ALKHOBAR, 29 June 2004 — Let’s start off today with a few announcements. First, in the last few weeks several free e-mail providers have increased their mailbox sizes. The fact is that so far none compare with Maktoob, which is offering the largest mailbox on the Net to date. A Maktoob mailbox gives users 1GB mail storage space and allows attachments of up to 50MB. Get one at maktoob.com.
Next, all US citizens living in Saudi Arabia or anyone with family or business interests in the Kingdom should sign up for a new free web service that enables the direct reception of US Warden’s notifications. The Warden’s network is a volunteer service that allows the US Embassy in Riyadh to pass on security notices to American citizens living in the Kingdom. By signing up with the American Embassy’s Big List, the Warden’s messages are sent directly to your e-mail. Click to http://usembassyriyadh.biglist.com/sub/wadenmessageksa and follow the instructions. Please remember that after requesting to be included in the list, in order to actually activate the service it is essential to reply to the confirmation e-mail that will be received at your e-mail address from the Warden Message KSA List Administrator.
And last, I am searching for spare parts for a Sony Betamax VCR model SL-T9ME. In the middle of transferring over some vintage Arabic cartoons to CDs, the head and motor on the machine went bad. Sony’s repair shops in Saudi Arabia don’t have spares. If you know where to get some or where to get a Betamax in working order, drop me a mail to the address at the end of the column.
Now, on with the main event...
In June 2004, Pyramid Research published its 2Q2004 Mobile Communications Forecasts for more than 80 countries in the world. Overall, Pyramid Research estimates that there will be 1.6 billion mobile communications subscribers around the globe by year-end 2004, of which nearly 750 million, or 44 percent of the total, will be in the Asia Pacific Region. Between 2004 and 2009, Pyramid Research expects total mobile subscribers to increase at a compound annual growth rate (CAGR) of 8.5 percent, topping 2.5 billion subscribers by year-end 2009. According to Pyramid, the number of mobile subscribers will top the two billion mark sometime in the latter half of 2005.
Although smaller in volume of subscribers, the Africa/Middle East region will be the fastest growing, posting a subscriber CAGR of 12.5 percent over the next five years. Asia Pacific and Eastern Europe will follow closely, posting CAGRs of 11 percent and 10.2 percent, respectively. Western Europe, which enjoys the highest mobile penetration rates today, will sustain much more modest growth, at an average of 2.3 percent per year.
Pyramid Research put out an analysis of the current situation in the Kingdom in regards to the second mobile bid. Pyramid stated that while the militant attacks raise serious concerns about Saudi Arabia’s political and economic outlook, including the future of the Kingdom’s mobile market and that the Saudi regulatory environment — and the business environment in general — still leave a lot to wish for, operators should not be deterred from entering the Saudi market.
“Mobile services providers have been operating in far more hostile markets than Saudi Arabia without compromising decent margins,” Pyramid Research wrote. “Our argument is that the numerous challenges that any entrant faces should be adequately weighed into its business plan, which is anything but an easy task; we also argue that recent events have put Arab players in a pole position to win this license.”
Pyramid’s analysis found that the challenges of the market do not outweigh the possible returns to be garnered by a second mobile operator.
“Although the economic outlook is becoming less certain as the political tensions deepen, Saudi Arabia remains one of the most prosperous countries in the region with a GDP/capita of $8,390, average revenue per user (ARPU) of around $60 — compared with UAE’s $40 — and a penetration rate at just 30 percent at YE2003,” Pyramid Research stated. “In other words, the opportunity is there for a second operator to achieve healthy margins and to build up a large revenue base in absolute terms.”
In putting forward the reasons why Pyramid believes that an Arab consortium has the inside track on the bid, the research group wrote: “Given the purportedly growing discontent among Saudi citizens over their rulers’ close ties with the West, the Saudi government may be tempted to rule out the option of selling the license to a non-Arab operator, irrespective of price. Secondly, even if the government remains unbiased, we would assume that the escalation of violence would affect an Arab operator slightly less than other bidders in the prequalified group. So far, most of the attacks have specifically targeted Westerners and Western business interests. Unless the situation deteriorates sharply and develops into a state of civil war, we expect an Arab operator to run its business without the same level of disruption and security concerns as would a non-Arab service provider. In other words, the deteriorating security situation is likely to make Arab operators relatively stronger in the bidding process.”
