number of subs in the 18 months since launching a mobile broadband bundle in May 2007. Mobily charges SAR350 per month (USD 93.40) for the service and also has higher usage bundles on offer - 5GB for SAR200 and 1GB for SAR200.

The same issue of GMD picked up news of Kuwait's Ministy of Communications moving to reduce the cost of calling several European and Arab countries. The MoC has a free hand in such matters. The market is the least liberalised in the MENA region: fixed line network operations remain the exclusive preserve of the MoC itself and the Gulf state has no independent regulator.

The mobile space in Kuwait is rather more competitive, even more so since the September 2008 launch of Saudi Telecom-backed Viva, the country's newest cellco. It will be interesting to see how this third entrant fares on a market described in the abstract of my friend Paul Budde's country profile as having "[high] prices... across all sectors of the market" and a "comfortable duopoly enjoyed by Zain and Wataniya [which] has enabled them to build on their strong base to expand aggressively internationally to compete on a global scale."

Something I didn't know ahead of writing today's entry was that until very recently, Kuwaiti mobile users have had to pay to receive incoming calls. I just stumbled upon this personal blog, which reported earlier this month that Viva had broken the mould by implementing a pure Calling Party Pays model. From the comments which this entry prompted on the blog, it looks like Zain moved to introduce CPP a mere 12 hours later. I am not clear if Wataniya has done likewise or plans to do so. Warning: if you do follow the link to the blog which picked this up, prepare yourself for reader comments expressed in pretty strong language and people whose criticisms of Kuwait's operators are much less diplomatic than anything you will ever read here!

If this information is to be believed, it does suggest that Paul Budde's comment about a "comfortable duopoly" might not have been too wide of the mark - and that this duopoly has been quickly attacked by the new entrant.

I am not clear when Kuwait plans to set up an independent regulator. Global Mobile Daily suggested as long ago as August 2007 that this was a work in progress and set to be discussed "during the next National Assembly session." I haven't seen news of any developments since then and when a colleague of mine went on a fact-finding tour of the Middle East earlier this year, I do remember a number of his research respondents expressing frustration about the pace of helpful change in the country.

I can't pretend to know enough (yet!) about the MENA region to understand why the speed of evolution towards more progressive regulatory regimes is so uneven across the various markets. In Dubai this month, I certainly got the sense that things are moving faster in some states. One example would seem to be Bahrain, whose regulatory agency sent Deputy Director Tomas Lamanauskas to speak at our conference. I asked Tomas how a Lithuanian had ended up at the Bahraini regulator and learned that he had made the move from the equivalent body in his home country. Tomas told me that to some extent, his new employer is seeking to create a regulatory regime which resembles the EU framework. Tomas replied affirmatively when I asked if, in a sense, his latest role had something in common with the job of harmonising Lithuania's regime to the European framework, something which I remember being a big topic of conversation a CEE region conferences some years ago, not least among delegates from then soon-to-be EU accession states.

More on the optimism expressed at GSM>3G Middle East

After considerable quantities of roast Turkey, mince pies etc., it's time to round up some more of what was discussed at our recent GSM>3G Middle East event in Dubai. The focus here is on the second day's proceedings.

One thing we took away from both days' discussions was the widely expressed sense of optimism that the Middle East's telcos will weather the economic downturn relatively unscathed. Day two opened with a speech from Dr Marwan Alahmadi, CEO of Zain's Saudi operation, who described the new entrant's successes to date - and was bullish about the way ahead.

Great confidence was also expressed by speakers from both FRiENDi mobile and Majan Telecom, two companies looking to thrive as MVNOs on the Omani market. The afternoon saw a robust presentation from Mobinil on the ever more pressing necessity to provide a dashboard of VAS to both protect current and expand future revenues. Judging by the enthusiastic questions directed at the Egyptian cellco's Commercial VP Guillaume van Gaver, this presentation struck a chord with a receptive audience.

