Loud and clear

The Middle Eastern mobile market is fast-growing and complex, with more than 60 million mobile subscribers.

According to statistics provided by the Telecommunications Regulatory Authority (TRA), mobile phone penetration in the UAE grew by 38 per cent in 2007, while internet usage grew by 32 per cent. Also, the ratio of mobile phones to every 100 people stood at 166.4 units in 2007, compared to 126.6 mobile phones per 100 people in 2006.

In an interview with Express, Rasheed Joumblatt, TRA spokesperson, said the number of mobile users in the UAE can now be estimated at 7.6 million.

Hot Telecom, the Canada-based telecom expertise group, predicts in its research that the number of UAE's mobile customers will grow by an average rate of 4.3 per cent over the next five years to 9.7 million and a penetration of more than 200 per cent.

In the Gulf, the UAE has one of the most developed telecom markets and technologically advanced telecom infrastructure. Numbers from the World Economic Forum reveal that the UAE ranks first in the Arab region in the Networked Readiness Index (NRI). According to Farid Faraidooni, EVP Commercial, Du (which started its operations in the UAE in February, 2007), "Although current mobile penetration in the UAE is more than 120 per cent, 3G penetration is still below 5 per cent. Growth potential for 3G still exists and consumers can expect more content and applications in this market from service providers to stimulate 3G growth." Faraidooni also said that with the current low 3G penetration in the UAE and across the Middle East, the 4G system is not likely to take place within the next two years.

Collaboration of manufacturers

"The deployment of 4G will also require the collaboration of handset manufacturers to produce mobile devices with higher processing power, lighter, richer colour screens and longer battery life to handle the multimedia and interactive services of the future applications. The current 3G bandwidth is sufficient to deliver good-quality mobile applications such as video messaging, mobile TV, music streaming and multiplayer games to consumers," he says.

Roaming services

With consumers in the UAE expecting more and more services that make life simple and easy, the experience now goes beyond mobile calls and messaging. For instance, Etisalat is to offer mobile remittance services from the UAE to India in June 2008, a service that promises to help millions of expatriates send money in seconds instead of queuing at exchange houses every month. According to Gulf News reports, Etisalat expects 350,000 people to use the services in the next three years. Registered users of the mobile money transfer service will also be able to access it from overseas through Etisalat's roaming services. The new service is designed to be cost-effective, convenient and secure and will have low transaction costs. Etisalat will work with Mashreq, Tata communications, Idea Cellular and HSBC India to roll this out.

Using the mobile as a credit card is perhaps next in line. In an interview with Gulf News (April 12, 2008), Rashed Majid Al Abbar, senior product marketing manager for Etisalat's e-business services, said by the third quarter of 2008 Etisalat's m-commerce pilot programme will be launched. Under this programme, customers will be able to buy products directly with their mobile phones. Users will be able to move money from their bank accounts to an electronic m-Wallet, and then use those funds to pay for products and services. Among the youth of the region, it is music downloads, internet browsing and mobile gaming that are gaining importance, says Faraidooni.

"Future generation handsets will need to handle more than just traditional voice, SMS, WAP browsing and downloads. The convergence of mobile technology with web-based content will further trigger the adoption of mobile broadband applications such as high-resolution multimedia streaming, video downloads, advanced interactive gaming, TV broadcasting, advanced location-based services and mobile payments.

"Handset manufacturers would have to take advantage of this potential to produce more powerful devices with sophisticated computing performance, high resolution wide-screen displays, large storage space and long battery life. The good news is that the end game is now in the hands of the consumer," says Faraidooni.

Multiple subscription

According to Leif Olof Wallin, Research VP (IT, Infrastructure and Operations), Gartner, the UAE has a slightly higher use of smart phones than other countries. Smart phones are essentially devices that combine a comprehensive set of functions packed with cutting-edge technology. Wallin also said that most mobile users in the UAE had multiple subscriptions, thereby artificially raising the penetration figures.

"The nature of the UAE market is very heterogeneous. On the one hand you have people using Vertu phones, which are extremely high end, and on the other there are cost-conscious people who live in the country for a limited time and use inexpensive phones. It's a very complex market and the mobile is increasingly becoming one of the most trusted devices.

"From navigation services and m-commerce to even religiously focused services, customers now look forward to additional services and extra facilities all the time," says Wallin.

He says in the current market, 40 per cent of all smart phones have the GPS system. By 2010, 40 per cent of all phones will have the GPS system.

Gartner, in its 11th annual Mobile and Wireless Summit in Chicago in March 2008, observed that with time mobile phones were losing importance, while the value of platforms and services was rising significantly — at least for enterprises. In one of his media interviews, Gartner's Nick Jones, VP Distinguished Analyst, said the interest was now moving towards services or in other words, the market was changing to be a services market.

Unified communications

Jones also said the next few years will see two major battles between Cisco versus Microsoft in unified communications (which will, in turn, have a major impact on enterprise mobility) and Google versus Nokia versus Microsoft versus others in services and mobile advertising.

Simon Baker, Program Manager-Mobile Phones of IDC research, said that for the new-age consumer, the mobile handset is now like a mini computer.

"People prefer computer applications with their phones. So there is a demand for navigation facilities and integrated maps, not just for people who are driving, but also for pedestrians to simply find their way. There is also a demand for smaller and thinner phones for longer battery life."

According to Yolande Pineda, Communications Director MEA, Nokia, "In order to understand customer needs and desires, Nokia has created four categories of consumers. Live — these consumers follow trends and fashion and have an active lifestyle; Connect — people who combine ease of use and elegant looks; Achieve — people who want to have a work lifestyle balance; Explore — these consumers love cutting-edge technology and prefer all-in-one handsets that combine excellent music and navigation capabilities, imaging functions and fast internet access.

Mobile accessories

"Consumers in the UAE are interested in the latest technology and the most advanced features and applications. Therefore, they tend to look for the latest devices that suit their needs the most," says Pineda.

Together with the growing mobile handset market, the UAE is also a good region for boosting the sales of mobile accessories. Biphas Basumatari, Managing Director of Mile Soft, says, "The mobile accessories market can be estimated to be annually worth $20 million (around Dh74.3 million). Consumers here prefer to use high-end mobile accessories for their PDA phones like the BlackBerry, I-mate or the Nokia Communicator.

"We see a lot of demand for the latest Bluetooth headsets, luxury leather cases for mobile phones, car mobile holders, travel charger kits (so a consumer doesn't need to change chargers when he is travelling) and GPS maps. Consumers in Dubai are conscious of new luxury items and are updated about the latest trends in the world of communications," says Basumatari.