The Next Level

Yet to open its MMS and 3G infrastructure to third parties, Etisalat is relying largely on person-to-person traffic to generate revenues for its next-generation mobile data services. But the UAE monopoly operator is planning a total revamp of its service delivery platform this year that it hopes will secure long term return on its investments.

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By  Richard Agnew Published  March 28, 2004

|~|etisalat1.gif|~|Saleh Al Abdooli, manager, engineering, mobile system, Etisalat.|~|Since its high-profile launch of 3G in December 2003, Etisalat has connected only around 3000 subscribers to the network. Compared to the rapid uptake of MMS subscriptions that forced the monopoly operator to halt new connections only a few weeks after unveiling the service last summer, 3G has been distinctly less high-speed. Nevertheless, the operator believes that its technology-led approach to 3G will prove the correct one. In the short term, it argues that the availability of the service will persuade handset providers to allocate more 3G phones for the UAE, allowing it to tap into immediate pent-up demand. Additionally, it is planning a far-reaching revamp of its mobile service layer that will enable content providers to tap into its 3G and MMS infrastructure and advance the market in the longer term. The complex task of installing the service delivery platform (SDP), presented to Etisalat’s community of content providers recently, is scheduled to finish by the end of this year. “We have introduced 3G with a few applications such as video calling and high-speed mobile internet access, but we only consider this to the first wave,” says Saleh Al Abdooli, manager, engineering, mobile system, Etisalat. “The most important thing for Etisalat to do is to enrich 3G. [Through the SDP,] content providers will have an interface to our network, and their applications will be compatible with our platforms. They won’t have to worry about the technology Etisalat is using and they can concentrate on [developing] their applications. When they are ready, they can be hooked to our network and within two days [the provider] can offer the application [commercially],” he adds. The idea behind the SDP is to provide a platform that will allow Etisalat to sustain a wider and more diverse set of data applications, reduce services’ time-to-market and create demand for 3G in segments beyond the UAE’s early adopters. Etisalat plans to integrate individual elements of the platform in phases, using different vendors and its own engineers. Each part of the platform will cover separate aspects of the ‘mobile service lifecycle’ including content development, digital rights management, billing, settlement, fraud management and provisioning. “This will be our main challenge this year,” says Abdooli. “Etisalat will [perform] the integration and interoperability between all these platforms, but we will have different elements [from] different suppliers. This will happen in phases but the complete platform will be ready by the end of this year,” he adds. Although it is not yet clear when third parties will gain access to the platform or Etisalat’s MMS infrastructure, the move has been welcomed as one of the first signs of an aggressive attempt to foster content development by the operators in the Middle East. “The challenge today is that the 3G market is not yet ready, because subscribers don’t see the right content,” says Mahmoud Sherif, network and service providers manager, HP Middle East. “The operators have been a little reluctant in this area, and are waiting for demand to [emerge] from the market rather than digging into it. Unless it’s being driven by the operator or a strong service provider then [content development] will be very difficult to pick up, and that’s what Etisalat is trying to do,” he adds.||**|||~|etisalat2.gif|~|Etisalat has received commitments from manufacturers to increase the supply of 3G handsets|~|Once implemented, the move will allow the operator to centralise the administration and aggregation of its mobile content, as well as billing, profiling, security and other aspects of service creation and delivery. Content developers say it will also simplify the task of plugging into the operator’s network. “The SDP is a pretty rigorous plan,” says Ivan Fernandes, managing director of UAE-based mobile software developer, Ducont. “It will aggregate all the data bearers, from 2G to 3G, so that we will not have to bother about the end customer's device and the best mechanism of delivering the content, which we currently need to do. It will really help the providers to aggregate their content more efficiently than today, and Etisalat to have a much better variety and quality of services,” he adds. While freeing the operator from responsibility for service development, the plan would also, in essence, help create a more viable business model for local developers looking to access Etisalat’s mobile subscriber base and offer their services. To supplement this, the operator has outlined a range of revenue-share packages that it hopes will secure buy-in from third parties. Increasing the share of revenues allocated to content developers has long been seen as the key to enabling providers to invest a greater amount in development. “What mobile operators are contemplating now is that it is virtually impossible for them to develop the content themselves. And unless they provide decent incentives for the providers, no-one is going to start providing content either,” says Mohsen Malaki, senior telecoms analyst, IDC CEMA. Although Etisalat disclosed that it would offer up to 65% of earnings to some of its partners at its launch of MMS last year, the operator wouldn’t say whether it would increase this share for some packages once the SDP has been launched. But it says it will offer a range of different options depending on the extent of its role in helping develop and launch a particular service. “We will be very flexible,” says Abdooli. “It will depend on the content providers themselves and how much effort Etisalat has put into each application. Sometimes we will be very actively involved, customising, building and provisioning the content. But if the provider just wants a pipe, then our revenue share will be low,” he adds. In parallel, Etisalat intends to increase the range of options for third parties with the launch of further technologies to support mobile services over the next few months. A greater availability of content may spur Etisalat to launch location based services commercially this year, while the operator says it is planning to launch push-to-talk over cellular for subscribers by the time of the Gitex Dubai exhibition in October. “We have had a trial of location-based services [running] for two years and are waiting for good content, [but] I think we will be offering something by the end of the year. [The system] we have now is based on cell ID but we are trying to [open] more options for the content providers, based on assisted GPS (A-GPS) and other technologies,” adds Abdooli. By that time, the operator also hopes that its 3G subscriber base will have increased as more handsets come into the market and the coverage of its network is expanded. The first phase of the roll-out of its 3G infrastructure, being supplied by Huawei Technologies, was set to be complete by the end of March, covering key areas in the main cities of the UAE and creating capacity for up to 160,000 subscribers. Further expansion is scheduled to begin later this year. “Phase two will see us continuing to increasing our coverage and capacity and making the network continuous across most of the cities, not only the main [ones],” explains Abdooli. A further positive indicator is the commitment Etisalat says it has received from four vendors — Sony Ericson, Sanyo, Motorola and Siemens — to increase the amount of handsets available in the market to 50,000 by June. “We are bringing more shipments into the UAE in the coming weeks and will be participating in a big promotion with Etisalat [this month],” says Patrick Mulligan, general manager, personal communications sector, MENA, Motorola. “We will have as many phones in the market as the market needs. But the size of the market depends on Etisalat — how it drives the service and the network coverage it is able to offer,” he adds. But despite the greater availability of handsets and the hunger for new technology in the UAE that has driven Etisalat’s MMS subscriber base to 280,000 since its launch last summer, Etisalat still has the task of ensuring 3G’s long term success. The key to this, the operator says, will be its ability to get the SDP online. “Being the leader brings a lot of challenges,” says Abdooli. “There are technical problems that have to be solved. But we have been able to overcome most of these obstacles and have the chance to experience the demand of customers and be put on the map for manufacturers and content providers. We are not only looking for hundreds of applications, we are looking for thousands. That is what will give us the edge,” he adds.||**||

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