The Middle East's first mobile virtual network operator (MVNO), Friendi Mobile, launched in Oman today, setting in motion what industry watchers expect to be a trend for the region.

James Middleton

April 27, 2009

3 Min Read
First MVNO launches in Middle East
First MVNO launches in Middle East

The Middle East’s first mobile virtual network operator (MVNO), Friendi Mobile, launched in Oman today, setting in motion what industry watchers expect to be a trend for the region.

A second MVNO – Renna, expected to launch services soon, will also piggyback on the network of incumbent operator Omantel, which has suffered a significant loss in mobile market share in the face of competition from second placed operator Nawras.

Analysts at Informa Telecoms & Media believe there are good opportunities for MVNOs in the Middle East, particularly in the GCC states (Gulf Cooperation Council, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE), where there are large expatriate communities.

Figures from the United Nations reveal that there were 12.8 million non-nationals in the GCC states in 2005, accounting for 36 per cent of the total 36 million inhabitants in the region. India is the single largest contributor of expatriates in the GCC area, but there are also sizeable expatriate communities from Bangladesh, Pakistan, the Philippines and Sri Lanka.

“There is a clear opportunity for MVNOs in the Middle East to offer the sizeable expatriate communities here customised services with features such as call-centres that are available in their own language, and value-added services including content offerings that cater for their interests and backgrounds,” said Matthew Reed, senior analyst for Middle East and Africa, at Informa. “Significant numbers of people within these groups are also likely to find the offer of discounted calls – both local calls and international calls – attractive so that is another area that MVNOs should look at.”

Reed expects that the progress of MVNOs in Oman will be closely watched across the region, by operators, regulators and potential MVNOs. Jordan has also advanced legislation to pave the way for MVNOs, but none of the country’s three GSM operators have so far been willing to host MVNOs. Bahrain, Israel and Turkey are also discussing legislation to allow MVNOs to enter their markets.

Nevertheless, the analyst expects the MVNO market in the Middle East and Africa to remain modest in size for some time. Informa predicts there will only be 2.65 million MVNO and reseller subscriptions in the Middle East and Africa at the end of 2009, rising to 3.77 million at the end of 2013, with South Africa likely to remain the largest single MVNO and reseller market in the region.

Community-targeted services, which focus on ethnic or national groups, are the second largest category of MVNOs worldwide, accounting for 20.2 per cent of MVNOs globally in 2007, according to Informa. But MVNOs also offer an opportunity for companies from other sectors – such as retail – to move into the telecoms services market. In the Middle East, mobile handset and devices are usually sold by independent retailers rather than by the operators, opening up an opportunity for those handset retailers to become MVNOs and extend their relationship with customers.

In Europe, supermarkets have been among the most successful MVNO operators and it’s possible that experience could be transferred to the Middle East. The Carrefour and Ikea chains, which both have a presence in the GCC, also operate MVNOs in Europe.

Meanwhile, in the United Arab Emirates, Etisalat has announced plans to roll out Nokia’s Ovi platform to help boost mobile internet services in the Middle East. The promoted services include maps, navigation and games on Nokia devices.

Subscribers to Ovi Maps and purchasers of N-Gage games can now choose to combine their payments for these services with their Etisalat account. In the future, Nokia said it will extend its partnership to other Etisalat operations in the Middle East and Africa.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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