East ‘virtual’ mobile business worth
The Middle East could witness a
virtual revolution worth $5bn, which due to increased
competition, could bring down the cost of making
mobile phone calls throughout the region, according
to industry experts.
Virtual Network Operators (MVNOs) – which
provide mobile services to their consumers over
the existing infrastructure of licensed operators
- have already dramatically changed the telecom
landscape in Europe, the US and parts of Asia.
the first MVNOs are being established in the Middle
East, putting pressure on regional telecom regulators
to open up the market to competition,' said David
Hirst, Director of MECOM 2008, the Middle East
Communications Exhibition and Conference, taking
place from May 26-28 at the Abu Dhabi National
don't own the infrastructure but buy bulk time
at a discounted rate from licensed mobile network
operators and resell to their customers with additional
services. One of the best known is Virgin Mobile
which operates in six countries, including the
UK, the US and South Africa.
the licensed operator, selling minutes wholesale
to a consumer brand with its own marketing budget
means it gets new subscribers at no cost and without
losing control of the infrastructure.
are now more than 300 MVNOs across the world and,
in some countries their numbers vastly exceed
licensed network operators. For example in the
US there are 60 MVNOs but only 13 licensed operators.
In the UK there are 25 with only five network
operators. India is expected to give the green
light to virtual networks soon with Tata Teleservices
in a franchise deal with Virgin Mobile.
first country in the region to establish a legal
framework for MVNOs was Jordan with Saudi Arabia's
i2 announcing operations recently,' said Hirst.
'Many in the industry are now waiting to see which
of the Arabian Gulf countries – with their
high mobile penetration rates - will take a lead
and introduce this trend-setting business model.'
total value of the virtual mobile business opportunity
in the Middle East region alone could be close
to $5bn, a figure that is attracting a lot of
interest from investors, according to Dubai-based
advisory firm Delta Partners in a report - MVNOs
in the Middle East: Threat or Opportunity? - and
a participant in MECOM 2008.
by recent activity, the conclusion from regulators
in the Middle East seems to be that MVNOs present
an opportunity to benefit consumers while opening
up the market to competition without impinging
on the country's infrastructure,' said Delta.
'They seem to be more concerned about when the
market conditions are right and how to subsequently
go about facilitating MVNO entry as opposed to
whether they should be introduced at all.'
potential investors in Middle East MVNO developments,
with multi-billion dollar backing from venture
capital, is Dubai-based FRiENDi Mobile, currently
in discussions in more than a dozen countries
across the region.
which is also taking part in the MECOM summit,
has big ambitions and is expected to announce
its first MVNO service soon. 'Our company vision
is to become the leading pan-regional access network
independent telecom service provider in Asia and
Africa,' said CEO Mikkel Vinter.
company, Hits Telecom, has also announced it is
looking at virtual mobile operations once regulatory
hurdles are removed. In the meantime, it is looking
to acquire an MVNO operation in Europe.
2008 is being held under the patronage of HH General
Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince
of Abu Dhabi, Deputy Supreme Commander of the
UAE Armed Forces and Chairman of the Executive
Council of the Emirate of Abu Dhabi.
in its second year, MECOM is the region’s
premier dedicated exhibition for the telecommunications
industry showcasing the best in hardware, software
and services related to this dynamic industry
sector. MECOM is officially supported by the Telecommunications
Regulatory Authority of the UAE and Dubai Internet
Industry Partner for the event is Dubai Internet
sponsors are etisalat, the UAE Information and
Communication Technology Fund and du. Gold sponsors
are Ericsson, Blackberry, EMS and the Abu Dhabi
Virtual Network Operators