Is the time finally right for 3G in the MEA?

Al Jawal has commercially launched 3G services in Saudi Arabia. Previous Middle East 3G launches have seen negligable end-user interest, with few actual dedicated applications. Will this be yet another?

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By  Tawanda Chihota Published  May 30, 2006

|~||~||~|The surprise announcement by STC's Al Jawal last month, of its commercial launch of 3G services in Saudi Arabia is reminiscent of the similar announcement made by MTC Bahrain back in December 2003. MTC Bahrain had been jostling with Etisalat over which of the two operators would become the first to launch 3G commercially in the region. It was an accolade that grew to become somewhat of a dubious one given the generally apathetic attitude towards 3G by end-users, which in turn culminated in relatively low uptake. Al Jawal has been pitted in a similar race to launch commercial 3G services with its domestic rival Mobily. Interestingly, up until Al Jawal announced the commercialisation of its own 3G network, Mobily was the operator that appeared to be at a more advanced stage in terms of opening the new network to the public. Now that Al Jawal has won the race, the expectation is that the operator now needs to use the network as a basis for the launch of applications and services that will actually drive usage and in turn generate a decent return on investment. Etisalat's incoming CEO, Mohammed Al Qamzi is refreshingly honest in his assessment of the development of 3G services in the UAE. He admits that the operator launched the service with little content available to inspire usage. In the face of looming competition, however, Etisalat appears to finally be beginning to view its 4 million subscriber base as more than a single, homogenous mass; rather as a number of segmented groups, which each have distinctive characteristics and outlooks. Mobily, as the new entrant in Saudi Arabia, prompted a similar change in attitude from the incumbent Al Jawal, resulting in the introduction of innovative services and applications by both operators, which are offered at an increasingly competitive price by both players. Mobily celebrated its first full year of operation on May 25, a period in which it has been able to consistently add approximately 10,000 subscribers every day of that year, to total 3.83 million users at the end of the period. This strong expansion has prompted aggressive moves from Al Jawal, which, positively, go beyond the offer of simple price discounts. In the past 12-18 months, Al Jawal has improved its communication with subscribers and has started to market products that really do capture the imagination. A service that permits a subscriber to apply for an additional two SIM cards that utilise his original number is a convenient solution in a multiple device environment. It is thus likely to appeal to corporate users and enterprises, helping the customer retention efforts. Al Jawal also has a suite of location based services, ranging from 'nearest landmark' services, through to 'locate a friend'- type services. Other progressive steps taken in the Saudi market include the reduction in the cost of international rates, the offer of friends and family concessions and the ability to transfer balance, over-the-air from one account to another. With operators such as Kuwait's Wataniya having also made the move to 3G, and the planned launch of the service by other players in the region such as Qtel, it will remain important that what is communicated is not so much the access technology itself, but the powerful new services it enables. Wataniya has used this differentiation to great effect, particularly now as it actively pursues the offer of tailored services to enterprise market. Keith Cornell, CEO of messaging platform provider Empower Interactive believes that the timing for the uptake of sophisticated data services in the region is perfect given the confluence of a number of factors including liberalisation and the maturity of some markets. The desire to segment subscriber bases and offer tailored services are priorities to incumbent and greenfield operators alike. Service-orientation is likely to be the key to success driver, and as Cornell puts it, there is not one killer application, the killer application is having thousands of interesting things. ||**||

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