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Telecom and media meet: Experts advocate more relevant services

Media and telecom magnates are accepting the fact that their businesses would go down if they continue to ignore the real needs of their targeted audiences.

Companies from all across the two industries pledged in a conference last week to enhance further the content of their products rather than only to rely on equipment. Over two days of sessions, presentations and panel discussions at the second “Media and Telecommunications Convergence” conference, which was organized by the Arab Advisors Group in Amman, participants tackled the social angle of the technological revolution in the Middle East, as they attributed the letdown by many Arab GSM operators to achieve their planned goals to the “exaggerated fantasy” of technology.

It was not bad for the GSM operators in Jordan and some Arab countries to demonstrate the IT-based services, but they have counted more on the success of these services rather than on their marketing. “It has to be clear that telecom and media operators must organize their services to promote the social development,” Luigi Gasparollo, vice president of the US-based Qualcomm, told The Star. Gasparollo was among the 300 experts, executive officers and business owners who took part in the two-day meeting, as they represented telecom and media powers in the Middle East and the world.

He called on GSM operators in the Middle East to enhance the efficiency of their mobile phone networks and upgrade the quality of the displayed technologies to make sure they would meet desires of their customer base. The conference tackled the liaison between the media and telecommunications from different angles, though its participants deemed such relationship to be still inadequate in view of the low rates of penetration, for their combined products. What made this year’s event unique is that it tackled the potential convergence between telecommunications and media from the social perspective, since the first meeting in 2004 focused on the emerging of new technologies in both media and telecom sectors.

Participants at this year’s meeting tried to draw positive indications for the convergence, by persuading the public that media and telecom companies in the Arab world have become more distinctive in their products and services. This is not to forget the fierce competition that telecom and media companies are experiencing nowadays. But Jawad Abbassi, director of the Arab Advisors Group, said that competition and distinctiveness among telecom and media companies have failed to influence the quality and quantity of content of the offered products.

He said that the high fees GSM operators charge for such products still hinder wide-range subscriptions despite the fact that connection fees continue to drop. “Competition will drive down traditional voice revenues,” Abbassi said in his presentation at the conference, adding, “Revenues can be enhanced by stabilizing and enhancing ARPUs (Average Revenue Per User). Revenues need the third generation of GSM handsets to meet the contextual and compelling content in services.”

He added that the contextual should fit the country’s status and culture, while the compelling content has real value, “not just the entertaining effect of novelty.” As of Jordan, where four distinctive wireless operators function, a recent study by the Arab Advisors found that 34 percent of GSM users buy secondhand handsets, while 33 percent change their GSM handsets within a year or less. About 93.2 percent of the GSM subscribers use SMS (51 percent of those on a daily basis).Abbassi noted that the MMS (Multimedia Messaging) service is being supported by only 28 percent of the afforded handsets in the Jordanian market, while 2.3 percent of GSM users do not know if their phones support the MMS. Rates even go lower for the GPRS (General Packet Radio System) service, as 9.3 percent of handsets support it, and 3.2 percent of GSM users do not know if there is GPRS in their handsets.

But Alexander McNabb, group account director for the Spot On Communications, said, “There is undoubtedly a disconnect between mobile subscribers and service providers and it would appear to be related to the way that services such as these are being communicated to subscribers. There is a school of thought that says mobile operators in the region need to think like IT companies in their marketing of these services, rather than talk like IT companies. The opportunities for operators are huge, not just in revenue terms, but in differentiating themselves in the increasingly competitive markets.” Spot On carried out ‘Straw Polls’ of GSM subscribers, in which it highlighted a major untapped opportunity in the marketing of advanced mobile services by Arab GSM operators. The surveys were carried out in Jordan and the United Arab Emirates—two of the region’s key benchmark markets.

It found that public awareness, understanding and adoption of ‘advanced’ mobile services such as mobile Internet access and content-based services is low, while subscribers are feeling confused by the complexity of such services. About 78 percent of the surveyed in Jordan did not use their mobiles to download content on their mobiles, compared to 70 percent polled in the UAE. Thirty-one of the Jordanians rated the content available to them negatively, compared to 71 in the UAE. The surveys comprised interviews carried out among 50 randomly selected members of the public in the UAE and 100 in Jordan, highlighted the fact that although many more subscribers are using MMS services, few are aware of the potential for mobile Internet access and content services. In both markets, over 70 percent of subscribers did not download content to their mobiles, preferring to use MMS to send and receive pictures on a ‘peer to peer’ basis.

Some 54 percent of the subscribers surveyed in Jordan and 44 percent in the UAE used their camera phones to share pictures. McNabb noted that awareness of MMS is higher in Jordan than in the UAE—94 percent to 88 percent respectively. But he reminded that more Jordanians have MMS phones (85 percent of the GSM subscribers) compared to 72 percent in the UAE. He also found that over half of GSM subscribers in both countries use their mobile phones both for personal and business purposes. Osman Sultan, president of Egypt’s MobiNil, told The Star that the mentality of GSM operators and their subscribers should change fundamentally for the better, as media and telecom operators in the region should fulfill this objective in due course. “It is not magic to converge,” he stressed, saying, “The Arab youth already use the advanced technologies, and other public groups should learn more about these technologies. Arab media operators can precisely enhance this objective when they start to educate people and show them how to handle the advanced technologies.”

Sultan demonstrated the conflicting aspect that may emerge when convergence occurs among media and telecom operators. He highlighted the conditions needed for the convergence’s efficiency: Clear political willingness, adapted regulatory and legal framework, and supporting economic environment. “The legal and regulative framework of telecom and media operators in many of the Arab countries can easily enhance the materialization of their convergence, though this is still unrecognized,” Sultan said. Zeid Nasser, managing director of the Amman-based Mediascope, pointed to the key role that Arab media institutions can play to enhance public awareness regarding the advanced technology and how to handle it properly. “The fact that media channels are converging presents challenges to media owners,” he said at the conference. “Jordanian newspapers are the best example, as their copy sales may decrease while their website visitors will increase.

So, it becomes crucial to find ways to generate revenue from their online editions. Also, there are great opportunities in mobile content and news, which newspapers should look into. If these ‘traditional’ media leaders do not move fast, other new players will occupy the news and content digital domains,” added Nasser, who is also secretary general of the International Advertising Association (IAA) in Jordan.

It was announced on the sidelines of the conference that a recent survey by the Dubai-based Madar Research Group found that the total number of Internet users among the Arab nations raised five folds between 2000 and 2005, to around 17 million. The average Internet penetration, however, remains less than 10 percent and varies between the high 20s in some of the Arab Gulf states and less than one percent in some Arab African countries. “Simply, there is no choice as drivers of the new movement gather pace in Jordan. These drivers are cheaper and faster in terms of Internet connections—today you can get an ADSL home connection for JD25 a month—at the emergence of young and Internet/mobile-savvy users who are becoming the region’s largest group of consumers.”

The Star

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