Telecoms & ITC

Egypt: Connections for the future

In what comes as no surprise for a country that used Facebook, Twitter and mobile phones to help overturn a political regime, a recent report by the UN Conference on Trade and Development (UNCTAD) stated that Egypt “is poised to emerge as a major player in the information economy”. UNCTAD, which carried out its assessment of Egypt’s information and communications technology (ICT) sector at the request of the government, published its first-ever ICT Policy Review for the country on October 26. Speaking at an event in Geneva to mark the launch of the report, Egypt’s then-interim minister of communications and information technology, Mohamed Salem, said that 2011 heralded “the dawn of a new era for ICT in Egypt, with even more Egyptians joining and embracing the information society as we continue to work to forge a knowledge economy”. The report examines a range of ICT development indicators, including infrastructure, skills development, technology use in education, export-oriented business in the industry and the use of e-content in Arabic. It highlights the country’s already strong ICT backbone and suggests a number of ways in which the sector could grow and better achieve its potential. Egypt’s recognition by UNCTAD comes on the back of several years’ worth of increasing activity in the ICT sector, both in terms of retail user penetration, as well as in infrastructure development, innovation and service provision. In recent years Egypt has done well in the field of business process outsourcing (BPO), capitalizing on competitive advantages that include an educated, multi-lingual workforce; relatively low labor and overhead costs; a location that allows it to service Europe as well as much of Asia and Africa; a group of outward-looking ICT entrepreneurs; and the development of integrated ICT facilities in clusters near major cities. Each year, Egypt produces more graduates than any other Arabic-speaking country – there were more than 330,000 in 2009 – many of who seek jobs in the BPO sector. With a large pool of native Arabic speakers, Egypt is well positioned to service much of the rest of the Middle East and North Africa (MENA) region, and several European languages are also widely spoken. The government has played an increasingly active role in supporting the ICT sector through official training courses. Egypt ranked fourth in the world on the 2011 Global Services Location Index (GSLI), a ranking of offshoring destinations published by international consultancy AT Kearney, having risen from 12th position since 2007. Indeed, a number of major international firms have established outsourcing centers in the country in recent years. These include an IBM finance and accounting BPO center; Vodafone’s knowledge process outsourcing and contact center serving the UK, Germany and New Zealand; and two US-based BPO firms, Stream Global Services and Sutherland Global Services, that have set up contact centers. However, to further develop the sector, Egypt should target several areas, the UNCTAD report notes. These include “building a more inclusive information economy” – an acknowledgement that the country still has a deep digital divide. The development of ICT training, as well as the growing use of technology in schools, means that this gap is increasingly between age groups rather than economic ones. The country is already growing in one particular niche area. “One of the biggest growth areas that have accelerated after the revolution has been document archiving services,” said Steve Clay, the general manager of Xerox Egypt. “Many physical document storage areas were burned during the revolution. Egypt could be another hub for archiving services in the MENA region.” Source: Oxford Business Group

Atheeb gets nod for $310m rights issue

Saudi Arabia's Etihad Atheeb Telecom has received regulatory approval to launch a 1.175 billion riyals ($310 million) capital increase, paving the way for the loss-making firm to resume trading on the kingdom's bourse. Atheeb, 15% owned by Bahrain Telecommunications Co, will issue the 117.5 million shares at a nominal value of 10 riyals per share to raise its capital to 1.575 billion riyals, the operator said in an emailed statement to Reuters. Atheeb, which operates under the brand name GO and was awarded a fixed line license in 2009, will hold an extraordinary shareholder meeting to decide at what price to sell the new shares, with the rights issue restricted to existing shareholders. The firm's shares were suspended in May after its accumulated losses reached 95%. Saudi market rules call for a suspension if losses exceed 75%. Atheeb then cut its capital by 60% to 400 million riyals to cover some of these losses, with the rights issue to follow ahead of its resuming trading. Source: Reuters

Saudi Telecom buys 60% stake in firm

Saudi Telecom Company (STC) has bought a 60% stake in Sale Distribution and Communications for 208 million Saudi riyals ($55 million) to strengthen its sales services. Riyadh-based Sale is a leading retailer of mobile telephone connections in Saudi Arabia, STC said in a statement it posted on the website of the Saudi bourse. The operator, which is partly state owned, said it would finance the sale itself. Source: Reuters

Mena mobile market 'set to stagnate'

The historic growth levels of the Mena mobile market are unlikely to continue as most countries in the region are nearing maturity, says a new report. However, the region’s fixed line market is expected to show high levels of growth as operators make increased investments in Fiber-to-the-home (FTTH), said the Frost & Sullivan report on Middle East and North Africa information and communication technologies market. The UAE is expected to be the first country in the world to have 100% broadband Internet penetration through FTTH technology, it said. Frost & Sullivan observes that in order to fully realize growth potential, it is essential that market liberalization efforts be continued. While there has been significant progress in this regard such as the launch of triple play licenses in Egypt, the UAE issuing Voice over Internet Protocol (VoIP) licenses, Qtel tie-up with Skype to offer VoIP services in designated countries with local presence there are instances in which improvements have to be made. Source: TradeArabia News Service

