Considered Opinion

For about a year now, CommsMEA has included a poll question related to an aspect of regional telecoms sector with each of its fortnightly online newsletters. The responses we receive are generated from telecoms professionals across the region, and as will be revealed, some industry sentiments and forecasts are quite unexpected.

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By  Tawanda Chihota Published  February 4, 2007

|~||~||~|Over the last six months just under 400 industry participants have responded to a series of questions posed by the editorial staff at CommsMEA. As all responses are anonymous, informed individuals who have responded to the questions online have appeared uninhibited to offer their honest opinions on topical issues ranging from the launch of the second all-service operator in UAE, to the perceived risk/return analysis of investment in Iraq at this time. This is the first time that CommsMEA has compiled and released these findings in such a manner, and given the publication's position as the leading business-to-business monthly magazine in the Middle East, the responses offer a strong indication of the general sentiment of many of the influence brokers in the regional telecoms sector. Below, are a selection of poll questions asked by CommsMEA, together with a breakdown of the responses and a brief discussion of some of the implications of such responses. Q1 IS THE DIGITAL DIVIDE NARROWING, AND ARE THE EFFECTS OF THIS ALREADY BEING FELT IN DEVELOPING MARKETS? Date posted on www.itp.net: December 26, 2006 Results: 50% of respondents voted yes, while 50% voted no. Comment: This question was posed against the backdrop of the ITU Telecom World 2006 event held in Hong Kong at the beginning of December, which was themed “living the digital world”. The weeklong event highlighted the importance of emerging and developed markets alike in maximising the benefits of a connected world. Muhammad Yunus, last year’s Nobel Peace Prize laureate is a key proponent for the digital world lifting people out of poverty. His Grameen Bank micro-lending philosophy is transferable to other economic areas, and he outlined the creation of the ICT Empowerment Network, which is a joint project between Grameen Bank, the ITU, and technology suppliers such as Qualcomm and Cisco Systems to collaborate in bringing ICT solutions to poorer individuals. Q2 DO YOU BELIEVE GULFCOMMS 2006 WAS A SUCCESSFUL EVENT, AND SERVED THE PURPOSES OF THE TELECOMS SECTOR IN THE REGION EFFECTIVELY? Date posted on www.itp.net: November 28, 2006 Results: 61.11% of respondents voted yes, while 38.89% voted no. Comment: The inaugural GULFCOMMS event took place as part of the hugely popular GITEX annual show November 18-22, and marked the full recognition that telecoms, and IT within the telecoms sector have well and truly come into their own in the region. One of the striking elements of the show was the calm confidence exuded by the more than 130 exhibitors on hand within the Zabeel Hall, of their products and services, and the context of these offerings within the wider Middle East and Africa market. The exhibition was busy, as exhibitors mingled with clients, partners, business prospects and the general public, and the event in 2007 is set only build further on last year’s successful inauguration. Q3 DO YOU BELIEVE DU WILL LAUNCH COMMERCIAL SERVICE BEFORE THE END OF 2006? Date posted on www.itp.net: November 13, 2006 Results: 38.89% of respondents voted yes, while 61.11% voted no. Comment: Towards the end of last year, the UAE’s second all-service communications provider appeared to be under strain given its failure to make the type of progress it was hoping to. Failure to ratify an interconnection agreement with incumbent operator Etisalat only compounded problems, though in the New Year, the licensee appears to be growing in confidence. A commercial launch date of February 25 is now on the cards, and with a seemingly successful pre-launch number registration campaign, du’s fortunes appear to be turning. Q4 HAS ETISALAT’S CUSTOMER SERVICE IMPROVED GIVEN THE LOOMING ENTRY OF COMPETITION? Date posted on www.itp.net: October 25, 2006 Results: 43.18% of respondents voted yes, while 56.82% voted no. Comment: Given that the entrance of competition in the UAE will be based more on branding, coverage and quality of service (product differentiation), rather than price, the fact that more than half of all respondents believe Etisalat’s customer service has not improved drastically in preparation for competition should be alarming to the incumbent. Q5 HOW SOON WILL IRAQ GAIN POLITICAL AND ECONOMIC STABILITY? Date posted on www.itp.net: October 10, 2006 Results: 0% of respondents predicted between 1-2 years; 16.67% voted 3-5 years; and 83.33% voted more than five years. Comment: The question of Iraq’s stability is directly related to its ability to attract investment for the middle to long term given the security issues being faced in the country. The extension of the three temporary operating licences of the incumbent mobile operators is evidence of the level of uncertainty present in the market. Current extensions make the licences of Iraqna, Asia-cell and MTC Atheer valid until the end of March, but it remains doubtful whether the regulatory authorities will be ready with a new licensing dispensation at that time. Q6 ARE OPERATORS RIGHT TO BE CONSIDERING WIMAX AND 4G DEPLOYMENTS AT THIS TIME? Date posted on www.itp.net: September 21, 2006 Results: 65% of respondents voted yes, while 35% voted no. Comment: This question was prompted by developments in Pakistan, where in May, Wateen Telecom announced it had selected Motorola to be its primary supplier to plan, design and deploy a nationwide wireless broadband voice and data network in Pakistan utilising WiMAX technology. Q7 IS THE REGIONAL MARKET READY FOR SERVICES SUCH AS M-PAYMENTS? Date posted on www.itp.net: September 7, 2006 Results: 50% of respondents voted yes, while 50% voted no. Comment: At GITEX 2005, UAE incumbent Etisalat described its up-and-coming mobile-payments service that would allow for all variety of purchases using a customer’s handset. A year-and-a-half on and such a service is yet to be commercialised. Q8 DO YOU BELIEVE THERE IS A REQUIREMENT FOR A SECOND NETWORK PROVIDER IN QATAR? Date posted on www.itp.net: August 8, 2006 Results: 71.43% of respondents voted yes, while 28.57% voted no. Comment: Things in Qatar’s telecoms sector have proceeded quickly since this question was posed. In November, ictQatar announced plans to devise and publish licensing procedures that would effectively open the market up to competition this year. Qtel, the incumbent’s monopoly licence was originally set to end in 2012. Q9 DO YOU BELIEVE THE MAJORITY OF MERGERS TAKING PLACE IN THE MIDDLE EAST ARE BEING EXECUTED PROPERLY AND GOING ON TO CREATE VALUE? Date posted on www.itp.net: June 28, 2006 Results: 30% of respondents voted yes, while 70% voted no. Comment: There continues to be a propensity for M&A activity within the regional telecoms sector, and given the large amounts being borrowed and invested, it is somewhat alarming that the majority of respondents believe long-term value will not be extracted from the deals taking place. Q10 ARE INTERNATIONAL ROAMING CHARGES SIGNIFICANTLY HIGH AND SHOULD THEY BE SUBJECT TO REGULATORY SCRUTINY? Date posted on www.itp.net: June 14, 2006 Results: 97.56% of respondents voted yes, while 2.44% voted no. Comment: VoIP had been viewed as a viable alternative to the prohibitively high cost of making international calls from the Middle East region. However, the issue of the third-party provision of VoIP calls has been a burning one, with regulatory authorities in countries like Jordan and Bahrain accepting this as a natural progression of the communications industry, while others like the UAE’s TRA takes a much harder line on the use of the technology. Etisalat and du are the only operators permitted to provide VoIP services, with third-party providers shut down. ||**||

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