Feature: Mobile Internet
Technology and customer demands are changing. And with them, so too are the secrets to success when it comes to making money from mobile Internet.
Technology and customer demands are changing. And with them, so too are the secrets to success of mobile Internet strategies.
That more people are using smartphones than ever before isn’t news to anyone. But there’s still a lot more room for growth, which means big money for telcos: according to PwC’s Connecting the World report, the economic benefit of connecting the unconnected in the Middle East alone is estimated to be at least US$380 billion.
Telcos are making strides in connecting these people – and making money off it. By the end of 2017, the number of mobile-cellular subscriptions in so-called “least developed countries” (LDCs) had increased to about 700 million, with a penetration of 70%, according to a report from the International Telecommunication Union (ITU), a United Nations organisation. At the same time, more than 80% of the population in LDCs live within range of at least one mobile cellular network.
Houlin Zhao, ITU Secretary-General, says operators simply will not connect areas if they do not think it will be profitable. As he told CommsMEA during an interview back in 2015: “If you do not get any profit, how can you ask them [operators] to do it?”
Finding the right partners
According to Eaman Al Roudhan, CEO of Zain Kuwait, an effective mobile Internet strategy is not just about finding the right partner – it’s about finding “a group of right partners.” She explains that, since business is more collaborative than ever before, and many different organisations have different specialisations, it’s necessary to work with partners in order to develop and use the latest technologies, while at the same time maximising customer service offerings and profits.
Since 2017, Zain has had a special focus on mobile Internet, and in what Al Roudhan calls the partnership ecosystem to make the most of service offerings and profit opportunities. “We want to make sure that we are working with the right partners.”
An example is Zain’s partnership with Ericsson for providing higher capacity and improving network performance in Iraq to provide better mobile services for customers, a deal which was signed in August. Rafiah Ibrahim, head of Ericsson for the Middle East and Africa, says the partnership will help improve digital infrastructure in the nation and cope with rising data demands from new customers.
Connectivity and shorter-term strategies
One easy way to quickly make more money off mobile Internet is simply to connect more customers. But with mobile penetration rates in the Middle East among the highest in the world (the United Arab Emirates leads the globe at 173%, according to Hamburg-based research and information design firm Statista, while Oman is third at 152.3%), the local market is already extremely saturated.
Saudi Telecom Company, better known as STC, has one possible solution for connecting customers to make money off mobile Internet: introducing new services affecting where customers can access mobile Internet.
At this year’s GITEX, STC, unveiled in-flight WiFi Internet services for flights flying over Saudi Arabia. STC is offering the service through ground towers, just as if someone were at a bus station or elsewhere on the ground in a city.
According to STC key accounts vice president Riyadh Muawad, this is the first time this type of service has been offered in the kingdom, and will be a more affordable option than Internet provided via satellite.
“Currently, airlines provide WiFi via satellite,” he says. “It’s expensive. It’s unreliable.”
Muawad says offering WiFi through ground towers will disrupt the industry in that it will provide a far stronger, more consistent signal and faster speeds for customers. The challenge, he says, will be in monetising it in a way that is profitable for both STC and participating airlines, while also making sure passengers get good value from the service.
He says the service will first be available on flights travelling between the capital Riyadh and Jeddah, adding it should be available throughout Saudi Arabia by the end of 2019.
Mohammad bin Rashid Aba Al Khail, director general of corporate communication at STC, says amid a climate of increasing competition, coming up with innovative services is key to staying ahead. He adds this is especially important as the world is witnessing rapid transformations in the telecommunications industry and the digital information revolution.
Finding new ways of making mobile Internet available is also something South Africa-based MTN is doing throughout Africa. In September, MTN Group CEO Rob Shuter announced a new strategy to bring mobile internet to its custom- ers in Africa. Known as “CHASE,” the strategy focuses on coverage, handsets, affordability, services and education/ease of use to improve coverage, make handsets and data services more affordable, and increase digital literacy.
Shuter says the new strategy came about after the company realised many of its customers were not using its mobile Internet data services. “The first big challenge to face is that the ability to connect often isn’t there,” he says.
We want to make sure that we are working with the right
partners. The mobile business is becoming much more interesting, and wide [open].”
Eaman Al Roudhan, Zain Kuwait CEO
“When we look at data coverage, it’s only 60% for 3G.”
