Telcos should proceed cautiously with communication apps

Mobile operators are currently in a similar position to the fixed operators of ten years ago as third-party VoIP providers look to move in on their territory. WhatsApp has had a significant impact on theNetherlandsmobile market, and other companies such as Skype, Viber, and Ping are looking to have the same impact on other mobile markets around the world.

In response to this threat, mobile operators have adopted two strategies. Firstly, they have introduced larger call and SMS bundles to undermine the price differential between their voice services and third-party voice apps. Secondly, they have scrapped “unlimited” data bundles for tiered pricing, which has made it more expensive for customers to extensively use their mobile devices for VoIP calls.

However, the increasing availability of free Wi-Fi is a game changer. The popularity of homezone tariffs demonstrates that many customers frequently use their mobile phones at home and in the office, which are both places where customers are also likely to have access to free Wi-Fi. Using third-party communication apps over free Wi-Fi makes it easy for customers to make free calls, send free SMSs, and incorporate “presence” in ways that are beyond the control of mobile telcos.

Willy Gerard (10M+)

MEA Telecom Strategist

MNO Portal Services for Mobile Network Operators

In the current scenario of declining voice revenue and greater competition, mobile operators see mobile content and applications as a way to both increase revenue and combat competition in order to attract new customers and win the loyalty of existing ones. In order to make their presence felt in this competitive scenario, mobile operators need to deliver content and services in a variety of forms. Mobile Portals have become a major part of MNO strategy, implemented to drive ARPU (Average Revenue Per User) and to ensure combination of a wide service offering and powerful drivers of data traffic and premium revenue.

The MNO Portal is all about managing the full life cycle of mobile services offered by a network. The MNO portal provides a friendly interface for the design and execution of mass-scale or targeted marketing campaigns. Services like ring tone downloads, news and entertainment services, chats services and much more can be pushed to the subscribers. Mobile operators can decide which services to promote to which customers and can run targeted campaigns based on subscriber segmentation, service strategy or handset deployment. By sending an interactive message with a one-click link to action, a promotion campaign puts the right message directly into the hands of the consumer.

The MNO portal provides an answer to suit both operators and subscribers in terms of services and user experience, thus increasing service usage and revenues

Benefits to the Subscribers

· Trouble-free Access – All services are accessible from one entry point, the subscriber’s SIM service menu. Users don’t need to learn hi-tech configurations or no need to remember complex codes
· Services – A large choice of service categories, maximizing convenience
· Availability of Dynamic information – Daily updates of content; introduction of new services, removal of obsolete or non-adapted ones. Information, news, new services and much more delivered dynamically
· Accessibility – Wherever, whenever, through any handset

Benefits for mobile operators

· Centralized services management
· Higher Revenue through increased service usage, and traffic
· Reach extends to 100% of subscribers
· Enhanced reputation and image as a value-added service provide
· Loyal customer base

Sim card being single point of accessing services, allows mobile operators to:

· Offer device-independent accessibility to all of their services
· Manage all services from one central location
· Focus on services improvement through user statistics and preferences
Mobile content delivery platform offers a versatile platform to the new age Application Service
Providers and Enterprises for managing, storing and distributing all their wireless media, images, sounds and streaming video to mobile subscriber base. The cost of content management (typically consisting of content creation, operations, migration and validation) increases when mobile content is managed separately. A unified delivery platform can be the best and most cost effective way to publish content seamlessly across various channels. Unified content delivery platform helps organizations increase return on investment (ROI) on their existing content investments. Irrespective of the degree of control over content available via MNO portals, MNOs must take responsibility for the content available to customers via their networks if they drive revenue from that content.
Ensuring the MNO portal is a success, requires a thorough understanding of the costs and benefits associated with the operators’ preferred portal development strategy. Equally, effective assessment of the ROI requires effective cost allocation and benefit measurement.

 

Willy Gerard (10M+)

Emerging Markets Telecom Strategist

Etisalat looks to Africa and India

Etisalat is set to expand it international footprint in the coming year as it explores opportunities in Africa and the Middle East while strengthening its position on the subcontinent from a sizeable cash pile. A recent report by the US bank JP Morgan estimated that Etisalat has more than US$16.4 billion (Dh60.23bn) in financial headroom for mergers and acquisitions. That calculation assumed that it can secure debt at 2.5 times its estimated EBITDA for next year and use cash reserves of about $2.9bn.

