13 May 2011
Capacity invited a group of key players in the Middle Eastern market to share their views on
the future of content provision in the region.
Rashid Ali Al-Ali (RAA), director international sales, carrier and wholesale services, Etisalat.
Hosam El Sokkari (HES), head of audience, Middle East, Yahoo.
Scott Sullivan (SS), VP strategy C&WS, Etisalat.
Andrew Grenville (AG), EVP of investments (special projects), du.
Erik Kreifeldt (EK), senior analyst, TeleGeography.
Internet penetration in the Middle East is now
estimated to be above the world average. What have been some of
the key developments over the last few years in achieving
RAA: For the last seven years, it has been
very obvious that internet penetration has been increasing
rapidly. According to ITM research, fixed-broadband household
penetration in the Middle East rose from 0.71% at end-2005 to
11.35% at end-2010. But for the last two years – in
particular during 2010 – we have also noticed a lot of
content being hosted in the region. This is really benefiting
the network; enhancing both quality and speed. So really
it’s not just the internet penetration that is
just going up. The network utilisation is improving too.
SS: I also think it is a case of
deregulation benefiting the region. There’s more
competition – more competitive carriers in the region
introducing mobile broadband and LTE services. If you look in
the UAE, for instance, Etisalat has been pushing forward with
its fibre-to-the-home (FTTH) deployments, and Abu Dhabi has
recently become the world’s first fully connected
FTTH capital. Other areas are following very quickly in this.
There is simply a lot more broadband access now.
AG: I think that the population demographic
of the region really adds on to the points which have already
been made. Across the region, there is generally a very young
set of consumers – and if they are anything like my
children, they think they have an absolute right to data at any
given time in any given place for very little money.
The demographics alone in the Middle East are helping to
push the uptake of devices that consume more data on mobile or
HES: Having been in Cairo during the
revolution, I think there is a lot to suggest there is a strong
adoption of political activism in the region using
internet-connected spaces and I think we will see more and more
The internet is no longer being adopted just as a means of
communication; it’s also there for achieving
objectives – social, political or otherwise.
How can Middle Eastern operators partner with
content providers to help generate more content in the
SS: I think it’s all about
partnership with the content providers and sometimes that can
be an uneasy relationship. Carriers don’t want to
be reduced to the 'dumb pipe’ so they are looking
to provide more value to their customers and typically this is
in partnership with content providers.
AG: There has always been a question of how
operators can stop themselves being relegated to just carriers
– and these discussions carry on today. Most operators
have taken different strategies to try and move into different
areas of the value chain. du, for example, has launched its own
online portal called 'Anayou’. The site is a
digital destination that provides online shopping,
entertainment and gaming. It’s an ambitious
project that aims to be a part of the Arab community and
encourage content to be generated and consumed here. There are
also ways for operators with broadband networks to gain a share
of the revenue. The way movies are consumed, for example, is
changing from DVD rental to IPTV. Now if a family in the UAE
downloads a movie via du IPTV, our company receives a share of
the revenues. It may not be original content from this region,
but it’s a new stream of revenue for
RAA: In terms of most demanded content,
this constantly changes. The leading one or two content
providers might stay the same, but the rest keep changing and
this is largely down to network utilisation. The platform
itself is effectively sequential. Etisalat has therefore
focussed on providing the right infrastructure – which
is how we came up with the idea of the Smart Hub. The
infrastructure, the capacity and the access is now available to
host the most demanded content in the region. I feel the Middle
East truly deserves further investment in content delivery
networks and it will give a great user experience once the
companies come here to host their content in the region.
HES: As more of a digital content company,
Yahoo Middle East is trying to do what we call 'bundle
experiences’. Users are no longer interested in
just pure information – they like to consume
information and at the same time are interested in seeing
people define the information they are viewing.
We are therefore working on running two parallel content
channels on our gateway. We will have the media platforms and
at the same time the relevant communities and forums. We have
experiences round these that people are eager to consume, and
the more they consume, they more reflect on what on they
consume and create more valuable content that wants to be
How prominent is mobile broadband in the overall
demand for internet in the Middle East?
SS: It’s going to be dominant.
That’s where the demand for broadband in this
region is primarily coming from – and in fact not just
here but also in Africa and India, where fixed-line
doesn’t really exist.
There are big investments being made to support the demand
for higher speeds to support mobile data. And this investment
isn’t restricted to just the networks –
we are deploying more submarine systems to support the
international content coming from overseas. In our case, we
have also just announced a land cable – the Regional
Cable Network (RCN), which will eventually offer a 12 terabyte
connection from the Middle East to Europe.
EK: I think mobile broadband is now the
presumption in the Middle East. In more developed cities in
Europe and the US it is the other way round, where you do have
a more dominant fixed-line scenario.
But the technology is there and the value is in the
mobility, which is more than enough to compensate for the
difference between a 100G fixed-line and 40G mobile broadband
AG: There is a behavioural change that is
also driving a lot of this. Today’s youth
– their very lives centre on these Smartphone devices.
I think the existing price points are very sensitive for the
mass market level, but there is also the expectation that
people will spend more as more of their lives centres around
the mobility created by these devices. The mobile broadband
uptake is only going to increase and while I think for
operators the ability to generate and retain content in the
region is going to be critical, the overall amount will be so
vast that we will still be facing the challenge of providing
enough cable capacity East and West to handle it.
RAA: I believe because of the network
access charges, the broadband access in this region is still
relatively expensive compared to what is available elsewhere.
The region has already experienced a big drop in prices in
2004, but once the demand and supply breaks more even, the
internet utilisation will be unbelievable.
Finally, the World Bank estimates there are more than 320
million Arabic speakers worldwide, but less than 1% of all
online content is in Arabic. How can operators in the region
help leverage this gap?
HES: Since acquiring the online Arab
community Maktoob.com in 2009, Yahoo has access to a mass of
end-users in the Middle East. Yahoo has provided the technology
and experience to manage this content and we are also working
with the Arab entertainment company Rotana to use and stream
its multimedia content.
We are therefore investing heavily in this region. We
aggregate a lot of content from the biggest publishers and
media providers as well as producing and commissioning our own.
Investment in Middle East content is a critical issue.
AG: The regulators here are moving in the
right direction – but I think we need to see more
local peering and access to critical facilities such as landing
stations. Then, the operators will collectively be able to
support the growth of content.
SS: There seems to be a pattern of how the
content providers operate – they start in Los Angeles,
move into Europe and then on to Asia. Only after that do they
often start noticing the demand in the Middle East. We would
encourage content providers to come here sooner rather than
later as the opportunities and partnerships for distributing
content in this region are now available.
RAA: Things are changing fast, but we are
aware that content providers are sometimes concerned by the
legal issues surrounding broadcasting in this region. We are
working to find a way of taking care of these concerns, and
providing a greater understanding of the situation in the
region so that together we can develop a way to suit both
EK: It’s beneficial for the
content providers to have content hosted nearer to the users as
it enhances the user experience. There are challenges to doing
this in the region at present – which is why the US,
Europe and Asia are still at the forefront of hosting content.
But the demand is there and so are opportunities for carriers
to enter the value chain.
Capacity Middle East,