DHAHRAN, 15 February 2005 — EasyNet Internet service has been up and running since the early hours on Thursday. The service was launched as a means to increase Internet penetration rates in the Kingdom, which remain pitifully low.
The Communication and Information Technology Commission (CITC) hopes that EasyNet will increase the awareness and use of the Internet so that whenever the government starts to introduce e-initiatives they will have a larger audience and the Internet will be more readily accessible by everyone in the Kingdom.
According to Ousama Najjar, vice president of Nesma, one of the top Internet service providers (ISPs), when the CITC decided to roll out EasyNet, they based it on several important factors.
First, they evaluated the Egyptian market, which has already been successful in a similar endeavor. In that market, after EasyNet was introduced, the volume of the business doubled in 18 months. This is because using such an Internet connectivity is simple and it enables relatively open-ended spending on Internet usage. EasyNet also offers total protection to the consumer because they can easily switch ISPs. With EasyNet consumers have the luxury of moving between ISPs as they please.
“Let us go back to the pre-EasyNet era,” said Najjar. “There were three ISPs dominating the market. When I say dominating, these three ISPs together had more than 90 percent market share. This was divided between AwalNet, Nesma and SaudiNet. The other ISPs had pushed themselves out of the dial-up market. For the smaller ISPs, EasyNet is a new opportunity to get back into business. We, as big ISPs, were terrified that our market share would be eroded through the introduction of EasyNet. We were very comfortable in our distribution. As far as Nesma was concerned, we had captured 37 percent of the dial-up market. I didn’t sleep for the last six months because I knew that EasyNet was coming and all my strengths in the distribution of my cards would not be effective anymore. The game is new. The playing field is leveled. This is a new opportunity for all ISPs to go after the market.”
EasyNet is very convenient for everyone to use and that is one of its major strengths.
“If you were a dial-up customer in the past and you dialed Nesma’s 360 telephone number you had to do certain proxy set-ups and things like that,” Najjar explained. “With EasyNet you don’t need to do that. All what you need to do is go to your connection dialer and dial any ISP’s EasyNet number which starts with 366. You will immediately be given access to the Internet. To connect to Nesma dial 366-0033. To go to AwalNet it’s 366-0011. So now all ISPs have two numbers. Their 360 number with which customers must use a user name and password and the 366 number that doesn’t require a user name, password or set up. EasyNet is not a replacement service to prepaid cards or usage contracts with ISPs. It is an alternative service. Some people will want to control their spending over the Internet and limit their usage by purchasing prepaid cards. We will continue to actively support all Internet service options.”
As one might imagine ISPs are using every possible means to get their EasyNet numbers known. Al-Hatif has been very careful to be neutral ISP and isn’t putting out any of the EasyNet dial-in numbers in its numerous advertisements. The bottom line is that the ISPs that are the most creative at getting their numbers out to public notice will have an edge in attracting EasyNet users. So there is a secondary market benefiting from EasyNet and that is the local advertisers.
In addition to the expected increase in the number of users, ISPs are benefiting in other ways from EasyNet.
“Right before EasyNet the net income to an ISP such as Nesma or AwalNet was around 45 halalas per user hour,” Najjar said. “This was based on the large discounts we were giving to our card distributors. With EasyNet, STC is offering ISPs 65 halalas per hour. So our revenue model has increased. That’s not all. In the past we used to suffer from a lot of uncollected revenue. We used to have to provision for bad debt. Some card distributors disappeared after taking our cards. STC told us they would give us 65 halalas per hour on the usage of our routers and they would take the full responsibility for collecting from the EasyNet customers. So we face no bad debts with EasyNet. Each ISP will receive one check for the revenue coming from STC. Consequently our profitability should slightly increase.”
Najjar admitted that EasyNet is still part of “Internet 101” or introduction to the online world for the Kingdom’s Internet users. Everyone now is hoping that EasyNet will lead to a breakthrough in Saudi Arabia’s Internet penetration rates. It is thought that once the number of heavy Internet users in the Kingdom increases, the demand for better, faster Internet services will also rise. Two new data service providers have been licensed and are expected to launch their services somewhere in mid-August. Once they start competing with STC, bandwidth costs and broadband services should become far more affordable.
