Kim Larsen, executive VP, T-Mobile Netherlands caught up with Kim Larsen, executive vice president of T-Mobile Netherlands at the recent GSM>3G Middle East Telco World Summit in Dubai.

What are the main points you will be making in your presentation?

The main points concentrate around technology enablers for achieving operational excellence and efficiencies, which will be increasingly important as the Middle East markets dry up for customer additions and revenue growth reduces. This will lead to demand of opex reductions which might arise from outsourcing of managed network services, network sharing models, joint venture models, regional centralization of service delivery, near- and off-shoring, etc. Tangible examples of technology related efficiency measures will be provided for Network Sharing and various degrees of managed services. Furthermore, it is important to relay the message that although operational efficiency can be achieved they also come at a cost (i.e., restructuring/termination cost as well as integration investments). Finally, I will address what I call the law of small numbers as an important remedy to achieve general cost efficiencies without engaging in the big initiatives such as Network Sharing which is often complex, time-consuming and in the short term also costly. The law of small numbers basically states that most companies can save easily 10 per cent by simply focusing on minor cost elements across the company.

How is the global recession affecting the Middle East telecoms market?

Judging from most analysts it would appear that the global recession’s impact on the telecom’s market in the Middle East will be relatively light with better anticipated revenue and subscriber growth figures than in comparable saturated markets in Europe. In general I believe that the impact of the global recession will be relatively light on growth markets (e.g., Egypt, Iran, Jordan) in the region, while more mature and saturated markets (e.g., Saudi, Qatar, UAE) will be more sensitive to the crisis. Despite that, most economists expect that the region has seen the worst of the recession in 2008 and 2009 and that very healthy GDP growth is expected to become a reality from 2010/2011 onwards. Mature and saturated mobile markets will need to focus on operational efficiencies to mitigate the risk of negative growth effects of the crises (something they anyway would need to focus on given their market maturity).

What effect are the first MVNOs to launch having on the region’s mobile market?

I would expect that overall voice ARPU will come under pressure and should be expected to decline. Further given the relative large foreign workers segment in many markets of the Middle East you will see MVNO’s focusing on this segment possible with the effect of declining roaming revenues for the established operations. It will force established operations to become more efficient and competitive (i.e., many markets today with only two to three mobile operations) with MVNO’s being introduced focusing on customer experience and quality centricity.

With so many Middle East markets exceeding 100% mobile penetration, where do you see future growth opportunities?

Broadband mobile and wireless access revenues will contribute to revenue growth. In most of the Middle East markets it is anticipated that non-voice revenue would compensate any voice revenue decline (although most markets do anticipate voice revenue growth for the next five years).

What can the Middle East communications sector teach the rest of the world’s telecoms markets?

In general one can and should always learn from other market experiences. Given the success of the Middle East telecoms environment it clearly is important to follow this very closely and learn from the success. Clearly emerging Africa markets as well as other emerging markets in the world can learn from the mature Middle East telecommunications markets how to manage steep growth. Further the whole region benefits from a high degree of cultural-religious and linguistic coherence that is un-paralleled in Western Europe and Asia.

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