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CommsMEA asks Mohammed Al Ageel, chairman of the GSM Association’s Arab World group (right) about the main issues confronting regional mobile operators, including regulation, raising penetration, creating interest in new services and facing up to threats from rival standards.

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By  Richard Agnew Published  September 27, 2004

|~|ageel1.gif|~||~|CommsMEA asks Mohammed Al Ageel, chairman of the GSM Association’s Arab World group (right) about the main issues confronting regional mobile operators, including regulation, raising penetration, creating interest in new services and facing up to threats from rival standards.

CommsMEA: What are the main items on GSM Arab World group’s agenda for the next few months?
Mohammed Al Ageel: Our main objective is to promote the GSM family of technologies in the Middle East and to encourage roaming relationships and experience sharing between the region’s mobile operators. When the group was created, it just focused on encouraging roaming relationships between operators. Then we were asked to look into how to educate operators on how to deploy new services, to allow them to share experiences, and to look into regulatory issues. Our main focus lately has been to focus on data services, including the deployment of MMS, GPRS and 3G in the region.

CMEA: Is there a business case for deploying 3G in the region yet?
MA: From my own perspective, I don’t think there is much prospect for 3G in the region for the time being. Mobile penetration is very low — only 13%. So 87% of people aren’t even using basic voice services. I don’t think that 3G will be feasible in the region before 2007 or 2008. For the moment, operators will try to get as much as they can in terms of market share and fulfill the current requirements of users. At the moment this is basically voice.

CMEA: Many operators seem to be more focused on protecting their ARPUs than raising penetration though. How can increased penetration come about while allowing mobile operators to remain profitable at the same time?
MA: From the information I have, there is a lot of variation in the pricing and packages of operators in the region, and some operators could be able to increase the market if they reduce their prices. But as you know, 20% of consumers contribute more than 80% of revenues, so some operators are concentrating on them. If you look at countries like Egypt, they don’t have a very high penetration rate. Operators need to focus more on the youth market, especially in the Arab region, as well as reducing their prices and targeting and segmenting the market, to see what the needs of the customers are.

CMEA: Many operators have been reluctant to subsidise handsets in the region — would that model work or is it too risky?
MA: In the Gulf, it would be very risky because consumers change their handsets frequently. It may work in countries like Egypt, Syria and maybe Jordan because users change their mobiles every one or two years, but in the Gulf it wouldn’t work.

CMEA: With an iDEN network being launched in Jordan earlier this year and a CDMA network being deployed in Yemen last month, which standard poses more of a challenge to GSM?
MA: The iDEN network will try to target certain government sectors in the Kingdom, as well as other businesses. But it’s only for push to talk, and GSM operators are introducing push to talk over GPRS to compete with iDEN. As for CDMA, I don’t think it will have a very strong future in the Middle East.

CMEA: Will the Mobile Value Added Service Alliance announced recently by Qtel, MobileCom, Batelco and Wataniya have a tangible impact on consumer demand for data services?
MA: I think it will work. They are all very good at developing value added services. The only thing is that they will have to be very focused and work out which value added services will be the most convenient for their customers.
Many mobile operators just take their services from a benchmark and try to sell them on to customers. But this approach doesn’t work because every region’s consumers have their individual needs and requirements, and you have to develop specific applications to serve them.

CMEA: What do you think are the main regulatory issues facing mobile operators in the region?
MA: Regulators are [focusing] deeply on improving services, like value added services, rather than giving the operators the opportunity to do whatever they can to serve customers. In Jordan, for example, Fastlink is not being allowed to launch push to talk because the regulatory authority awarded the licence to allow Xpress to launch its iDEN network. This is the main problem. In this way, regulators will control operators but the speed of deployment of services to customers will be very slow. There will also be conflicts between regulators and operators and a lot of sensitivity. I’ve seen this in many countries in the region.
One thing [being promoted] by the GSM Association is to just give operators a licence and allow them to do what they want to do. Part of our charter is that we try to bring these new ideas and allow people to look at things from a new perspective.

CMEA: Is there also a danger of over-licensing in some countries in the region?
MA: Regulators have to look at not allowing as many operators [instead of assuming] that the market has the potential to support them. Sometimes there is low penetration but there isn’t a feasible market. Looking at penetration is not enough — regulatory authorities need to look at the GDP of the country as well. I’m sure that regulators are not missing this. But there are problems now with regulators that are trying to sell as many licences as possible and get a percentage of revenues from those licences.

CMEA: Has enough progress been made with GPRS roaming in the region?
MA: There is a need for more agreements. But the problem is that GPRS usage is still very low — customers don’t see the value of being connected to the internet while moving around. That’s a problem everywhere, not just in the Arab countries but also in Europe and elsewhere. GPRS roaming is a service that provides a luxury for subscribers that roam. But before they offer it, mobile operators have to increase the number of subscribers that use GPRS. Etisalat has launched GPRS roaming, while Saudi Telecom is close to doing so. It will offer it before November.

CMEA: What will be the main driver for GPRS then, if it’s not email and higher speed internet?
MA: I think that push to talk will be a major driver. Customers will be able to use push to talk technology on GPRS for basic walkie talkie services.

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