Mobile Internet growth in the Middle East and North Africa is strong and accelerating. Although international Internet players have recently boosted their presence in the region, mobile telecommunication operators have a strategic opportunity to secure a control point in the Internet value chain that goes beyond providing connectivity.

1. September, 2011
Building a regional mobile content
ecosystem to accelerate digital Arabia
Abstract
Mobile
Internet
growth
in
the
Middle
East
and
North
Africa
is
strong
and
accelerating.
Although
international
Internet
players
have
recently
boosted
their
presence
in
the
region,
mobile
telecommunication
operators
have
a
strategic
opportunity
to
secure
a
control
point
in
the
Internet
value
chain
that
goes
beyond
providing
connectivity.
This
paper
describes
a
mobile
content
ecosystem
that
offers
a
model
for
a
consortium-­‐based,
pan-­‐regional
venture
to
enable
the
nurturing
and
deployment
of
Arabic
content
and
value
added
services
(VAS).
Introduction
The
mobile
Internet
is
ramping
up
faster
than
the
desktop
Internet
didi.
According
to
Gartner,
the
sale
of
smartphones
in
the
first
quarter
of
2011
accounted
for
nearly
24%
of
overall
mobile
sales
–
an
increase
of
85%
year-­‐on-­‐yearii.
140000
120000
100000
80000
60000
40000
20000
Web browsing Video
Music Messaging
Social Networking VOIP
TV Gambling
Games LBS
Images Mobile payment/banking
Figure 1 - Mobile data consumption growth in the Middle East
In
the
Middle
East
and
North
Africa,
the
mobile
Internet
is
fast
becoming
the
essential
component
of
Internet
growth
as
a
whole.
Whereas
the
number
of
fixed
broadband
users
is
expected
to
grow
14%
per
annum
in
the
next
three
years,
mobile
broadband
is
due
to
experience
triple
digit
growthiii.
According
to
market
research
company
On
Device
Research,
seven
out
of
ten
of
mobile
Internet
users
in
Egypt
never
or
rarely
use
a
desktop
to
access
the
World
Wide
Web.
This
Building a regional mobile content ecosystem to accelerate digital Arabia - 1 of 5
0
2011 2012 2013 2014

2. proportion
of
“mobile
only”
Internet
users
is
three
times
stronger
than
in
the
United
States
and
the
United
Kingdom.
In
the
GCC,
smartphone
penetration
combined
with
socio-­‐
cultural
habits
is
giving
way
to
surprisingly
strong
mobile
content
consumption
despite
the
high
cost
of
mobile
data
connectivity.
Publishers
such
as
Eurosport
Arabia
report
that
nearly
a
quarter
of
their
readers
and
third
of
their
daily
page
views
are
generated
by
Apple
iPhone
and
RIM
BlackBerry
mobile
applications.
This
trend
occurs
in
a
context
where
Arabic
content
has
recently
become
a
focus
for
international
Internet
players:
Facebook
launched
its
Arabic
version
in
February
2009;
Yahoo
announced
its
interest
in
Maktoob
in
August
2009
and
Google
optimized
support
for
Arabic
searches
in
early
2010iv.
The
arrival
of
these
international
players
is
all
the
more
significant
that
the
Arabic
digital
content
economy
is
still
young
and
immature.
According
to
on-­‐line
research
company
Effective
Measure,
the
most
visited
local
web
sites
in
Saudi
Arabia
and
Egypt
remain
forums.
Although
growing,
digital
advertising
remains
limited
in
the
region
to
an
estimated
160
Million
USD
in
2011
of
which
60%
is
consolidated
in
the
hands
of
leading
international
players
Google,
Facebook
and
Yahoo.
Mobile content consumption
is currently in a catch twenty-two situation
Mobile
telecommunication
operators
have
a
strategic
role
to
play
in
accelerating
the
regional
growth
of
a
digital
Arabia.
They
need
to
change
the
paradigms
of
mobile
content
consumption
and
allow
for
publishers,
media
owners
and
value
added
services
(VAS)
vendors
to
develop
relevant
regional
content.
Figure 2 - Mobile content consumption is caught in a vicious circle.
Mobile
data
connectivity
remains
to
date
an
expensive
value
proposition
for
consumers
in
the
GCC.
Although
mobile
penetration
is
high,
mobile
data
plan
penetration
is
typically
limited
to
20
or
30%
of
high
value
consumers
–
compared
Building a regional mobile content ecosystem to accelerate digital Arabia - 2 of 5
Small base of enabled
consumers due to high
cost of mobile
broadband services
Content and application
developers slowdown
investment due to low
short term returns
Operators disregard content
and strictly promote data
packages to gradually skim
the market
Small audiences
discourage brands to
invest in mobile media
//Focus
The failure of proprietary mobile
walled gardens
A number of telecommunication operators
have adopted in the past “walled garden”
approaches to mobile content consumption.
With a few exceptions, most initiatives have
had limited success and consumers have
typically shied away from operators’ portals.
Several factors can explain this situation:
-­‐ Prior to the emergence of smartphones,
mobile devices catered for a poor
browsing experience: small screens,
cumbersome text input and navigation,
slow data speeds gave way to user
frustration;
-­‐ Content selection was most often driven
by the operators’ marketing teams: when
platforms were opened to third-party
publishers, contractual conditions were
often drastically in favor of the operator
and the technical requirements for
integration remained complex;
-­‐ Limited to a single operator, such walled
gardens often lacked the scalability in
terms of audience that advertisers and
brands sought to opt-in.

