At this year’s GITEX technology week, recently held in Dubai, MEF CEO Rimma Perelmuter was invited to speak on a panel session exploring the theme of “hyper connectivity” and what it meant for the region. Appearing alongside Peter Olu, Director, NITDA and Dr. Suleiman Al-Hedaithy, Chairman of the Board, FTTH Council MENA, Rimma presented the mobile aspect of the equation and shared some findings from MEF’s own upcoming Global Consumer Survey to illustrate the opportunities mobile spells for this exciting group of markets.
The Middle East is of significant interest to our members, and my time at the recent GITEX technology week presented a powerful confirmation as to why the region is such a vibrant and exciting place to business. As I told the audience during the GITEX panel on “hyper connectivity”, there are enormous opportunities for growth, especially in the apps market as smartphones become increasingly prevalent, powered by a new generation of LTE networks. But data transfer speeds and shiny new devices by themselves are not enough, consumers also need a compelling content proposition.
We need to listen to what they want, and understand what drives them to do more with their mobile, and likewise, what barriers are preventing them doing the things they want. For the past four years, we’ve worked closely with our member On Device Research to conduct a global survey that allows us to better understand how consumers use their mobile devices. The survey covers 15,000 consumers from around the world, and for the past two years the data has included Qatar, Saudia Arabia and UAE . The results paint a picture of a vibrant region that is embracing mobile services, and is even ahead of the curve in some cases – 75% of mobile internet users for example have bought something on their mobile device in the 3rd quarter of 2013, a figure significantly higher than the global average (66%) and representing a 10% growth from 2013.
Creating a vibrant digital community for data services
Recent forecasts into the growth of the region suggest that mobile revenues in the Middle East and North Africa will grow at 3.3% to $59 billion in 2018. Mobile handset data will be the main growth driver. In 2018 it will be worth $8.3 billion, or 9.5% of revenue, up from 5.9% in 2013. The demand for data is fuelled by the increasing adoption of smartphones, which will account for 34% of active handsets by 2018, up from 15% in 2013.
Compelling content & commerce are certainly key drivers and here we’re seeing several developments. In the last 12 months alone we have seen Ooredoo launch Twitter for Mobile in Qatar, banking apps from Orange in Jordan, and Etisalat bundling unlimited data with BlackBerry devices with free access to BBM, WhatsApp, Facebook and Twitter.
The SMS market is alive and well in ME. It remains a popular payment mechanism for consumers across the region and is still thriving, especially in less affluent markets with feature phones. Twice as many consumers in UAE use premium numbers to pay for products via their mobile than the global average (15% v a global average of 7%).
Uptake of Apps in the ME
The continued rise of activity, along with increased market share for smartphones and faster networks is fuelling increased data usage particularly around mobile content and app. Our study also showed that the region is leading the way with ‘newer’ services as well particularly in areas such as mobile money and mHealth.
ME consumers in UAE, KSA & Qatar show a real enthusiasm for all kinds of m-banking services and are taking them up faster than other regions. 79% have used an m-banking service in the last 6 months vs the global average of 69%.
Among ME mobile users the most popular apps categories are games (39%), social networking (36%) and photo & video (33%). mHealth is also way ahead of the curve here. ME consumers are more likely to have witnessed the use of mobile devices as part of their medical care (57% vs the 44% average). This is especially true in UAE (62%).
Additionally, ME consumers are more likely to make charitable donations via mobile and download free widgets than the global average. And ME is particularly fond of so-called “Showrooming”: finding an item in a shop then searching for a better price on a mobile device.
ME consumers show great enthusiasm for various types of services and in some cases are embracing them at a faster rate than in other regions. But of course, an opportunity for some is a threat to others. Operators, particularly those in GCC countries, need to be prepared for the significant impact of over-the-top (OTT) messaging and eventually voice, as the penetration of smartphones passes 50%. ME operators have worked hard to build high-speed networks. In Saudi Arabia, UAE, Qatar and Kuwai, LTE networks are up and running and should reach most of the population by 2014-5. LTE networks are in the works in Egypt and Morocco.
This forward-thinking approach to infrastructure is bearing fruit. When asked why they don’t purchase more via their mobile, ME consumers are less likely to blame poor network speeds compared to mobile users in other parts of the world.
Pricing is also important and, once again, it seems like operators in the ME have got it right. ME consumers appear less concerned by the price of mobile data compared to the global average – fewer people claim not to worry about data pricing and fewer people monitor their usage to ensure they keep to their allowance but this could also reflect the more affluent markets we surveyed.
Full survey results of MEF’s 2014 Global Consumer Survey, including those for the Middle East will be unveiled at MEF Global Forum on November 19th. We look forward to sharing these highlights with our community to support a trusted ecosystem with the consumer at the center.