ALKHOBAR, 28 February 2006 — Mobile Connectivity is a huge concern for everyone in the Middle East. Mobile phones are a big part of getting through the day here. Their use is extensive across all demographics. We might be forced to put our handsets on silent sometimes, but turn them off? Perish the thought! The trend in Saudi Arabia is to have at least two mobile numbers and perhaps three — one for work, one for family and then a third one for “significant callers.” In the Kingdom, many people take a similar number from each of the two mobile providers in the hope that no matter where they are, either Mobily or Al-Jawal will have coverage in that area. Plus, if the credit limit is breached with one provider, God willing, there will still be a few riyals of talk time left with the other.
There hasn’t been much research into how the explosion in mobile handset use is affecting the region, which is why a report commissioned by telecom provider MTC makes interesting reading. The report includes research on the impact of mobile phones from economists, financial analysts, consultants, academics and journalists. It also comprises data from nine surveys conducted in seven Arab countries.
“Mobility for One Language, Diverse Cultures — The Socio-Economic Impact of Mobile Phones in the Arab World” found that the mobile phone industry in the Middle East and North Africa (MENA) is creating hundreds of thousands of new jobs inside and outside the industry, boosting economic growth and fostering social harmony and security. The report’s results show that mobile revenues alone accounted for five percent of the increase in GDP in Bahrain between 2002 and 2004. In Jordan, the number of employees in the mobile sector increased by 42 percent over the four-year period of liberalization. Elsewhere, the data produced in this extensive report revealed that some mobile operators represent more than 30 percent of a total stock market — such as Egypt’s Cairo and Alexandria Stock Exchange (CASE) — and can result in a return of around $33,500 for each $1,000 invested, as was the case on the Kuwait Stock Exchange.
According to Dr. Saad Al-Barrak, CEO, MTC Group, “The report shows the potential of mobile communications to enhance not only the economic position of countries and people but also to change the social fabric of our communities. At MTC, we have always believed that mobile communications are part of the framework of societies and the daily lives of people and this report attests to that fact.”
Al-Barrak added, “We are very interested by the finding that in Egypt for every job created in the mobile sector, eight other jobs are created in different sectors of the economy, as well as the conclusion that if ICT investment in Egypt were doubled, it would create 1.3 million new jobs and the rate of GDP growth would rocket from four percent to eight percent and more. This makes us ever keener on winning the third mobile license in Egypt and contributing to that growth potential, as we did in Iraq and other countries of the region.”
The report, conducted by the research firm Zawya, is divided into five major segments, including an overview of the region’s mobile sector, economic and social impacts of mobile phones, the impact of the mobile phone in Iraq, analyzed through a survey done by Dubai-based Money Line, and a thorough MENA survey carried out in six different countries by Nicosia-based ACNielsen.
On the social side, MTC’s report reveals how the mobile phone has become the Arab world’s most commonly used leading-edge technology. From research by a sociologist in Beirut, to a fact-finding report by a journalist in Jordan’s Wadi Rum, passing by the Palestinian Territories, this side of the report shows how the mobile has become an integral part of life in the MENA region.
In the Iraqi section, a survey conducted in three major cities, Baghdad, Basra and Najaf, by Money Line showed how 95 percent of Iraqis use their phone to ensure the safety of their loved ones and 43 percent consider it as their best friend. What is most surprising is that although the widespread use of mobile phones has only recently been introduced in Iraq, 83 percent see it as a necessity in life and 77 percent said it made life easier.
Finally, a survey conducted in six countries by ACNielsen shows in detail how the people of the region use their phones. The findings suggest that Moroccans tend to call their siblings the most, while in Saudi Arabia, 65 percent of interviewees call their friends the most.
On the micro-business level, the survey found that the mobile phone has become a vital tool for businesses with a reported 32 percent increase in profitability for those interviewed in Bahrain and Jordan and a 25 percent gain in Tunisia. Additionally, 62 percent of respondents in Tunisia believed the mobile has helped lower costs by reducing travel needs.
The 140-page report, is available in its entirety in a two part PDF download from http://www.mtctelecom.com/muse/obj/portal.view/content/Media%20centre/Press%20releases/Socio%20Economic%20Report.
In Saudi Arabia, the availability of mobile resources continues to increase, and yet ever more is still required. During the latest Haj season, three million pilgrims, up 20 percent than last year, gathered at the holy sites — an area of about 5 sq. km. Hundreds of thousands of mobile users frequently wanted to make calls at exactly the same time within that area. Additionally, the quantity of short messages jumped 10 times over the average. The quantity, timing and type of mobile usage during Haj are regarded as the severest challenges for any mobile communications provider.
Urgently searching for a means to handle the high mobile traffic level, STC selected Huawei Technologies’ GSM Mobile Softswitch System to construct the network covering all Haj sites including Makkah. In the network, the capacity of one of Huawei’s GSM Softswitch VMSC exceeds one million subscribers, being the largest mobile softswitch local exchange in the world.
In the wee hours of Jan. 9, 2006, the total number of mobile users in Makkah increased to three million, and the number of equivalent users in the biggest local exchange reached over 1.1 million. The traffic volume increased by nearly 20 times and the quantity of short messages and handover, 18 times and 24 times respectively on average. However, the put-through rate remained stable and mobile users could still make calls successfully.
Although the number of mobile users during Haj this year increased by 20 percent, STC’s GSM network kept a high put-through rate and its operational income jumped 30 percent over that of last year. Delighted, STC awarded Huawei its “Highest Development Achievement Award for 2005.”
Huawei is working to expand its local network across the region. Last week the company inaugurated its sub-regional office for the Gulf and Levant region in Dubai Media City. Huawei has had strong growth in the region since it began operations in 2001 and currently has 20 branches across 28 countries in the Middle East and North Africa (MENA) market. Globally, its contract sales for 2005 reached $8.2 billion, representing a year-over-year growth rate of over 40 percent.
“At Huawei, we focus on being close to our customers and this new office highlights our long-term commitment to this region. The MENA region is a key market for Huawei as regional telecom operators expand their coverage into Africa, Asia and Europe. Liberalization of the telecom sector in the MENA region and the growth of broadband demand for enterprises and consumers offer huge potential for growth and we are anticipating a significant growth in the region over 2005,” said Wang Jiading, VP, Huawei Technologies, MENA.
While STC has been putting technologies in place to handle more network traffic, the company has also been taking steps to improve its customer care services. Recently it was announced that Convergys Corporation has signed a multi-year licensing, support and maintenance contract with STC for a Convergys billing and customer care solution.
“STC has spent the last six years since its privatization developing the Saudi communications services market and increasing the value it offers its customers,” said Saud Al-Daweesh, president, STC. “The new Infinys solution, coupled with a complete overhaul of our CRM, will ensure that customer demands for new sophisticated mobile services are met and even exceeded, while helping to lower STC’s operational costs.”
STC selected Convergys’ Infinys rating and billing solution to support its current 12 million pre- and post-paid mobile subscribers, and to quickly scale to meet anticipated subscriber growth brought about by STC’s delivery of new advanced services. Convergys will also provide on-site professional and consulting services staff for project planning, consulting and training. Implementation will begin during the first quarter of 2006.
“This is the biggest billing contract for Convergys in the Middle East and one of the largest for the industry in the region,” said Jean-Herve Jenn, Convergys’ President, International. “This deal reinforces the leadership position Convergys has established in the Middle East.”
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