3. to
90%
and
above
in
western
markets.
As
a
result,
the
population
of
mobile
content
consumers
remains
low
compared
to
other
mass
media.
This
situation
generates
all
the
more
frustration
for
brands
and
advertisers
that
mobile
marketing
promises
a
degree
of
transparency
that
neither
print
nor
broadcast
can
provide
and
a
level
of
one-­‐on-­‐one
interaction
stronger
than
on-­‐line
media.
Media
buying
units
are
impatient
to
deliver
new
advertising
channels
for
the
brands
they
serve
as
illustrated
by
the
recent
partnership
between
Omnicom
Media
Group
MENA,
one
of
the
largest
regional
investors
in
digital
media,
and
July
Systems,
a
software
vendor
specialized
in
mobile
applicationsv.
Consumers opt-in
to have unlimited access
to premium content
Regional Mobile
Content Ecosystem
Content and application
providers build up their
value propositions
Operators leverage content
and apps to gain customer
intelligence
Brands invest
to target consumers
on the go
Figure 3 - A regional mobile content ecosystem brings all parties together
In
the
meantime,
advertising
dollars
remain
scarce
and
publishers
have
a
difficult
time
reaching
profitability
for
any
of
their
existing
mobile
properties.
Transaction-­‐based
value
added
services
fair
no
better
with
telecom
providers
typically
imposing
drastic
revenue
share
models
with
30
to
40%
of
revenues
typically
in
their
favor.
The need for a paradigm shift
Building
a
regional
mobile
content
ecosystem
that
can
successfully
break
this
vicious
circle
requires
a
shift
of
paradigm
so
as
to
cater
for:
Building a regional mobile content ecosystem to accelerate digital Arabia - 3 of 5
1. The
unlimited
data
consumption
of
a
limited
set
of
content
and
value
added
services;
2. A
secured,
vetted
browsing
experience
that
caters
for
regional
sensitivities;
3. An
open
standards
based
platform
so
to
allow
for
the
accelerated
deployment
of
additional
content
value
propositions
across
the
leading
smartphone
platforms;
4. An
e-­‐commerce
enabled
environment
which
is
adapted
to
cash-­‐first
economies
where
credit
(and
even
debit)
cards
are
scarce;
5. An
ecosystem
with
low
transaction
costs
so
as
entice
content
and
application
providers
to
join-­‐in.
//Focus
A portal that leverages the i-mode
concept on today’s smartphones
Launched in 1999, DocoMo iMode succeeded
in building a rich content and application
mobile ecosystem for the Japanese market.
Tight integration with handset manufacturers
combined with a user interface optimized for
mobile browsing facilitated consumer
adoption.
A reliable micro-transaction payment platform
combined with a low transaction cost
empowered content and application providers
to build up their offering.
© ntt docomo
Opting for a consortium based, regional
mobile content ecosystem for today’s digital
Arabia lifts these obstacles by:
1. Targeting smartphone users and
leveraging the accelerated penetration in
the coming months of sophisticated
devices;
2. Aggregating large enough a regional
audience to attract advertisers;
3. Opting for open standards that facilitate
the integration of third-party content.