The UAE’s largest telecommunications company is seeking to acquire assets in at least two countries in Africa and a mobile phone licence in Syria, said Essa al Haddad, the Etisalat group chief marketing officer. “Syria is a fantastic market,” he said. “We’ve heard that the regulator is going to launch an invitation to bid [for a licence]. Definitely we are interested because it fits our strategy.”

The Syrian government has indicated that it will shortly be licensing a third mobile network operator following the expiration of two build, operate and transfer contracts. The company is still awaiting to hear back from Libya regarding its bid for a mobile licence in the country. Etisalat’s negotiations with Iraq’s Korek Telecom remain a “work in progress”, Mr al Haddad said. Last year was relatively quiet for Etisalat’s mergers and acquisitions team as its only purchase was that of the Sri Lankan operator Tigo for $207m. It bought stakes in six companies throughout the Middle East and Africa in 2008.

India has the potential to be a significant market for Etisalat, which is set to launch mobile services through its Etisalat DB subsidiary. The country has roughly 350 million mobile subscribers in a population of about 1.2 billion people. Only 10 per cent of the Indian population has access to mobile broadband, giving Etisalat an opportunity to leverage its technical expertise into offering a unique package to potential subscribers, Mr al Haddad said. The company will look to integrate markets where as many as eight other players operate, he said.

“We know that the market is ready and ripe for consolidation,” Mr al Haddad said while declining to specify which Indian telecoms firms it is negotiating with. He added that regulatory restrictions could hamper any potential acquisitions. Etisalat is interested in participating in an pending auction to acquire wireless spectrum for third generation, or 3G, mobile phone services. India will hold its 3G bandwidth auctions next month, an Indian government official said.

“Having the auction is one thing but having the spectrum itself is another,” Mr al Haddad said. “The issue that we have is the amount of spectrum licences available is up to how much the Ministry of Defence wants to release. “In some areas, there are only two or three licences and unfortunately, they are in areas with the highest penetration. This makes the picture a but more complicated.” Etisalat is also looking to expand in Africa and is targeting countries with a large population base with low penetration levels. Market observers said such moves would be come at a high price.

“Expansion outside the UAE market will be costly,” said Delilah Heakal, a telecoms analyst with Pharos Research. “To date, the completion of network rollouts remains under way in Etisalat’s international markets of operation. As a result, short-term profitability from international operations is likely to remain insignificant.” Ms Heakal estimated that Etisalat’s international operations will contribute 13 per cent of its profits and 23.8 per cent of revenues by 2014 compared with about 3 per cent and 12 per cent last year½-year period in consideration for “certain corresponding deliverables by the Pakistani counterpart”, Etisalat said last week.

Willy Gerard

Emerging Markets Strategist

 

UAE’s Etisalat expanding in Africa

29 February 2012

Arab Emirates leading telecommunications company Etisalat announced on Tuesday that it was boosting its capacity on Intelsat 22, to be launched next month in an effort to boost its presence in Africa.

The Abu Dhabi-based company said in a press release that the new multi-transponder agreement will “utilize the satellite’s capacity to expand the reach of its broadband and GSM backhaul services to its customers in the Middle East, Africa, Europe and central Asia.”

“As the leading provider of connectivity in the Middle East, Etisalat will now be able to expand the reach of its broadband and GSM backhaul services to new regions across the globe,” said Ali Amiri, executive vice president of carrier and wholesale services for Etisalat. “This important agreement will provide Etisalat with the capability to meet the growing communications requirements of our customers.”

The push into Africa has been a prime moving point for Etisalat already in early 2012. The company believes that it can offer more telecom infrastructure and mobile phone capacity in the African continent through its own offerings and expansive network that already spans three continents.

“We continue to work closely with premier telecommunications providers like Etisalat to help them expand their global footprint,” said Jean Philippe Gillet, Intelsat’s regional vice president of sales for Europe and the Middle East. “Intelsat 22 is the first of five satellites expected to launch in 2012 that will provide additional capacity over key regions like the Middle East, Africa and Asia.”

According to the companies joint statement, the new coverage will help boost its services in East Africa especially through the Indian Ocean, “which will blanket vital maritime and aeronautical routes.”

In addition, Intelsat 22 will have Ku-band capacity serving the Middle East and East Africa.

 

Willy Gerard

Emerging Markets Telecom Strategist