Ready for Action

With Jordan announcing plans for a third mobile operator, Mickael Ghossein, Mobilecom CEO, says the company is ready for additional competition

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By  Richard Agnew Published  November 2, 2003

|~||~||~|The long-anticipated announcement by Jordan's regulatory authority that a new entrant will be brought into the mobile market next year has thrown the spotlight on Mobilecom, the Kingdom's second largest operator, and it's ability to deal with additional competition.

The Telecoms Regulatory Commission's (TRC) plans, announced in mid-October, are aimed at sharpening competition in the sector and incentivising the incumbent operators, Mobilecom and Fastlink, to improve their services and pricing. However, the move has also caused observers to argue that growth in the market is slowing and the newcomer will negatively impact on the existing players.

Nevertheless, Mickael Ghossein, Mobilecom's CEO, asserts that the operator is strengthening its ability to weather the impact of the new entrant, which is scheduled to be awarded a licence to operate in Jordan in March or April, 2004.

Since it entered the market three years ago, the operator is perceived to have struggled to build market share. However, Mobilecom now claims to be approaching profitability and is making further efforts to boost its call centre and marketing operations before the newcomer arrives.

"The main [way] we can differentiate ourselves is to deliver a very high quality of customer care services," says Ghossein. "We receive about 150,000 calls per week [and] our target is to increase the calls answered by our people, to offer a high quality [of] information, to know the customer's history and increase subscribers," he adds.

To help it achieve this, Mobilecom will make a decision before the end of 2003 about whether to outsource its call centre operations to Jordan Telecom (JT), its parent company.

JT set up its call multi-channel customer centre arm earlier this year to attract business from third parties, and Mobilecom could use it to source additional capacity in peak hours and perform targeted marketing campaigns or research. "Our centre could be in Mobilecom's premises or through JT. It would be transparent for the customer [and introduce] high performance and cost efficiencies," Ghossein says.
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Recently, Mobilecom also invested in an EMC storage infrastructure solution, as part of the implementation of a new business continuity strategy. The Symmetrix DMX system, which will be deployed by STME and its local partner, IDEAL, will be used by the operator to manage its customer records and financial data.

As part of the upgrade, Mobilecom also plans to install a remote disaster recovery site to protect business critical information should downtime occur. "Mobilecom now generates a huge amount of data - ranging from billing details to business intelligence. In a competitive sector, we have to ensure that our customers are given the best possible service. We cannot afford to have any unplanned downtime," says Ghossein.

But with the new operator expected to focus on advanced services and possibly roll out a 3G network to differentiate itself from the incumbents, Mobilecom admits it will also have to work on improving its own service offerings over the next few months to help reduce any churn.

"The new operator should come [to Jordan] with new services, something extraordinary," says Ghossein. "It [needs to be] powerful in terms of marketing and should [exploit] Fastlink's and our weaknesses," he adds.

Mobilecom has had mixed success with its mobile data offering so far, but it is now planning to source more content from Wanadoo, France Telecom's ISP arm, in a bid to boost its data traffic.

"We have found [content] suppliers and sometimes we [have] fired them because they [have] not been good quality. [Now,] we will take advantage of France Telecom's portal - of course, it is European content, but there is a need for that because the Jordanian population is highly educated," Ghossein says.
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Ghossein cannot say how many MMS subscribers the operator has, saying that this is because it doesn't charge monthly fees. However, the operator is looking to attract more users by agreeing MMS interconnection with Fastlink. This will allow messages to be sent across networks. "We hope to have interconnection by the end of the year," Ghossein says.

These measures, it is hoped, will help the operator to attract more subscribers and increase the proportion of contracted users.

Post-paid users currently comprise 25% of the operator's total base, which Ghossein says is nearing 350,000. "We hope in time to have 40% post-paid [users], they are [more] loyal and they will use more of our services," he adds.

Mobilecom, nevertheless, is widely perceived to have struggled to take high-value customers from Fastlink and has become bogged down in various legal disputes with its rival. The latest of these centred on accusations that Fastlink had been involved in industrial espionage. But it is argued that the introduction of a third mobile operator will prompt regulatory changes which could help Mobilecom compete more effectively.

Although calls have been made for the government to offer the new licencee national roaming on the country's existing networks, to give it a headstart, the government claims that there is a sufficient level of interest in the licence to make it ensure that the new operator will build its own infrastructure.

This would mirror the decision of MTC-Vodafone to start operations with its own network in Bahrain later this year, despite being offered national roaming.

Two of Mobilecom's main bugbears - interconnection fees, which have squeezed its margins on cross-network calls, and Jordan's numbering structure - are also currently being reviewed by the TRC.

"The regulator is working on an interconnection regime that will get rid of some of the inefficiencies of the duopoly," says Dr. Fawaz H. Zu'bi, Jordan's Minister of ICT. "The advent of the third operator will help with that [and] there is a plan to adjust national numbering to [create] a more favourable situation," he adds.
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Despite the claims that the introduction of the new operator will hurt the market, the TRC argues that there is still ample room for growth.

While the Kingdom's mobile sector expanded by 132% in 2001 and 46% in 2002, the research house, Arab Advisors, expects growth to come in at only 13% this year. However, it also predicts that the market will continue to expand at a compound annual growth rate (CAGR) of 15.48% between 2002 and 2007.

The government is also predicting a rise from from 22% penetration now to 50% over the next ten years, and claims that attracting users under 18 - a high proportion of the Kingdom's population - will be key to this growth. "The youth market is yet to be tapped. A large proportion of the population is under 18 and will be coming of age over the next few years, so the potential is there," says Zu'bi.

However, Fastlink's healthy user base of over 900,000, combined with the further introduction of a digital trunking operator in 2004 to target the corporate sector, and Mobilecom's progress towards profitability, will ensure that the new operator will not have an easy ride.

"We have had very tough competition between the two operators," says Ghossein. "After three years and spending around JD200million (US$250million), we are [only] starting to break even. [The new entrant] will maybe take 10% [share], but the question is whether [it will be] a viable operator? My answer is no," he adds.
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