The second mobile bid is important to consumers in the Kingdom, but many people don’t clearly understand the issue because they are clueless when it comes to the technology. A survey carried out by the Arab Advisers Group has found that uptake of GPRS technology in Saudi Arabia is below 1.5 percent of the subscriber base, while 33 percent of subscribers were unaware whether their handsets supported GPRS and 25 percent were unaware if their handsets supported MMS.
Saudi consumers shouldn’t feel too bad though about being confused in regards to Saudi Telecom’s services. Surveys carried out by Dubai’s Spot On Public Relations in two of the region’s key benchmark markets, the UAE and Jordan, found that public awareness, understanding and uptake of “advanced” mobile services like GPRS and MMS is lagging significantly behind regional technology capabilities.
In the UAE, some 50 percent of respondents were unaware of the availability of a 3G service, while in Jordan, the first market to launch mobile Internet access using the GPRS technology, 60 percent of respondents capable of using the technology chose not to do so — 85 percent of these citing pricing concerns as a reason for not using the service.
“This points to a critical issue and yet a major opportunity for the region’s mobile operators,” said Alexander McNabb, group account director at Spot On PR. “The market is changing with the introduction of new technologies, yet it would appear that awareness and understanding of these technologies and what they offer subscribers in the region is still low. The revenue benefits to operators of addressing this gap in understanding of what’s on offer are potentially massive.”
Since a little education seems to be at the heart of understanding Advanced Mobile Services, Spot On has offered the following definitions of some standard terms.
MMS: Multimedia Messaging Services allows subscribers to send and receive “rich” content, including picture messages, sound files and short video clips and is intended to build on the popularity of SMS (Short Message Service) texting supported by standard GSM networks. This can either be achieved on a handset to handset basis (“peer to peer”) or content can be “pulled” from Internet sites. MMS users can also typically send and receive content, within certain limitations, to and from the Internet — including interaction with e-mail. MMS is currently enabled through the GPRS carrier technology in most regional networks.
GPRS: The General Packet Radio System is a technology that allows mobile users to exchange information using the Internet Protocol, or IP, over GSM mobile networks. This means support of full Internet access from a mobile telephone at near-dialup or dialup speeds, depending on operator capabilities. GPRS data rates range from typical 32 kbit/s to as much as 70 kbit/s — as a guide, typical fixed line Internet “dialup” speed is 52 kbit/s, while fixed ISDN lines support 64 kbit/s data rates.
GPRS supports full Internet access (web browsing, e-mail etc.) from a GSM mobile phone or PDA (personal digital assistant). GPRS can also be used with a notebook computer through a dedicated GPRS ad-in card or by using a mobile telephone as a modem, linked to the laptop via infra-red, cable or Bluetooth connections. In short, GPRS lets people on the move access the Internet, with a wide range of access devices.
EDGE: Faster Internet access speeds on mobile telephones are enabled by EDGE technologies, which support 110 kbit/s or 220 kbit/s theoretical access speeds over standard GSM 2G+ capable mobile networks. EDGE allows faster Internet access and richer content than GPRS without necessitating the largescale network upgrades required by migration to the 3G standard. EDGE does, however, require an appropriately enabled GSM handset.
3G: Third Generation network technology supports broadband (typically up to 384 kbit/s) access, allowing fast Internet connectivity and applications such as real-time “videophone” access on capable handsets. The technology requires major network upgrades and a new class of subscriber handset in order to operate. Although other broadband technologies have been postulated, 3G stands as the widest broadband migration choice for operators globally.
Finally, I’d like to end the column today by mentioning an incident I saw two weeks ago at Dammam’s King Fahd International airport. Returning from Dubai without luggage, I hurried to customs hoping to quickly escape the airport. In front of me was a Western gentleman, who appeared to be some sort of international consultant. He had only carry-on luggage and had been received by a company official to speed him through the formalities. Unfortunately, that was not to be.
“Show me your mobile phone,” ordered the customs official. The man gave him a handset. “Now show me the other phone,” the customs official demanded. The traveler complied.
Sure enough, that one had a camera, and the misery began. A supervisor was called and an argument over the confiscation of the mobile phone was under way as I was cleared through the line. I dropped my purse on the floor and turning back to pick it up, I noticed that protruding out of the back pocket of the customs inspector’s trousers was the Nokia 6600 — complete with camera.
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