Testing Times

This year will see a fourth operator enter Jordan’s mobile sector, but Mickael Ghossein, chief executive officer of Mobilecom, says that the Kingdom’s smallest GSM provider won’t be a pushover.

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By  Richard Agnew Published  January 30, 2005

|~|mick1.gif|~|Mickael Ghossein, Mobilecom's chief executive officer.|~|2005 will undoubtedly be Mobilecom’s toughest since the mobile operator entered the Jordanian GSM sector four years ago. Subscriber growth rates in Jordan are falling, while competition is increasing. The Kingdom should see Umniah, its third GSM network, launched in the next few weeks, following the entrance of trunked radio operator, Xpress, last summer. And as the smaller of Jordan’s two current GSM providers, Mobilecom accepts that the coming months will see the robustness of its network and business model really put to the test. Unsurprisingly, the operator has therefore spent considerable effort in the last few months on upgrading its infrastructure and reducing its susceptibility to churn — a move which it claims is already paying dividends. The operator says that it generated a 28% jump in subscribers last year to 455,000, helped by customer care improvements, the adoption of EDGE and new pricing schemes. 2004 also saw it link up with Wataniya, Qtel and Batelco to encourage mobile value added service (VAS) adoption across the four regional operators’ networks, and benefit from key reductions in rival, Fastlink’s interconnect rates. “2004 was a great year for Mobilecom,” says Mickael Ghossein, the operator’s chief executive officer. “The company became profitable and our revenue growth was between 20% and 30%. We were one of the first companies in the Middle East to introduce EDGE, and the VAS Alliance will be good for us all,” he adds. While Fastlink chose to argue aggressively against the introduction of Umniah, Ghossein says that Mobilecom has been knuckling down and focusing on its own preparedness instead. “The introduction of the third operator was not necessary, especially when you have a small market of around five million inhabitants and an average GDP per capita of around US$1700 per year. But when you’re an operator in a country you should accept the [government’s] strategy. Now, we should [adapt] our own strategy in a clever way to focus on the competition,” he adds. With Umniah certain to focus on undercutting the incumbents, much of Mobilecom’s recent improvements have leaned towards the area of pricing. In December, the operator launched an aggressive, flat-rate offer, allowing its subscribers to have unlimited free calls to three people also using its network, as well as discounted calls to additional Mobilecom subscribers and fixed lines of its parent company, Jordan Telecom. Ghossein also says that the operator is ready to introduce per-second billing, a key differentiator for cost-conscious users. “We will do this soon; certainly before Umniah launches,” he adds. These moves, Ghossein says, will also be followed up by reductions in international call rates — both to counterbalance the recent opening of Jordan’s fixed telephony market and to preserve the inclination of expatriates to use prepaid mobiles to make calls outside the country. Indeed, both mobile operators have already made moves to take advantage of the opportunity to lower their international costs. While Fastlink says it will have an independent international gateway licence in place by May of this year, Ghossein is pushing for a renegotiation of the charges it pays to use Jordan Telecom’s facilities. “If people can use voice over IP and pay US$1 for one hour of calls, it will be very hard to compete as a mobile operator — unless we have a good deal with the fixed operator. I believe that Jordan Telecom is ready to do a good deal — we are affiliates and it will now have to fight with the competition,” he adds. With the entrance of another player into the market, however, Jordan’s operators are also looking for new ways to differentiate themselves and reap revenues from services beyond voice. Mobilecom, for example, upgraded its mediation and rating platform last year to allow it to attach different charges for its content-based services — which were expanded recently with the launch of SMS breaking news from Al Jazeera. It also plans to start testing its push to talk solution this month. The introduction of EDGE is another sign that the operator is looking to ramp up the revenues it generates from subscribers accessing data services, although EDGE-compatible handsets remain scarce in the market. After reviewing the traffic generated from its GPRS services, the operator decided to implement EDGE in only 30% of its sites. However, it has already struck a deal with Jordan Telecom which will use the network to provide internet connectivity to rural areas as part of an initative by the fixed operator and government to connect 3200 schools with its broadband network by 2006. “Jordan Telecom has a big project to connect schools but it is very expensive to dig roads to implement cables,” says Ghossein. “Today, we have some sites that are near schools and it’s easier to implement EDGE. We have finalised the feasibility [studies] from a technical point of view and it should be done in the first half of the year,” he adds. Considering the size of the operator’s subscriber base, however, the VAS Alliance could be Mobilecom’s key weapon to unlock mobile data revenues by creating economies of scale for application developers. Ghossein says that common short codes will be implemented by the four operators shortly, and a meeting in mid-February will see them finalise their plans for joint development of content. “Today, we have around 30% of our network EDGE enabled [but] there is some concern in the market over the availability of EDGE handsets and content,” he says. “During March, we will have more good content on the market. [But] EDGE will be operational at a good level — meaning we will start to make money from it — in June 2005, not before,” Ghossein adds.||**||

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