Virtual race

i2 outlines its aim to become a powerful force in the region's nascent mobile virtual network operator (MVNO) sector.

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By  George Bevir Published  October 12, 2008

i2 outlines its aim to become a powerful force in the region's nascent mobile virtual network operator (MVNO) sector.

In October last year, i2 CEO Abdul Hameed Al Sunaid said he hoped to start operations in Jordan at the start this year, but the launch was delayed due to "technical" issues. November is now given as a "firm" launch date, unless it suffers from another round of technical problems.

If it does launch in November, i2 stands a good chance of taking the accolade of being the first MVNO in the Middle East. Aside from the prestige of the title, it would give the UAE-based retail and distribution firm a head start over its rivals.

We’re ready to go with the Jordan MVNO – we have the infrastructure in terms of distribution, retail, customer base, content, applications – we’re ready to move. But there’s nothing we can do at the moment, it’s with the regulator.

One such competitor, Friendi, hopes to beat i2 to market when it launches in Oman, which it hopes to do by the end of this year.

And Friendi will go head-to-head with i2 in Jordan, with boss Mikkel Vinter saying that he hopes to launch an MVNO in Jordan "soon", after securing the operator's licence earlier this year in March.

Jordan should provide both i2 and Friendi with ample opportunity, as it is one of the few countries in the Middle East that still has a sub-90% penetration level.

Youth market

Al Sunaid has set i2 a target of 300,000 subscribers which he hopes to sign up within the next two to three years, with a strategy of targeting young people in Jordan. "The package we are working on in Jordan, it will be targeted at the youth. Content, type of handset we bundle for them, the tariff - all this," he says.

Many MVNOs around the world have built up a subscriber base by targeting expatriate communities, and Al Sunaid says this could be an option for i2.

"We have nothing planned at the moment, although Jordan has a Chinese community which is good to be targeted, but I think we will target the youth first and make sure we are successful in our first objective and then move to our second one," he says.

Al Sunaid highlights distribution as one of the key factors in establishing a successful MVNO, and with such a strong retail presence in i2's home nation of Saudi Arabia, Al Sunaid is keen to launch an MVNO in the country.

"We're ready to go with the Jordan MVNO - we have the infrastructure in terms of distribution, retail, customer base, content, applications - we're ready to move," he says. "But there's nothing we can do at the moment, it's with the regulator. Normally it takes three years after the third licence. The third licence was [granted] last year, so I think Saudi will be another two years maximum to open the MVNO. They have to give room for the third operator to get market share."

"There will be a lot of blood. So many people are waiting to move into Saudi and put a lot of money in, so I have no idea what will happen, I have to wait and see - but I know there will be a lot of blood."

Al Sunaid says i2 has a strong relationship with the Saudi regulator, but he makes it clear that he does not expect to be dealt any favours.

"The TRA in Saudi is a very transparent organisation, so you don't need to have a good relationship with them. They are very transparent and they know exactly what they need to do - everything is in public and it's very clear."

Much less certain is when an MVNO is likely to be given the green light by the regulatory authorities in the UAE, where i2 is headquartered.

"There is nothing clear about the UAE, and I don't think there will be anything soon. I haven't heard anything about the MVNO in the UAE," Al Sunaid says.

European expansion

As well as expanding into the sphere of virtual telecoms operator, i2 is continuing to extend its distribution footprint. Last month it announced that operations had begun in Pakistan, where it has two warehouses and 40 employees.

Al Sunaid says the business has "no plans at the moment" to move into neighbouring India, and will concentrate instead on growing in Pakistan.

"If you look to Pakistan it's a huge market by itself - it's over 150 million population. I think India is a bit soon for us. We're not considering it at the moment, but maybe after two years we can consider moving into India."

One part of the globe he has set his sights on is Eastern Europe, with plans for more i2 retail stores.

"The only way to penetrate Eastern Europe is through the franchise model. I think within a year we will be ready to have a franchise model to roll out and to give license to other countries," he says, adding that stores would have the same logo, same brand and same products as the digital concept stores in the Middle East and other territories that the company is already present in.

When asked which countries, Al Sunaid says "all the countries that are not yet developed", with Ukraine and Bulgaria highlighted as two countries that are ripe for franchises.

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