3G Americas on LatAm region's contribution to the 4 billion global mobile subs

Just before the Christmas break, our friends at 3G Americas flagged up a historic milestone for the cellular industry, announcing that as of December 2008 there exist "4 billion connections to mobile devices worldwide." Citing the number crunching of our very own market watchers at Informa Telecoms & Media, the GSM family-focused wireless industry trade association noted that this "represents 60% of the entire global population today" and that "in some countries, millions of people are now experiencing connectivity to the world for the first time through wireless and changing their economic, social and political fortunes forever."

The 3G Americas release goes on to quote Marisol Gomez, our LatAm region analyst, with whom I've had the pleasure of working in the last few months. Marisol says: "the Latin America and Caribbean region continues to show steady consumer growth with 16% year-on-year growth as subscription numbers are expected to reach in excess of 440 million, equating to 76% penetration."

I remain keen to keep an eye on the Latin American mobile scene, not least because preparations for the next GSM Americas/Americas Com conference are well underway. As part of this, the Com World Series team is now working much more closely with our Sao Paulo-based colleagues at sister company Informa Brasil. Marisol and I have both been involved in detailed briefings designed to ensure that we harmonise our efforts with our Brazilian friends and jointly add value to an already well-established regional discussion and networking forum. We return to Rio de Janeiro for the 2009 iteration, hosting the event at the wonderful beachfront Windsor Barra Hotel 30th June-1st July.

It's gratifying to see the folks at 3G Americas continuing to cite Informa TM market information given that I've personally striven to develop further our partnership with Chris Pearson, who heads up the association and Erasmo Rojas, who leads activities in Latin America. For as long as I've been involved in our Americas event, Chris and Erasmo have jointly led a co-located 3G Americas Executive Briefing, which assembles CxO-level speakers from leading mobile carriers. We are on track to offer this feature of the conference once again in 2009, and both sides have been discussing how we can do even more to ensure that the audience maximises the opportunity to engage with the panellists and derive maximum value from their presence.

Chris and Erasmo both seem very keen that the wider conference begins to offer more insights around the roadmap for evolution towards LTE.

"Third generation technologies continue to evolve and the GSM operator today has a clear path towards LTE," stated Chris earlier this month. "In addition to the evolution to LTE by GSM operators, LTE is proving to be the technology choice for CDMA operators as well."

3G Americas quote Informa TM's estimate that there are nearly 415 million 3G subscriptions to date, with 77% share of the 3G market on UMTS/HSPA networks or 320 million connections, and the remaining 95 million on CDMA EV-DO. Our figures suggest that the number of commercial UMTS/HSPA networks has risen to 258 in more than 100 countries, including 41 networks in 20 countries in the Latin America and Caribbean region.

"HSPA and HSPA+ will compete with any and all mobile wireless technologies available today and in the near future," concludes Chris Pearson. "In fact, recent commercial launches of HSPA+, such as that of Telstra in Australia, are reporting peak theoretical downlink speeds of 21.6 Mbps. 3G is more than capable of delivering the bandwidth customers need today, and the emerging LTE technology provides us with a clear evolution path for the future."

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.

Turk Telekom to grow business into Macedonia?

Looking back over some of the stories which popped up while I was away on holiday, I noticed that Global Mobile Daily picked up news of the Turkish incumbent fixed-line operator's interest in acquiring the 2nd-placed MNO in the small market of Macedonia (population approx 2 million). I am not clear to what extent any new owner (other interested parties seem to include Telekom Austria and Telekom Slovenije) would be able to grow the business. In addition to the Balkan country being a market of limited size, it is one for which our WCIS reports mobile penetration as 112.17% as of September 2008. Moreover, first-placed T-Mobile has established a commanding lead in terms of market share. According to WCIS, the Deutsche Telekom-aligned cellco owns 67.88% of subscriptions versus market shares of 32.13% and 12.16% for Cosmofon and VIP respectively.

VIP is part of the mobilkom austria group, itself a subsidiary of Telekom Austria - so if the Austrian incumbent's reported interest in Cosmofon is for real, I would assume that they would be thinking in terms of consolidating the Macedonian market down to two players.

Cosmofon's current owner is the Cosmote group, a company controlled by Greek incumbent carrier OTE. Assuming that the Greek group welcomes the interest being shown in its Macedonian outpost, this seems to represent another retreat from an East European market, OTE having not long quit Armenia. OTE sold its interest in Armentel, that country's then-monopolist wireline carrier (and associated mobile business) to Vimpelcom of Russia in late 2006.

If the Cosmofon story has played out by the end of March, and if Turk Telekom prevails, I daresay delegates at our Eurasia Com event in Istanbul will be keen to ask the company's CEO Dr. Paul Doany where the acquisition fits into his broader strategy.

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.

Impressions of day one of our GSM>3G Middle East event

Writing a blog entry on Christmas morning? A sure sign of a workaholic? Maybe for some. In my case, it's more to do with seeking some relief from watching my 3-year old son's Mr Men DVD for what seems like the zillionth time. Having risen at just before 5 a.m., the young man concerned has insisted on yet another run through every single episode of the classic kids' cartoon. I am not allowed to leave the room, it seems, so I might as well apply the brain to something other than the antics of Mr. Grumpy, Mr Bump et al.