MTN is Africa’s biggest mobile phone operator, with more than 223 million customers and 71 million active data users, who use an average of 5MB of data per month.
But new customers mean new demands on capacity and bandwidth. To meet the increasing demand, telcos will need to upgrade their networks.
InfiNet Wireless is one company offering solutions for telcos looking to upgrade and plan for future customer growth. The company has worked on projects in more than 130 countries – such as providing wireless services for large container ships waiting to berth in ports in
Hong Kong and Singapore and having to wait at sea, militaries conducting operations in remote regions such as the deep desert, and cattle monitoring in New Zealand – and spent much of the recent GITEX Technology Week in Dubai showcasing its solutions for fitting more data into a limited amount of space. Global vice president Kamal Mokrani says this can be a game-changer for mobile Internet.
“Broadband offers much more capacity over the same frequency,” he says, adding that InfiNet offers a higher “spectrum efficiency,” meaning more wireless data can be squeezed into a certain radio frequency (known as “spectrum”), while minimising outside interference. Mokrani adds such technologies can affect organisations’ mobile Internet strategies in that it offers more options for what they want to do in terms of service offerings and packages for customers.
5G and longer-term strategies
Much ink has been spilled discussing how the development and implementation of 5G services will disrupt almost every aspect of the telecommunications and tech industries – including mobile Internet. According to Jihad Tayara, vice president of business development and partnerships, new business and innovation at du, 5G will play a role in telcos’ mobile Internet strategies in that there’s a need to be ahead of the competition in terms of developing and offering 5G services to the public.
“5G is way ahead of what people want now,” he says. “And this is our challenge as an industry. The strategy is to make it available, and the people will come.”
Safder Nazir, Huawei’s regional vice president for smart cities and IoT in the Middle East, says 5G will affect mobile Internet strategies in that building the infrastructure and creating the demand – and then deploying 5G in a variety of areas, such as broadband offerings, telemedicine, smart cities and more – will require operators, suppliers and vendors to work together to create a strategy that works for everyone.
“It’s all about the ecosystem – everyone has a stake in the value chain.”
Azz-Eddine Mansouri, general manager of sales at Ciena Middle East, says something similar. “Today’s consumers spend the majority of their digital lives on their smartphones, putting pressure on mobile operators to meet the increasing need for data,” he says.
“5G has the potential to solve data capacity and speed concerns, but introducing the next
generation of mobile connectivity will require a large financial commitment. Building an adaptive network can help alleviate the cost of running a 5G network by taking advantage of automation, intelligence and intent-based policies to lower operational costs by providing predictive data usage requirements in real time.
“For mobile network operators, 5G offers a number of benefits and business opportunities via new use cases and associated services. In addition to much faster download speeds and significantly reduced latency, there is the key benefit of guaranteed end-to-end network performance over both the wireless and wireline domains, from smartphone to data centre.”
In Bahrain, Abderrahmane Mounir, chief marketing officer for Batelco, says 5G could also affect his company’s mobile strategy dramatically – and there’s a need to harness it quickly to stay ahead of the competition. “Of course we’re going to have to do 5G. It has a lot of possibilities.”
Possibilities are one reason why STC first announced and demonstrated 5G in Saudi Arabia. “In these areas, it’s very important to be the first,” says the telco's key accounts vice president Muawad.
“It will be disruptive. We have to adapt.”
Naturally, the development of 5G and diversification of mobile service offerings has massive implications for the future – but the effects may not fully be known for years to come, at least as Mansouri tells it. “5G has been the biggest topic in our industry so far this year and we see no sign of this slowing down,” he says.
“As certainty around 5G builds, we will see carriers increase network investments to enable the technology.”
Regardless of the technologies that arise and customers’ data habits, the Zain Kuwait CEO Al Roudhan says some things will not change, both in the near and far future. “The mobile business is becoming much more interesting, and wide [open],” she explains.
And one of her solutions is unlikely to change, either. “I believe in strategic thinking.”
5G is way ahead of what people want now. This is our challenge as an industry. The strategy is to make it available, and the people will come.” Jihad Tayara, du vice president of business development and partnerships, new business and innovation
Eaman Al Roudhan, Zain Kuwait CEO.
One way to make more money off mobile Internet: offer connectivity in more places.