Top Indian IT firm launches JV in Qatar

Leading Indian technology solutions company Sonata Software has launched its operations in Qatar under the name of Sonata Software (Qatar), a joint venture (JV) with Mohammad Nasser Abdullah Al Misnad. Together with local partner Mohammad Nasser Abdullah Al Misnad, Sonata Software (Qatar) will provide business-focused technologies and solutions to the Qatari enterprises. Sonata Software (Qatar) will build on a three-year relationship with a leading national airline where there is an embedded Sonata team of 50 professionals. Sonata Software has also worked extensively with 16 other enterprises throughout the Gulf region that have similar business models and IT requirements. The new JV will leverage Sonata’s vast experience in ERP implementations across industry verticals and partnerships with leaders like SAP, Oracle and Microsoft to partner customers in their ERP implementation, a statement said. Source: TradeArabia News Service

Kuwait: Expanding and competing

With the highly competitive Kuwaiti telecoms market becoming increasingly saturated, the country’s three mobile operators are jostling for position. Central to all of their strategies is a greater focus on mobile data services. Earlier this month, the third entrant to the market, Viva, which is owned by the Saudi Arabia-based STC Group and has been active in Kuwait since 2008, announced the launch of data roaming bundles for GCC countries. The service, called “GCC Roaming Surf-On”, will allow postpaid customers with smartphones to access a range of Internet services throughout the region. Prices for the package range from a daily rate of KD1 ($3.60) for 5 MB of data to a monthly rate of KD10 ($36.08) for 50 MB. The move follows the announcement in May that the operator is focusing on the development of its fiber optic network in anticipation of the roll out of 4G services. Viva’s push for greater capacity and competitiveness on mobile data services comes at a time when the volume-driven voice market is beginning to look like it is reaching saturation point. There were 4.8 million subscribers as of June 2011, equating to a year-on-year increase of 13.9%, according to Global Investment House, a Kuwaiti asset management company. While this growth rate is not at its peak, it is still well above countries within the region such as Qatar and the UAE, which recorded rises of 5.6% and 4.7%, respectively, for the same time period, according to the company. Within the Kuwaiti market, however, slowing growth is beginning to put greater pressure on the operators to maintain their market share and revenue base. Zain, for example, which is publicly listed and was the first operator to enter Kuwait, saw moderate subscriber and revenue erosion in the12 months to June 2011. The operator’s subscriber market share fell from 44.8% in the second quarter of 2010 to 42.1% a year later. The biggest beneficiary has been Viva, which has increased its market share from 15.6% to 17.9% in the same time period, while the third operator, Wataniya, has maintained its share around the 40% level. Zain also witnessed a decline in revenues of 1.8% to KD345 million (1.24 billion) in 2010, according to Global Investment House. The past 12 months have been particularly difficult for the company, with its share price falling 38% in 2011 to KD0.93 ($3.36) in early November. This drop has been attributed to a lack of clarity over the company’s wider strategy and its inability to raise liquidity by selling off a $12 billion controlling stake to the UAE’s Etisalat, or find a buyer for its Saudi operations, which are valued at $950 million. However, it is not all bad news for the region’s first mobile operator or for the Kuwaiti market as a whole. Zain added 133,000 new subscribers, the highest share in the market, while its subscriber base grew by a further 17% in the third quarter of the year, bucking the trend from the second quarter of the year. Perhaps more importantly, revenue inched up by 1.1%, while the operator has also been able to retain its impressive average revenue per user (ARPU) levels at $51, amongst the highest in the region, according to research firm Business Monitor International. The challenge now will be to prevent further subscriber erosion while maintaining its high ARPU levels. A third-quarter 2011 Kuwait Telecommunications report by Business Monitor International notes, “In future, we expect mobile operators to focus on revenue growth using higher value services. This will largely depend on the roll-out of mobile data networks and the migration of subscribers onto postpaid contracts.” Source: Oxford Business Group

Etihad, Sabre in major IT partnership

Etihad Airways, the national carrier of the United Arab Emirates, has signed a deal valued at more than a billion dollars with aviation computer technology provider Sabre Airline Solutions. The result of an exhaustive selection process, the ten-year deal will see Etihad Airways utilize cutting edge, integrated software across its reservations, inventory, marketing, planning, eCommerce, distribution and departure control operations. The Sabre-created software will be implemented by February 2013 and will significantly reduce the airline’s technology costs while streamlining processes considerably, a statement said. Source: TradeArabia News Service

Du seals Dubai Airport Freezone deal

The UAE's integrated telecom service provider du has inked a strategic partnership deal with Dubai Airport Freezone (Dafza) to provide a comprehensive suite of integrated services to the companies in the free zone. The agreement was signed by Osman Sultan, CEO of du, and Dr. Mohammed Al Zarooni, director general, Dubai Airport Freezone, in the presence of Farid Faraidooni, du chief commercial officer and other officials. The partnership will offer an all-inclusive service that will provide wide-ranging state-of-the-art telecom facilities to the award-winning free zone, said the two officials after signing the deal. In addition to the full suite of broadcast, mobile and fixed telecom services, du will also offer customized business solutions and dedicated account and project managers, taking advantage of its advanced network, they added. Source: TradeArabia News Service