Out of the shadows

Fixed and mobile operators are increasingly coming to recognise that they can benefit from opening up access to VoIP services. Roger Field speaks to Skype’s Middle East and Africa head, Rouzbeh Pasha.

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Out of the shadows
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By  Roger Field Published  March 2, 2010 Communications Middle East & Africa Logo

The fear that Skype instills in traditional telecom operators is perhaps most evident from the number of operators that try to restrict access to the service.

But despite being viewed as a harbinger of lost revenue by many operators, a growing number of telcos, both fixed and mobile, are coming to view the world’s leading voice over internet protocol (VoIP) player as an unlikely ally in the battle against churn and the drive to generate more data use.

In the Middle East especially, Skype has been viewed with deep suspicion by incumbent operators afraid of losing lucrative international voice minutes to the software company.

In the Middle East and Africa, access to Skype and other VoIP players remains blocked in the UAE, Oman, Kuwait and Ethiopia. In the UAE, access to Skype was restricted by the telecom regulatory authority (TRA) in October 2006, and while there have been a number of statements from the regulator about liberalising VoIP services since then, there has been little sign of a change of direction.

Most recently, Mohamed Naser Al Ghanim, director general of the UAE’s TRA’s hinted that a new policy to allow VoIP calls would be allowed, but gave no timeframe or indication that companies other than Etisalat and Du would be able to offer VoIP.

It is perhaps unsurprising that the appearance of VoIP around 2003 led to some extreme measures on behalf of traditional telecom operators, given its rapid growth.

For Skype, the past couple of years in particular have seen strong subscriber growth, according to Rouzbeh Pasha, head of Skype Middle East and Africa.

“We have grown quite substantially during the last couple of years. In 2009 alone we grew with 160 million new users,” he says. “In 2008, we were representing 8% of total international communication traffic according to Telegeography, and this increased to 12% in 2009. This is a company that did not exist eight years ago.”

Going local

Developing markets, including countries in the Middle East and Africa, are contributing to a significant proportion of Skype’s growth. For Pasha, this is most likely attributable to the roll out of internet infrastructure, and people having easier access to internet.

“That is why emerging markets are becoming a much more important area for us to focus on when it comes to our future growth and how we can bring the advantage of Skype to new people,” he says.

While Pasha says that the MEA region is providing strong growth, he is unable to give clear figures on where Skype’s users are from, mainly because the service is based on the internet, and “the internet has no boundaries,” he adds. Skype, Pasha says, prefers to focus on the total number of subscribers which is now about 520 million around the world.

While three Gulf countries continue to restrict access to Skype, Pasha is optimistic about business in the region for the company, and he insists that the Middle East and Africa is a key region for growth.

He points to the launch of an Arabic version of Skype’s website in November 2009, and ongoing discussions with local companies as an indication of the company’s aims for the region.

“One of the main reasons we did it was customer feedback,” Pasha says. “Arabic is a major world language and most Arabic speakers are in emerging markets,” he says. “As internet access becomes more readily available in a lot of emerging markets, so Arabic speaking people are growing as part of our customer base.

“The localisation is about how we can help people, how can we forge partnerships with local companies to let people be able to access the internet and access the advantages of Skype,” Pasha adds.

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