This is, therefore an opportunity to share some of what happened at this year's GSM>3G Middle East conference and exhibition in Dubai, which kept my team and I busy on 15-16 December. I have time now to reflect on the event's first day - and will go over the second day's discussions once the seasonal round of visits to family and friends is over for another year.

The conference element of the event was opened by the Plenary Session Chairman, our very own Mark Newman, who spoke about how the Middle East's telecoms sector is booming, with mobile penetration set to grow by nearly 20 per cent to 77 per cent over the next 5 years. This bullish mood was echoed by the UAE's largest telco (and official endorser/sponsor of our event) Etisalat, whose Chief Corporate Affairs Officer Nasser Bin Obood used the Keynote Address to flag up the company's expansion plans. While I was on a short sunshine break immediately after the Dubai show, I got word of the next plank of this expansion strategy. Global Mobile Daily this week told me that Etisalat has submitted the highest bid for Iran's third mobile license, as part of a consortium that includes Iran-based Tamin Telecom.

According to Etisalat, the Iranian Communications Regulatory Authority has placed the operator "first among others in terms of financial offer." Etisalat added that the winner will be announced after official approval is granted. In a statement, Etisalat said it expects Iran's mobile market to have "a very promising future," because of the low penetration in the country, which has a population of 73 million.

Iran first began moves to launch its third GSM-license tender in August. However, the tender has remained overshadowed by legal wrangles after Turkey's Turkcell initiated proceedings in the International Court for Arbitration over its failed attempts to launch a network in Iran.
Foreign players known to be interested in entering the Iranian market include Russia's three major mobile players: MTS, VimpelCom, and MegaFon. Regarding the latter, I can personally testify to the Russian cellco not being coy about its interest in the Iranian licence. Back in June, I welcomed MegaFon's Deputy CEO Sergei Soldatenkov to our annual Russia/CIS event in Moscow, at which he was one of the key speakers. Later at the same event, Mr Soldatenkov was among the most notable people firing questions to a speaker from an Iranian delegation, which was on hand to raise the visibility of this and other investment opportunities in their country's telecoms sector. I am looking forward to another opportunity to meet Mr Soldatenkov in Istanbul. On March 31, he will be among the leading speakers at our Eurasia Com event, the Com World Series gathering of telecoms execs who have an interest in the markets of Central Asia, the Caucasus region and the conference's host country itself. Soldatenkov heads up the company which manages MegaFon's international subsidiaries, so he was a great choice to represent the company at an event whose audience will be drawn from the markets into which Russian cellcos first expanded their footprints. While I was out of the country, I learned that the Eurasia Com Plenary Session roundtable discussion, in which Mr Soldatenkov will be taking part, has a further confirmed participant. Joining the discussion will be a genuine mobile sector pioneer, Sir Julian Horn-Smith, who retired as Deputy Chief Executive of Vodafone Group plc in August 2006, having served with Vodafone since 1984 and for a decade as a board director, latterly from 2001-05 as Chief Operating Officer. One of Sir Julian's current roles is serving as an Advisory Board member for Altimo, the Russian investment group whose assets include stakes in Vimpelcom, MegaFon, Kyivstar (Ukraine) and Turkcell.

Another Keynote Session speaker in Dubai this month was Ross Cormack, CEO of Omani MNO Nawras, who spoke about how his company has benefited from being first to market with 3.5G services: "We had to make sure we had customers that wanted the service and services that they would want. So we listened to customers and responded to customers. The result has been pleasing growth and it's not as though we're going up against an unpopular competitor."

What was evident from the first day's discussions is that mobile broadband in the Middle East is heavily tipped to grow as strongly as in Europe. During the lead in to the event, I had the pleasure of exchanging correspondence with Dr. Slim Saidi of Zain's new KSA operation. Slim was instrumental in setting up the Zain Saudi Arabia CEO as a day two speaker and stood in for Dr. Marwan for a day one roundtable discussion, during which he indicated that there is significant potential for mobile broadband and that it is now just a matter of reaching those subscribers and providing access.

This rallying call was picked up by Farid Lekhal, Chief Commercial Officer of Vodafone Partner Markets, who said the way forward is to exploit the potential of the latest internet-capable devices and champion the accessibility of on-portal and third party services.

Vodafone has had the opportunity to learn from the mistakes made in its partner markets, leading the operator to conclude that third party applications do not cannibalise traffic on the network. "On the contrary, they expand it, and there is still room for operators to have portals," he said.

Tayfun Cataltepe, Chief Corporate Strategy Officer at Turkcell, shared the other operators' enthusiasm for internet mobility, declaring that, "Mobile broadband doesn't mean you have to be a dumb pipe."

"Mobile broadband is the future of telecoms on the whole, and the term 'broadband' will even fall out of usage as all connectivity will become 'broad'," he said. Cataltepe revealed that the Turkish cellco will launch 3G services in June 2009, and hinted that it would enable third parties to provided services on the network as a core part of its strategy. "The classical VAS (value added service) model is based on revenue sharing," said Cataltepe. "Those with the most creative services will make the most money, so operators will need to seek a revenue sharing agreement," he said.

