3G, MNP, MVNOs set to shake up Turkish mobile market?

Preparations are now well underway for our annual Eurasia Com conference, the next iteration of which will take place 31st March & 1st April 2009 at the Mövenpick Hotel in Istanbul. I am pleased that after two years of hosting this event in venues on the fringes of the world's third largest city, we are now able to hold the discussions and networking in a more central location. Next year's venue is in easy striking distance of the Taksim Square shopping and entertainment hub at the heart of Istanbul. This will make life easier for sponsors and exhibitors looking to entertain telco operator clients in the evenings and should boost the number of visitors we get from the many Turkish telco sector companies with headquarters in the city.

The conference is definitely a draw for major Turkish telcos. In the last two years, we've welcomed luminaries such as Tayfun Çataltepe (Chief Strategy/International Expansion Officer at Turkcell), Tulin Karabuk (Chief Investment Officer, Turkcell) and Mehmet Toros (COO, Türk Telekom). However, many of our sponsors support the event not only to reach out to Turkish companies, but also to tap into the high growth CIS markets of the Caspian Sea region and Central Asia. We therefore need to make the event attractive for visitors from these countries. While a pleasant downtown location is perhaps not the most important factor, it can't hurt - so I was happy to shower praise on our operations/venues people for securing this welcome upgrade.

I've been joined this week by a newly-hired Russian-speaking colleague who, as I write this, is on the phone gathering the lastest market intelligence from countries including Azerbijan, Georgia, Armenia and Kazakhstan. Every day, I am handed valuable nuggets of information which will definitely impact on the content and format of the Eurasia Com conference agenda. We are getting a clearer sense than ever before of the challenges and opportunities facing operators in these markets and I think we now know what to do in terms of creating a must-attend event which should gather the region's telcos in ever better numbers.

Meanwhile, I am catching up with contacts in Turkey, with a view to finding out which issues are keeping telco execs in that country awake at night. One of the most interesting conversations I've had this week was with someone at one of Turkey's mobile services distributors. Among the things I was told:

• Mobile Number Portability will be implemented very soon; my respondent felt that the country's 3rd placed mobile operator is welcoming this as a great opportunity to build market share through more aggressive competition on price.
• Two of Turkey's three MNOs are testing their 3G networks, which my respondent expects to go live in Q2 2009; my respondent predicts that Turkcell will move fastest to get the networking up and running, largely because of an urgent need to address network capacity issues.
• After some buzz of interest in the possible launch of MVNOs, there is now concern that the current tax regime is set to make the business case less attractive that once hoped.

The next time I get the opportunity to write something here, I aim to share a few snippet about what's happening across the wider Eurasia region our conference and exhibition will serve.

Catching up on developments across Eurasia

We will very shortly be getting to work on the arrangements for our 5th annual Eurasia Com conference and exhibition in Turkey. The event will take place 25-26 March 2009, with Istanbul being the host city for the third consecutive year, following on from an initial two years in Almaty, Kazakhstan.

For us, the term 'Eurasia' maps quite closely to TeliaSonera's use of this sometimes ambiguous word. With reference to the company's TeliaSonera Eurasia business area, the giant Scandinavian telco, like us, seems to use the term 'Eurasia' in the geopolitical sense, i.e. as a (neutral) way of referring to the post-Soviet states, in particular the Central Asian republics and the Transcaucasian republics.

So, our Eurasia Com conference, as well as attracting plenty of delegates from the host country's operators (Turkcell, Turk Telekom, Avea etc.), is really designed to offer networking and learning opportunities to execs from the service providers of Caspian states (Armenia, Azerbijan, Georgia) and 'the -stans' of Central Asia: Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, Uzbekistan. Mongolian delegates have also shown up in pretty good numbers for the last two years.

We find that a number of tech vendors we speak with find this to be an interesting but challenging region. Growth potential is good: mobile markets are some way from reaching European-levels of penetration, 3G networks are not yet ubiquitous, wireline teledensity is quite low. However, my own experiences of developing contacts in this part of the world make me realise that it's not always easy for some companies to explore the possibilities and do business with the operators that are taking advantage of the growth opportunities. So we believe that our event offers a uniquely valuable one-stop shop for vendors looking to make improve their connections in this region.

I am therefore working to catch up with any interesting developments that have taken place across these markets since we last visited Istanbul in April this year. A notable one is TeliaSonera's integration of two previously separate mobile operators in Tajikistan, Indigo and Somoncom. These two companies were among the assets the Scandinavian telco acquired when it bought U.S.-based MCT Corp. back in 2007. MCT also had stakes in Coscom of Uzbekistan (now rebranded UCell) as well as a smaller stake in Roshan of Afghanistan. According to a Global Mobile Daily report last week, Ucell have just launched 3G services in the cities of Tashkent and Samarkand. This leaves Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan and Turkmenistan as the region's markets that had not reported W-CDMA subscriptions to the World Cellular Information Service by June of this year. Turkey's 3G licensing process has been much delayed so, overall, I expect Eurasia Com to be attended by a lot of delegates who have yet to gain extensive experience working in a market where 3G services are available. If that translates into pent-up demand to learn from colleagues who do have useful experiences and insights to offer, we should see very lively networking and discussions.

Russian telcos heading for Africa?

