Dubai: Despite the growing broadband opportunities across the Middle East and Africa (MEA), the region is still a far cry away from mass broadband adoption when taken as a whole, said telecoms advisory and investment company Delta Partners.
"In developed broadband markets in Middle East and Africa [MEA], the main challenge for players would be to create a compelling value proposition that will enable the previously unconnected to jump on the broadband bandwagon immediately, bypassing dial-up all together," said Javier Alvarez, partner at Delta Partners.
He added that providers seeking to tap the internet-savvy and high-spending customer segment, have to provide higher access bandwidths (up to 4Mbps), bundled offerings that combine internet access, voice telephony, and video (IPTV or video on demand).
Incumbent operators in such markets are revamping their broadband value propositions for previously unconnected and internet-savvy customers.
According to WCIS predictions, cellular technology is changing the landscape in emerging markets. Today there are about three billion mobile customers worldwide, and that number will grow to nearly five billion by 2012, when two-thirds of the global population will have mobile phones.
The phenomenal growth in mobile penetration (with a global 2000-06 growth rate of 24 per cent) has overshadowed fixed-line, where growth has stagnated (with a global 2000-06 growth rate of five per cent), due to a lack of investment.
With the emergence of broadband as a growth engine (with a global 2000-06 growth rate of 61 per cent) for the stagnating fixed-line business, coupled with innovative new broadband technologies that either reduce capital expenditure significantly (such as WiMax) or enable a much wider range of value-added services (such as FTTx), the fixed-line is in the news again.
The MEA region now attracts players from the mobile and ISP markets (such as Umniah's and Zain Bahrain's WiMAX licences, Mobily's mobile broadband push, all of whom are keen to ride the wave of growth expected from broadband.
On the other extreme, the littoral Gulf states, with a high dial-up internet penetration coupled with a high income population and more IT savvy businesses, have managed to migrate many of their dial-up customers to broadband over the past couple of years.
"In the same period, countries such as South Africa, Saudi Arabia, Egypt, Morocco, and Jordan have successfully put broadband on a rapid growth trajectory, thanks mainly to a successful push from governments coupled with the incumbent operators' need for growth drivers in their fixed-line business," he said.
"We expect the mobile operators in these markets to start positioning themselves to capture a share of the broadband pie during 2008, either through 3.5G technology and eventually LTE, through a WiMAX license, or acquisitions of existing broadband players in their respective countries," he said.