Zain's Saidi agreed: "Access is a commodity now, so people are willing to pay for services they use. When the customers demand services it's up to the operators to deliver," he said. Also on the panel was Fouad Brahim Boumakh, president and CEO of Nano-Techpower, a start up which specialises in using nanotechnology to improve the battery performance of wireless devices, who summed up the sentiment over mobile broadband: "The name of the broadband game is any application, anywhere, on any device." Fouad approached me about joining the discussion a couple of weeks ahead of the event, and I was pleased to accept his proposal when I learned that his company is set to roll out nationwide WiMAX-based services in Algeria. I felt that adding this kind of new entrant to the discussion would usefully broaden the perspectives represented on the panel.

Later the same day, I enjoyed personally moderating one of the conference breakout sessions, whose broad theme was around how operators will need to refine further their marketing and product strategies as their markets become yet more competitive. It was a pleasure to introduce the various speakers, to chip in with questions where I could and to encourage audience members to do likewise. I am very keen for guests at our events to maximise the opportunity to engage with the speakers we assemble for them. I hope I was able to achieve this to a useful degree. Also, sitting up on stage in front of a large audience is actually easier than the many, many tasks executed by my Informa TM colleagues on-site at the event, all working hard to make sure delegates' time with us is maximally enjoyable and productive. At an event of this scale, the guys and girls of the Com World Series team really do perform brilliantly and I'd like to thank them all here for their good humour, good fellowship and hard graft.

Among the speakers I was personally able to introduce was someone with whom I've maintained an on-and-off correspondence for at least a couple of years. It was therefore a particular pleasure finally to meet Tushar Maheshwari in the flesh. Tushar is now Chief Commercial Officer of Warid Telecom Uganda, who picked up a gong at our recent Africa Com Awards in Cape Town. Tushar took questions after his speech and then dashed off to another awards ceremony elsewhere in Dubai to collect yet another prize on behalf of his company. As these accolades clearly demonstrate, and as his presentation made clear, Warid have had an impressive first year in Uganda. Tushar is clearly a man unafraid of a challenge. When I first connected with him, he was in the CCO role at Afghan Wireless, a competitor in a uniquely challenging market.

Across the two days in Dubai, aorund 2,000 people from operators, service providers, vendors, regulators and the media gathered at GSM>3G Middle East, which we subtitled Towards a Broadband World in order to make it clear that in the context of many forms of convergence (fixed-mobile, telco-media, telco-IT etc.) we feel it's high time to widen the audience beyond the cellular sector players who have supported the event for a decade-and-a-half.

Season's Greetings

GSM>3G Middle East featured a good-sized audience, great presentations, lively discussions and lots of useful networking. I will write more about the event when I return from a (too short) sunshine break, for which I am just about to leave. I think the taxi may be outside already...

This blog(ger) will be offline until just after Christmas Day. In the meantime, I wish all readers and Com World Series supporters happy holidays - and a prosperous New Year for those of you able to stay offline for longer than I am!

GSM>3G Middle East: setting up for tomorrow's event

GSM>3G Middle East event: Will we get updates on stakes in Iran's TCI?

Greetings from (very) sunny Dubai, where my team and I are busily making last-minute preparations for our annual GSM>3G Middle East conference and exhibition, which kicks off tomorrow morning at 09.00, local time. Registrations are looking very strong and we expect a significantly better-attended event than the very decent showing we got in 2007. I daresay my colleagues in the marketing team will be trumpeting all the very positive numbers soon - partly with a view to convincing those of you who have not joined us this year that you'll be missing out on an excellent networking opportunity...

On the second day of the event, we have among our panel of speakers Mr Vahid Sadoughi, the CEO of MCI, the mobile business unit of the national incumbent carrier Telecommunication Company of Iran. Our Global Mobile Daily service reminded me last week that a number of overseas investors are currently eyeing a stake in TCI. Interest seems to be strong in Russia, Turkey, China and Indonesia. It remains to be seen whether Mr Sadoughi will be able to field any questions relating to this in Tuesday's plenary session.

Russian cellco gets to work in Cambodia

Earlier this week, Global Mobile Daily picked up on developments in Cambodia, where Russian cellco Vimpelcom has made progress with setting up its newest foreign operation. Chinese vendor Huawei has picked up the contract to roll out a nationwide GSM900/1800 network for Sotelco, 90% of whose parent company, Atlas Trade was purchased by Vimpelcom in July this year. This stake was bought from Vimpelcom's largest shareholder, Altimo.

Having just completed the speaker line-up and agenda for our Eurasia Com event (March 31 & 1 April 2009, Istanbul), we continue to watch Moscow-based telcos and investors such as Vimpelcom and Altimo, with a view to assembling another compelling set of presenters for the Moscow event whose discussions are more sharply focused on developments in the Russian Federation itself, as well as neighbouring states Ukraine, Belarus and Moldova.

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.