While I still have my hands full preparing for our GSM>3G Middle East conference in December, I will shortly be turning my attention more fully to Russia and the CIS. We host two gatherings in the first half of the year which are designed to draw together telecoms execs from markets across the former Soviet Union. The first, Eurasia Com, takes place in Istanbul in March, a natural travel and business hub for the Caspian and Central Asian regions the event serves. Further, Istanbul-headquartered Turkcell is a major player in these markets. The Turkish cellco is co-owner (with TeliaSonera) of Fintur Holdings, a company which manages MNOs in Azerbaijan, Georgia, Kazakhstan, Uzbekistan, Tajikistan as well as Moldova. It's therefore important for the event that we get high-level support from Turkcell. In 2008, the company's Chief Strategy Officer Tayfun Cataltepe was among our speakers - and has gone on to become a valued supporter of the wider Com World Series. The previous year, we welcomed Turkcell's Chief Investment Officer Ms. Tulin Karabuk.

Coming up in June, we have another CIS-focused meeting: Russia & CIS Com in Moscow. This gets a different crowd - delegates mainly from the Russian Federation itself, as well as from Ukraine and Belarus. Regarding the latter country, we really boosted the level of the participation. Belarus's incumbent carrier Beltelecom was represented by General Director Konstantin Tikar, who made some very kind comments abou the usefulness of the trip.

At the last two iterations of Russia & CIS Com, we've heard more and more about the plans of some Russian cellcos in terms of exploring the growth potential of markets outside their usual CIS footprint. Earlier this year, a delegation from Iran was very visible, clearly hoping to remind prospective strategic investors of the impending sale of a 3rd national mobile licence in the Islamic Republic. We've also seen Russian telco people showing up at a conference we used to run in Vietnam, clearly interested in that particular market.

It wasn't, therefore, a big surprise to see a news item this morning which indicates that Russian telecoms investment firm Altimo has expressed an interest in Nigerian operator M-Tel/NITEL. We'll encourage Altimo and other Russian groups to get involved at our huge annual pan-Africa event in November: www.ComWorldSeries.com/africa.

US cellular pioneer urges US carriers to go (back) to emerging markets

There seem to be some interesting messages in John Stanton's speech at last week's CTIA Wireless IT and Entertainment show in San Francisco. Stanton's profile is such that his comments are bound to hit the headlines, as with this write-up from the Register. Stanton was co-founder of pioneering US wireless carrier McCaw Cellular. Cade Metz, the Register's man at the event in San Francisco, says that Stanton "questioned the sanity" of the T-Mobile US, Verizon Wireless and Sprint Nextel CEOs who had "spent the morning discussing their gradual transition to... networks that accept any device and any application".

Stanton articulated the view that this approach is tantamount to making the mobile operator an access provider, stating that access is (or is fast becoming) a commodity business. He argues that "if you become a pure access technology, in a saturated environment, you’re ceding yourself to growing at the rate of the economy." Stanton feels that big European and Asian carriers are "already limited by economic growth.... and US carriers are well on their way to the same fate."

Metz reports Stanton's two suggested remedies for this. Firstly, US carriers need to "own significant content", something they have "essentially ceded... to the Googles". Secondly, Stanton invited US telcos to follow his lead by investing abroad.

The first point prompted a number of incredulous responses on the Register's comments page, mostly focused on how carriers worldwide have not fared well with a walled garden approach to mobile content. I can only add that in 6+ years of attending telecoms sector conferences and talking to telco execs, I've sensed more and more people coming around to the view MNOs are best advised to be good citizens in a multimedia ecosystem which involves content owners, aggregators, distributors etc. all getting their slice of the cake in exchange for bearing some of the risk around developing new products.

Stanton now oversees the Trinity Partnership, which invests in wireless-related companies and runs various international mobile networks, including Neuvatel PCS (Bolivia), Comcel Haiti. These two companies operate in markets where mobile penetration stood at, respectively, 45.11% and 37.29% by June 2008, according to Informa Telecoms & Media's WCIS. Clearly, there is a lot more room to grow here than in saturated Europe and near-saturated North America, hence Stanton's advice to his compatriots.

It's heartening to see someone so prominent talking up emerging telecoms markets as a smart bet. Here at Com World Series HQ, we also believe that developing markets worldwide are where the action is for telcos and their suppliers. We enjoy navigating the challenges of connecting these two groups in locations as diverse as Istanbul, Rio de Janeiro and Abuja, Nigeria.

While doing so, I've certainly observed that European and Middle Eastern telcos have a collectively much bigger presence in emerging markets than US companies. The latter seem to have been in retreat for some time. For example, in the few years I've covered telecoms markets in Eastern Europe, I've seen Metromedia International Group dwindle from a collection of cellular and broadcast radio assets around Russia, Kazakhstan and elsewhere. I believe the company's only holding in that region now is Georgian cellco Magticom. In South America, US household names such as Verizon and BellSouth have been divesting assets since earlier this decade.

Having not long returned from our Americas Com conference in Rio de Janeiro, and having toured a few South American countries earlier this year, I am struck by the strong position of Spain's Telefonica, Mexico's America Movil and, to a lesser extent, European players such as Telecom Italia, Portugal Telecom and Millicom International Cellular in the region.

John Stanton said last week "the major American companies have essentially retrenched, which means scale is going to be ceded to foreign companies." In the regions I cover, it feel like that has already happened.