Rising to the Challenge

At the end of June, the already competitive Jordanian telecoms sector saw the commercial launch of the kingdom’s third GSM operator, Umniah Mobile Company. Despite the small addressable market, veteran telecoms personality and Umniah managing partner, Michael Dagher, sees potential for his company.

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By  Tawanda Chihota Published  August 7, 2005

|~|Dagher200.jpg|~|Michael Dagher forecasts that Jordan's mobile penetration rate can grow to 50% within the next five years.|~|Industry commentators continue to voice their doubts over the chances of survival faced by the kingdom’s latest GSM entrant, Umniah Mobile Company, given the already tight mobile communications market in Jordan. “Sure the market should dictate the level of competition and not the regulator, but licensing a third GSM operator for this market may have gone a little too far,” an Amman-based public relations manager says. Michael Dagher, managing partner of the new outfit has a story he likes to tell when people who doubt the prospects of his company confront him. “…Prior to the issuance of the third licence to Umniah, do you know that the incumbent operators (Fastlink and MobileCom) paid the government almost US$120 million to delay or suspend the issuance of the third mobile operating licence, Dagher reveals. “If they did not believe that the market potential is significant, why would they pay US$120 million?” he asks. With less than 2 million GSM subscribers servicing a total population of fewer than 6 million inhabitants, Dagher views expansion of the country’s subscriber base beyond the 50% penetration mark as the driving ambition of the start-up. Despite having spent four years between August 1999 and 2003 as the managing director of leading GSM operator Fastlink, Dagher has no comforting words for his competitors and the manner in which they have presided over the cellular sector to this point. “Penetration in Jordan is where it is today because of the cosy duopoly that had been created by the incumbents,” Dagher says. “…We saw significant stagnation [in the market] between 2003 to 2005, and before the issuance of the third mobile licence,” he adds. As part of its strategy to stimulate further market growth, Umniah is obviously pushing pricing very strongly, and the operator makes no apologies for what it terms as giving greater value to end-users. The operator has already become the first GSM operator in Jordan to introduce per-second billing, and has introduced an array of tariff plans aimed at segmenting the market and focussing on attracting subscribers from its core user base of the Jordanian youth market. “We believe the youth segment; particularly students, have not been properly serviced by the incumbent operators, Dagher suggests. “In addition to that, we believe the mass-consumer prepaid market is clearly a large segment of this industry, it is almost 80% of the addressable market and we intend to pursue that market,” he adds. The fact that the incumbent GSM operators are modifying their own tariff packages in response to Umniah’s is something that Dagher takes to mean his company is going about things in the right manner. Outside of offering competitive prices, Umniah believes that its management credentials together with its focus on the delivery of services and products will also help differentiate it in the market place. The operator launched with nationwide EDGE coverage and is currently in discussions with the regulator regarding the introduction of services over WCDMA infrastructure. ||**|||~|Suleiman200.jpg|~|Maani believes iDEN will remain a first choice amongst business users.|~|Being a new network, it comes with no legacy issues and the operator’s infrastructure is based on soft-switch IP mobile telephony, offering end-users easier access to data services. “We believe the customer is ready to be offered per second billing, which is another differentiator in the market vis-à-vis the cost structure. [Then] add to this attractive products and services through the technology we are deploying,” Dagher comments. “We deployed a ring-back tone, which did not exist in the marketplace [and] we are deploying other products – USSD (Unstructured Supplementary Service Data) and video streaming, which do not exist in the market place,” he adds. Sharing the burden of making an impression in Jordan’s mobile communications sector is iDEN operator Xpress, which launched in June last year. The operator has an estimated subscriber base of 60,000 and while the service is not in direct competition with GSM, developments occurring in the GSM space have a knock-on effect on its own business. Fastlink, MobileCom and Umniah have all spoken about their desire to launch push-to-talk-over-cellular (PoC) services, a development that would impact any moves by Xpress in the consumer push-to-talk space. “We are satisfied with the progress we have made to date,” comments Suleiman Maani, chief executive of Xpress. Last October XPress signed a US$54 million loan guarantee with the US-based Export-Import Bank to finance the construction of its network in Jordan, and the deal was considered the first export credit agency project financing in the telecommunications sector in the country. Maani believes that Xpress’ strong focus on the business sector is the services’ key differentiator and that PoC does not have the technical specifications to compete with iDEN in terms of business critical services. “There are latency issues when it comes to PoC so that means there are time delays in establishing the connection and further delays in communication once the connection has been established,” Maani explains. While such delays may be acceptable in a consumer environment, Maani believes these are not acceptable in a commercial one. The development of added features such as international iDEN, which is already available across North and South America, enabling subscribers in one country to conduct a one-to-many live call to subscribers in another country, are also expected to widen iDEN’s appeal in the region. Bravo, and iDEN operator that shares common shareholders as Umniah was launched in Saudi Arabia last month, and synergies between the two networks are expected. ||**||

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