For my part, I moderated sessions whose broad theme was around extending the availability and improving the affordability of communications services in lower ARPU markets with less easily addressable demand. Among the speakers in this session, it was great to meet Khaled Khorshid, currently the Regional COO of Zain Sudan. After sharing useful insights about how to grow a successful mobile operator, Khaled mentioned that his personal journey is about to take him to another outpost of the Zain empire - he is being dispatched to the Nigerian operation. Khaled was kind enough to volunteer to join the panel of speakers at the Com World Series event which takes place in that country's capital so I have encouraged my colleague who covers Africa to take up the offer. So look out for Khaled among the speaker line-up for West & Central Africa Com in Abuja in June 2009.

The Dubai event was enjoyable and rewarding for me - and I am looking forward hopefully to reading positive feedback from delegates early in the new year. The work leading to the creation of the 2009 Middle East event begins now.

Lebanese mobile market shake-ups: DT to withdraw?

A helpful colleague here at Informa Telecoms & Media recently forwarded me a story which reports changes on the Lebanese mobile market.

While preparing for our imminent GSM>3G Middle East conference in Dubai, I was surprised to receive news of a speaker cancellation. We had long planned to welcome the Chief Commercial Officer of Lebanese cello Alfa, one of the very first presenters to have confirmed his interest in sharing insights at the event. We have since replaced the planned presentation with one from Saudi Arabia's Mobily, but it's always disappointing to have to cancel a presentation which we have advertised for some time.

I cannot be sure, but we may have to assume that the Alfa cancellation is related to recent news that Lebanon's national unity government is forcing the company to abandon its contract to manage one of the country's two state-owned mobile phone networks, having criticsed its services. Alfa, a joint venture of Deutsche Telekom and Saudi Arabia's Fal Holdings, had to hand over control of the MIC1 network to the Telecommunications Ministry on 1 December, thereby ending its four-year management contract.

"With MIC1, we were not happy with the quality [of service] that we ended up with,"" says Gilbert Najjar, the head of the ministry's advisory board on the two networks.

The Kuwaiti operator Zain, which manages the country's second MIC2 network under its MTC-Touch brand, will also have to hand over its contract, but not until the end of January. Najjar has declined to criticise Zain's management of MIC2, and the Kuwaiti firm is therefore expected to rebid for its contract. Lebanon's telecoms regulator has indicated that Zain needs to reapply because the Council of Ministers (cabinet) is certain to change the terms of the contract.

"This is a legal and administrative issue. They are changing the terms of the contract so they cannot just renew the management contracts,"" says Lelia el-Khazen, a senior market analyst at the Telecommunications Regulatory Authority.

Etisalat, Zain presence boosted at GSM>3G Middle East event

With 18 days to go before our annual Middle East region event, we have news of very welcome late additions to the panel of speakers, adding further value to an already strong conference programme.

Zain's presence at the event has been boosted further by confirmation that the CEO of the group's Saudi Arabia operation, Dr Marwan Al-Ahmadi, will be making a presentation to open the second day of the event (16 December). Zain's KSA operation only went live as recently as August 26, joining the group's 'one network' borderless roaming service. Given the newness of this business unit, we expect there to a very strong interest from delegates keen to evaluate the progress made by Dr Marwan's team in the first few months of commercial operation.

Another group involved closely with this year's GSM>3G Middle East conference is Etisalat. The UAE's leading telecoms service provider, and an endorsing sponsor of our event, Etisalat has subsidiaries in markets including Saudi Arabia, Pakistan and Egypt. Representing the group on the panel of speakers will be Mr Nasser Bin Obood, Chief Corporate Affairs Officer and Mr
Mr Ali Amiri, Executive Vice President Carrier & Wholesale.

