20 Mobile


The use of VoIP services is believed to be grow- ing strongly and is cited by Etisalat as one of the key reasons for its declining revenues in the UAE


In the UAE, for example, there has been


an informal understanding that incumbent operator Etisalat would charge relatively high prices for international calls, which are used mainly by expatriates, to make up for the fact that it provides free fixed-line calls between residential lines in the same city or district, a facility that is used mainly by UAE nationals. The UAE’s telecoms regulator has ruled


that only the country’s licensed operators, primarily Du and Etisalat, can offer VoIP services in the country. But neither Du nor Etisalat has chosen to offer VoIP services other than IP PBX services for their business customers. Both operators are believed to use packet-inspection technologies to iden- tify the use by customers of VoIP services such as Skype. They then block that traffic.


Holding back the tide However, it is proving difficult to slow the trend toward VoIP use. The use of VoIP ser- vices is believed to be growing strongly and is cited by Etisalat as one of the key reasons for its declining revenues in the UAE. Etisalat reported that its mobile ARPU in the


UAE fell from AED174 (US$29.10) a month in 1Q10 to AED137 a month in 1Q11, a decline of 22 per cent, which Etisalat said was largely due to a substantial decline in its international- calling revenues as a result of competition from VoIP services. The decline in internation- al-call revenues was so substantial that it over- rode the strong growth in mobile-data-service revenues that Etisalat recorded over the same period, the company said. Rising competition for Etisalat in the mobile


sector from number two operator Du is also likely to have contributed to the decline in Etisalat’s ARPU. Etisalat’s fixed ARPU fell 5 per cent over the same period, from AED124 a month in 1Q10 to AED118 a month in 1Q11.


10 20 30 40 50 60 70 80 90


0 2010 2011 Source: Informa Telecons & Media There has also been a subtle but poten-


tially significant shift in the position of the UAE’s telecoms regulator regarding VoIP. In December 2009, the UAE’s TRA published a new policy on VoIP that expanded the range of VoIP services the licensees can offer to include VoIP calling services to PSTN num- bers in other countries. However, only licensed operators are


allowed to offer such services – and they are not obliged to do so. It remains illegal for VoIP providers such as Skype to operate independently in the UAE (see fig. 1). In Saudi Arabia, there are no formal restric-


tions on VoIP but there is some sensitivity about the topic, with operators and the authori- ties regarding VoIP as a threat to revenues and investment in the local telecoms sector. Nevertheless, local players cannot ignore


the broader trends affecting the industry. Saudi Arabia’s number 2 operator, Mo- bily, has introduced a VoIP service called Roamtalk, which enables subscribers to call home at local rates when they are traveling outside the country. The scope of the ser- vice is limited, but it does demonstrate that Mobily is engaging with VoIP technology. Additionally, in 1Q11 Qatar’s Q-Tel, which


has a portfolio of operations across the Middle East, North Africa and Asia, formed a partnership with Skype. However, the alliance between Q-Tel and Skype extends only to the operations of Q-Tel’s WiMAX operator subsidiary, Wi-Tribe, which is promoting Skype services to its customers in Jordan and the Philippines. In Africa, only about ten countries have


regulations in place that enable VoIP servic- es in some form. In addition to regulatory re- strictions, industry insiders say that factors such as a scarcity of international-gateway licenses, combined with high interconnec-


tion charges, mean that there continue to be constraints on VoIP services. And although there seems to be a broad


trend toward the liberalization of VoIP, that trend is not necessarily irreversible and there are countercurrents. Egypt banned mobile VoIP services in March 2010, in a move that was seen as designed to protect the interests of incumbent operator Telecom Egypt. In Tunisia, the regulator recently ordered the


suspension of Orange Tunisie’s Livebox ser- vices, on the basis that the Livebox routed VoIP telephony traffic over the network of incumbent Tunisie Telecom without an agreement. But the use of VoIP services is thought to


be growing in the region despite regulatory restrictions and uncertainty. US-based TalkFree said in January 2011


that there had been more than 1.5 million downloads of its mobile VoIP dialer, which the company launched in 2009 and has marketed through resellers focusing mainly on the Middle East and Africa. Informa Telecoms & Media forecasts strong


growth in the number of mobile VoIP users in the Middle East and Africa, from 9.21 million at end-2010 to 96.85 million at end-2015. The restrictive, or in some cases opaque,


regulatory situation surrounding VoIP in much of the Middle East and Africa has undoubt- edly hindered the growth of VoIP services in some key markets in the region. But the constraints have only partially held back the trend toward greater VoIP use, a trend that is being encouraged by strong growth in the availability and use of smartphones and data networks and is set to continue. ■


2012 2013 2014 2015


Fig. 1: Middle East and Africa, VoIP users, 2010-2015 Porable


Wi-Fi


www.intelligencecentre.net Middle East Market Review | November 2011


Users (mil. per year)


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