Company Strategy

Du: The Arabic internet

Dubia-based operator Du is setting the pace in developing Arabic content for the internet and pushing it out to service provider across the Middle East, as Guy Matthews reports.

The Arabic-speaking population of the Middle East and North Africa (MENA) comprises around 6% of the total world population, roughly equivalent to the headcount of the European Union and one and a quarter the size of that of the US. Yet until very recently only a tiny proportion of all internet content was geared to speakers of Arabic.

Thanks to a wave of initiatives across the Gulf region, this disproportion is starting to be addressed. The Gulf’s wealthier nations have been competing for a few years to be the main regional stopping-off point for data traffic flowing between Asia and the developed west. Now they are fighting for the status of chief hub of the emerging Arabic internet.

Dubai-based alternative carrier Du has been an important pace setter here. In 2007, shortly after it launched its first mobile phone services, CEO Osman Sultan saw that there might be a future in Du being more than a regular telecoms service provider. Faced with playing second fiddle to Etisalat in its own home market, Sultan saw that his company ideally needed to break into content, not just for the consumption of UAE citizens but the whole of the Middle East and wider Arabic-speaking region.

From its head offices in Dubai Media City, Du spent a couple of years formulating a content strategy, now launched as Digital Arabia for which it is busy finding wholesale customers among the region’s lengthening list of internet service providers and mobile operators.

Digital Arabia’s first product, launched in December 2009, was Eurosport Arabia, an online portal developed in partnership with French media player Eurosport. Within 100 days of launch, the service had pulled in two million unique visitors, according to Comscore market research, a feat duly noted by advertisers of the calibre of Visa, Nike and Etihad.

“Eurosport Arabia was our first foray, and a compelling proof of our core thesis that Arabic-speaking people are underserved by internet content,” says Raghu Venkataraman, Du’s chief strategy and investments officer. “In, say, France you’ve got lots of choice for places to go for information in your own language, while historically you’ve been lucky if you find one here. There’s been no breadth or depth to it. Our sports content is global, regional and local – with the emphasis on regional and local. It’s been very successful in a very short period, and it’s comforting to know we are on the right track.”

He says the decision to start from day one with both regular internet and mobile internet content was important, recognising the central role of the mobile phone in Arabic life: “Smartphone demand has been phenomenal among users in the region, but we’ve had to recognise too that there’s a large installed base of ordinary 2G phones,” he says.

Venkataraman says that he is now pushing out Digital Arabia to a base of service-provider customers across the Middle East: “We want our customers to be able to be more than just a dumb pipe, to provide them with services they can take to their subscribers, as well as help them to monetise content as they address end users across the MENA region,” he says. “We’re transforming ourselves too, as well as the thinking of our customers. We are having to take on this market with a mindset that’s distinct from a traditional telecoms operator. Our team at Digital Arabia is not drawn from a telecoms background, but from organisations with experience of content.”

With Du already into the video-on-demand and IPTV markets, it seems likely that a broadcast side to Digital Arabia with associated music, news and shopping services will soon follow existing online and mobile efforts. Then perhaps, as Du has already hinted, a full transformation into a social networking platform will follow.

Tellingly for the future of the Arabic internet, the Arab Advisors consultancy has identified several regional broadcasters moving in the opposite direction by migrating beyond existing satellite TV services into online content, having perhaps spotted the opening forged by Digital Arabia.

“Spurred by the increasing uptake of internet services in the Arab world, many channels in the Arab TV industry have established an online presence,” says Jawad Abbassi, general manager of Arab Advisors. “Many have channels that have corresponding online portals, demonstrating that the integration between the satellite channel and its online presence is relatively strong.”

Venkataraman acknowledges that there is the bigger picture, beyond simple commercial considerations, of helping to establish the UAE as the content hub of choice for the wider region: “It’s a logical place for that role,” he says. “It’s already a media hub, and in practical terms a hub too for things like advertising. The production of regional online content is an opportunity in very much the same line. At Du we see ourselves as a catalyst here. But along with our ambition is an openness to new business models and ideas. We know we can’t do this alone. It’ll take stamina to succeed and there will be hurdles and pitfalls.”

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