I also wanted to point out that our friends at the UMTS Forum and GSA (Global Mobile Suppliers' Association) are jointly hosting a workshop, immediately following the conference on 17 December. The workshop is designed to provide attendees with information and insights on the benefits of deploying WCDMA/HSPA in the 900MHz band, including increased coverage and in-building penetration, as well as lower CapEx and OpEx relative to WCDMA/HSPA deployed at 2100MHz. The workshop will also address the challenges faced by operators in deploying UMTS900, including fragmented spectrum allocations and co-existence with GSM900.
Regulators and senior decision makers involved in the areas of network strategy and deployment, including CTOs, Strategy and Planning Directors, Spectrum Technology Managers, Senior Engineers and Network Architects, as well as Marketing and Product Management personnel, will benefit from attending.

Vendors and operators show one-size does not fit all across the Middle East

This morning I had the pleasure of meeting a marketing contact with responsibility for the Middle East, Pakistan and Africa, representing one of the major network infrastructure vendors. The purpose of the meeting was to work out the timing and topic for the presentation to be made by the company's speaker at our December "Towards a Broadband World" event in Dubai.

It is always gratifying when a sponsor's thoughts about selecting a value-adding topic are not too far from my own. In this case, we wanted to urge our customer to talk in quite broad terms about the range of competing and complementary broadband wireless access technologies being evaluated by mobile, fixed and integrated operators in the region. I felt this was important for a number of reasons. Firstly, we are working hard to broaden the focus of the conference well beyond issues concerning either pure-play mobility businesses or the mobile-specific business units of carriers with both cellular and wireline assets. I am confident we will be successful, so I was keen for our customer to take advantage of speaking in a plenary sessions, when the themes addressed need to be broader than the issues tackled in technology-specific breakouts. Secondly, I felt that a more holistic look at all forms of broadband access made sense in the light of what I was told by a colleague who represented me a few weeks ago in face-to-face meetings with a number of operators in the Middle East.

Aaron Boasman, who works in our Networks & Infrastructure team, came back from a quick tour of the region armed with interesting insights. He was told by the GM of Corporate Affairs at one country's incumbent operator told Aaron that the company was more bullish about the prospects for fixed broadband access than the mobile version on the grounds of the robustness of the service. Certainly at the time of that meeting, the company had not deployed WiMAX, unlike its principal competitor in the mobile space. On another leg of the journey, Aaron was told by one operator that WiMAX deployment has been signidficantly delayed mainly as a result of the country's unsatisfactory regulatory regime. In that particular meeting, HSPA was given a very favourable review due to the country's poor quality copper network and very under-developed FTTx.

These snippets confirmed for me that when telecoms industry watchers attempt to speak in broad terms about trends in a given world region, they need to be mindful that these regions are not always neatly homogenous. A look at Zain, whose footprint extends across and beyond the Middle East, support this view.

Matthew Reed, writing for our fortnightly Middle East & Africa Wireless Analyst research service this month flagged up Zain's imminent market entry in Saudi Arabia. Matthew writes that this new market's huge potential for high-speed Internet-access services is sparking interest in the group's wider wireless broadband strategy. The MEAWA story reports that Zain has had Nokia-Siemens Networks and Motorola deploy HSPA in key cities in anticipation of high demand for beoadband services with mobility, the pent up appetite for which has possibly been frustrated by slow DSL rollout by incumbent STC.

The MEAWA story goes on to note that Zain has embarked on a number of different technology paths across its footprint. For example, in Kuwait, Zain's original 'home market', the operator has launched a 7.2Mbps HSPA network that enables video calling, streaming TV and sports footage and movie-clip downloads. Customers there use a Huawei HSDPA dongle. This seems to work well in tiny Kuwait, which accounts for only 3% of the group's subscription count but one-fifth of its revenues.

MEAWA notes that in Suadan, Zain has launched a 3.5G network in the capital capital, Khartoum, and runs both HSDPA and WiMAX networks in the tiny Gulf state of Bahrain.

In the longer term, writes Reed, Zain plans to deploy wireless-broadband services in many more countries, and is looking out for WiMAX licenses in several African countries.

It is proving very enjoyable to navigate my way around these varied market. I am confident that those of you who join us in Dubai in December will see the diversity of market conditions and operators' technology choices fully reflected in a compelling conference agenda.