Two of the Middle East's largest media companies are considering becoming mobile phone operators.
Media firms plan to become mobile operators
Two of the Middle East's largest media companies are considering becoming mobile phone operators in a bid to capture a larger portion of the region's lucrative telecommunications market. The MBC Group and Abu Dhabi Media Company, publisher of The National, are in talks to create branded mobile services which would include exclusive content such as entertainment, news and sports designed to match subscribers' lifestyles.
Dr Ammar Bakkar, the group director of new media at MBC Group, said: "MBC is a pan-Arab brand, which means that it is a brand that is strong in any Arab country. So we are not looking to do something in one or two countries, we are looking at something in all Arab countries." MBC, the Dubai-based television company, became the first media group in the region to break into the media-branded mobile market this month. Hala FM, the Omani radio station that MBC partially owns and manages, announced a tie-up with Friendi Group, the Dubai-based company that set up the Middle East's first mobile virtual network operator, or MVNO, in Oman earlier this year.
The result of that deal was a Hala FM-branded mobile phone service that targets young, hip Omanis by offering free music downloads and special access to the station's promotions, call-in shows and events. Oman and Jordan are the only countries in the region that allow MVNOs. This lets companies enter the mobile market relatively cheaply by buying access from existing operators. But Friendi hopes to operate as many as 20 virtual networks in the region as the regulatory barriers come down.
Mikkel Vinter, the chief executive of Friendi Group, said: "We do have a relationship with MBC Group where we are working together to do things on a bigger scale in the region." Dr Bakkar said that in countries which did not offer MNVO licences, MBC was looking into launching virtual mobile brands by forming partnerships with existing telecoms operators. "The whole industry is talking about this possibility," he said.
Among those talking is Ricky Ghai, the executive director of digital media at ADMC, which owns an array of print, radio, television and digital offerings. "We are in discussion with an MVNO operator," he said. "It's part of our strategy, not just because we want to be part of that space, but because we are a media company which is evolving our brands to stay connected to our customers. Whether it is print to online to mobile, or on the device side, we need to make sure that they are connected to their customers."
Mr Ghai said he believed the success of Oman's example would put pressure on the UAE's Telecommunications Regulatory Authority to open up the market. The authority has said that it planned to give du, which was launched in 2007, three years before issuing another mobile licence, and that when that happens it would consider giving that licence to an MVNO. The advantage of tying up with MVNOs for media companies lies in their ability to share the revenue from phone calls and text messages, as well as use the mobile platform as a way of strengthening their brands.
"There's a rich margin for us there, in terms of being a virtual telephone operator," Mr Ghai said. Not all Middle East media brands are jumping on the bandwagon. Phil Lawrie, the director of global distribution for Al Jazeera, said his media company had been approached by MVNO operators and had spent time evaluating the possibility, but for the moment he remained untempted. "It's a digression from what we see as our core business, which is to provide world-class content to world-class delivery platforms," he said. "For me personally, I'm still a little bit sceptical about the ratio of benefit versus headache that comes about from the MVNO."