4. A platform for growth
By
pulling
together
under
one
roof
best-­‐of-­‐breed
content
and
value
added
services,
telecom
operators
can
build
a
platform
for
growth
in
which
regional
content
and
applications
can
flourish.
The
implementation
of
such
a
mobile
content
ecosystem
requires
that
a
set
of
core
services
be
ensured:
1. Content
from
partner
publishers
needs
to
be
Brands & Advertisers
4 5
anayou
Value Added Services
ana - Social Media Updates
ana - vault
ana – messages
ana – other services
anayou.com domain sponsored by mobile operator
(zero-rated for an opt-in and a fee)
Existing Operator VAS
Subscribers opt-in to have unlimited access on the go to
premium content. Because they have opted-in, they accept
marketing message and promotional offers.
Building a regional mobile content ecosystem to accelerate digital Arabia - 4 of 5
aggregated
in
a
unified
mobile
portal
so
as
to
ensure
a
consistent
user
experience
which
is
a
prerequisite
to
mass
adoption;
2. The
monetization
of
advertising
inventory
must
be
centralized
so
as
to
provide
brands
and
media
buying
units
with
a
single
point
of
entry
from
which
they
can
easily
order
and
execute
campaigns
across
multiple
operators,
3. User
profiling
must
be
ensured
through
an
initial
opt-­‐in
complemented
by
recurring
data
surveys
so
as
to
provide
better
consumer
intelligence
and
lead
to
improved
consumer
segmentation;
4. Mobile
marketing
services
(including
SMS
and
MMS
campaigns)
need
to
leverage
this
segmentation
so
as
to
provide
brands
and
marketers
with
an
efficient
way
to
market;
5. Micropayment
and
e-­‐wallet
services
need
to
be
tightly
integrated
with
the
operator’s
back-­‐office
systems
so
as
to
ensure
a
seamless
consumer
experience.
The benefits of a pan-regional consortium
for national telecom operators
Such
a
mobile
portal
can
be
developed
in
isolation
within
the
existing
walled
garden
of
a
telecom
operator.
Mutualizing
efforts
within
a
consortium
presents
a
number
of
strategic
benefits
by:
1. Reaching
critical
mass
so
as
to
provide
an
audience
large
enough
for
publishers
to
partner
and
for
brands
to
advertise;
2. Offering
a
unified
gateway
for
media
buying
units
and
research
agencies
to
buy
campaigns
and
surveys
from;
3. Leveraging
economies
of
scale
and
best
practices
across
operators
and
geographies;
4. Benefiting
from
a
ready-­‐to-­‐go
platform
with
adequate
content
curation
and
maintenance.
By
supporting
such
a
regional
mobile
content
ecosystem,
a
telecom
operator
can
multiply
contact
points
with
its
subscriber
base
and
strengthen
its
brand
equity.
Recent
research
reveals
that
the
more
people
use
the
mobile
//Focus
An ecosystem open
to multiple revenue streams
A regional mobile content ecosystem brings
together brands, consumers and telecom
operators by removing the obstacles to
mobile digital content consumption.
Subscribers gain unlimited access for a flat
monthly rate to premium content services.
Operators turn subscribers into profiled
consumers who have opted-in to marketing
messages and VAS promotions. Publishers
have a channel to build-up their mobile
audience and brands gain a channel for
advertising and one-on-one marketing.
Multiple revenue streams are generated
including:
1. Monthly subscription fees: flat-monthly
fee is charged by the operator;
2. Transaction fees on premium content
and applications;
3. Recurrent surveys: consumer data
collected at log-in and during customer
life provide unique profiling information;
4. Advertising inventory: flat-rating
facilitates traffic and page view
consumption that drive number of
advertising impressions;
5. Additional Value Added Services: built as
extensions of the content value
proposition, VAS can be invoiced thru e-wallet
and mobile payment gateways.
Other VAS
Publishers with mobilized offering
News
Entertainment
Sports
Branded Content Vertical
Branded Content Vertical
Branded Content Vertical
Branded Content Vertical
1
2 3

5. Internet,
the
more
they
love
their
mobile
operatorvi.
In
addition
to
reinforcing
their
brand
presence,
national
operators
can
gain
greater
customer
intelligence
of
their
installed
subscriber
base
and
leverage
this
market
data
to
launch
new
services
targeted
to
specific
segments
so
as
to
reduce
churn
and
pave
the
way
to
new
revenue
streams.
Conclusion
Mobile
telecom
operators
in
the
Middle
East
and
North
Africa
have
a
strategic
opportunity
to
take
the
lead
in
nurturing
regional
content
for
the
Arab
world.
In
the
process,
they
can
gain
increased
market
and
customer
intelligence
to
better
service
their
brand
and
secure
in
the
mid-­‐term
a
role
that
goes
beyond
data
providing.
Whereas
building
such
a
content
and
application
ecosystem
required
the
implementation
of
proprietary
technologies
in
the
past,
the
current
standardization
of
mobile
content
serving
greatly
level
the
point
of
entry.
Leveraging
the
ability
that
telecom
operators
have
to
flat
rate
a
target
destination
is
the
key
to
launching
a
regional
mobile
portal
that
aggregates
large
enough
an
audience
to
meet
advertisers’
expectations.
Figure 4 - Yahoo Japan just launched a branded Android device
The
recent
announcement
by
Yahoo
Japanvii
of
a
branded
Android
smartphone
demonstrates
if
need
be
that
international
desktop
Internet
players
will
not
stay
on
the
sidelines
of
the
battle
for
mobile
consumers.
i
Morgan
Stanley
:
The
Mobile
Internet
Report
Setup,
December
2009
ii
Gartner
Press
Release,
May
19,
2011
iii
Booze
research
based
on
Ovum,
WBIS,
WCIS,
Madar,
Zenith
Optimedia,
Parc
and
AAG
data.
iv
http://www.vertical-­‐leap.co.uk/news/google-­‐builds-­‐support-­‐for-­‐arabic-­‐searches/
vhttp://www.kippreport.com/2011/05/omg-­‐mena-­‐july-­‐systems-­‐partner-­‐to-­‐develop-­‐mobile-­‐marketing-­‐opportunity/
vi
http://www.slideshare.net/OnDevice/odr-­‐mobileinternetsatisfaction2011q1-­‐7614676
vii http://www.mobilityfeeds.com/mobility-­‐feed/2011/08/softbank-­‐to-­‐launch-­‐in-­‐japan-­‐first-­‐yahoo-­‐branded-­‐android-­‐
smartphone-­‐google-­‐gingerbread.html
Building a regional mobile content ecosystem to accelerate digital Arabia - 5 of 5