Making mobile data services pay

Halaoui says mobile operators haven?t yet realised the full potential of data.

Mobile services are back at the top of the agenda after Etisalat, STC and others announced the launch of ‘next generation’ mobile networks. Here, Hilal Halaoui, partner with Booz & Company, discusses the future for mobile services and how to monetise content.

How has the mobile content industry progressed in the Middle East and North Africa?
The MENA telecom market is facing increasing competitive pressure. On one hand, the market for traditional telephony is saturated and can no longer be a viable exclusive source of growth and on the other hand, telecom-media convergence has brought about opportunities that could be considerable but that are fraught with uncertainty.

Innovation on products and services has become key component in the regional competitive landscape, and mobile content and applications have been one of the most important vehicles for that.

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Mobile content in the region is evolving at a rapid pace. The huge success of mobile applications, supported by smart phones and mobile broadband networks, is forcing operators to take their content portfolio to the next level. So far, they have been meddling with traditional content, mostly SMS/MMS-based.

The way forward for them is to start tapping into the app space, building developer communities and leveraging mobile advertising. Many operators are starting to do so, with both STC and Mobily for example in KSA launching their own apps in many stores.

User generated mobile content has also been booming, with youth utilising their smart phones to capture content (pictures and video clips) and sending them over to friends over mobile networks.

These market dynamics served to bring the mobile content industry to where it is today. Mobile content revenues have been increasing steadily for the past few years. MENA total content revenues are forecasted to grow at 13% yearly until 2014 to reach US $1.7 billion. MENA application revenues are forecasted to undergo a yearly growth of 23% until 2014, to reach US $285 million.

Was there any single tipping point or has it been a steady progression?
There wasn’t a single tipping point. However, many concurrent parameters have enabled a rapid growth these last few years.

Technologies required to carry to huge consumer data volume (3G, LTE etc.) are becoming available in the MENA region and thoroughly deployed by operators.

Content and application demand has also increased with a shift in media consumption from traditional channels to digital channels mainly due to the nature of regional demographics and increased online awareness (younger generation using mobile communication) and a high internet exposure (which has led to a change in the media culture).

Finally, innovation in devices is bringing internet connectivity to the consumer over more user friendly platforms, and through smartphones that support advanced multimedia forms.

All these parameters have led to the data boom and hence to a steady growth in the mobile content and application market.