Analysis As anyone who has ever tried to size up a potential friend's personality through their bookshelf will tell you, we are what we read.
Mobile radio breaks ground
As anyone who has ever tried to size up a potential friend's personality through their bookshelf will tell you, we are what we read. Or, in this increasingly multimedia world, we are what we read, listen to and watch. But as media has become digital, it has become harder to display our identities in these ways. A tour through someone's iPod feels more intrusive than a peek at their record collection. Social media has tried in many ways to fill this gap, beginning with Friendster, the social media pioneer that placed heavy emphasis on users filling out long profiles with their favourite books, movies and bands. As social media has evolved from Friendster's deep pool to Twitter's surface splashing, the emphasis has shifted from the virtual bookshelf to the virtual conversation. Enter the mobile phone. This handful of circuitry is fast replacing the bookshelves, record collections and garages full of newspapers as the world's media players and personal digital assistants, led by the iPhone, converge into a single do-everything device. But there was no way to get the "bookshelf effect" from your mobile phone in the Middle East ? until this month, when Hala FM, the Omani radio station partially owned by the MBC Group, tied up with the Friendi Group, the Dubai-based company behind the region's first "virtual" mobile network. They have created the radio station-branded mobile phone service Halafoni, which has ushered in a new game in mobile media. Subscribers to the service can get free music downloads, as well as special access to the station's call-in shows and events. They also get something else: a little "bookshelf" to place on the table next to them while chatting with their friends at the cafe. Halafoni says its service is designed for "a young, trend-setting crowd" - the type of people who listen to the latest releases of pop music and probably know what is going on this weekend. By buying their SIM card from a media company that makes something with which they have an emotional connection - in this case, radio shows - the subscribers are taking part in a new kind of choice when shopping for what to put in their mobiles, one that has as much to do with identity and personal taste as call rates. At the same time, the media companies are also getting a new kind of deal; one that many in the industry feel holds great promise at this time of diminishing advertising revenue from traditional sources. While media companies have been making deals with telecommunications firms for years to get some kind of profit when mobile users consume their media, the deals have not usually been that great for them. But in this new model, the media companies can essentially rent a piece of the mobile network through a mobile virtual network operator, or MVNO. Although the telecoms do get paid a wholesale fee for the use of its infrastructure, the price is discounted, allowing the MVNOs to also sell their SIM cards at a discount. The media companies then get revenue not only from their content, but also a slice of the charges for calls and text messages. At the same time, they are in a unique position to drive sales of their mobile services through advertising and promotions on their airwaves and in their pages. "It opens up access to a number of revenue streams which traditionally sit with the telecoms players," says Mikkel Vinter, the chief executive of Friendi Group. "If they do the kinds of deals that we have done, they will be able to see part of the voice and messaging revenue. "That's obviously why media companies are interested in getting into these kinds of arrangements. They go from getting a part of the content revenue to getting a part of the bigger pie. In return for that, the media companies need to engage in using whatever ads space that they have - the radio channels, television, newspapers." The chance to get a piece of the "bigger pie" has attracted big media companies such as the MBC Group and the Abu Dhabi Media Company, which owns The National, to the MVNO idea. Both said last week they were in talks to roll out their own branded mobile services. In the near term, the biggest challenge that they face will be regulatory, as only Oman and Jordan allow MVNOs. Dr Ammar Bakkar, the group director of new media for MBC, says the Dubai-based satellite television broadcaster has been looking into rolling out a pan-Arab mobile service that would bear the MBC brand. But he has hit regulatory hurdles in some countries. Said Irfan, a research manager in global telecommunications at IDC MEA in Dubai, says many of the other telecoms markets in the Middle East are too young to support the extra competition from a MVNO. "Saudi, Kuwait and Bahrain just went ahead and licensed a network operator to add to the competition, and Qatar have also just had their second licensee launch, so it's not likely that they would have any MVNOs in the market," Mr Irfan says. "But the UAE could be an interesting case because there is no signal that they are going to have another network operator in the market. So having an MVNO added to the competition could be an interesting case." When the UAE's Telecommunications Regulatory Authority (TRA) broke Etisalat's monopoly by giving a licence to du in 2007, it said it would give the new company three years to become established before opening up the market to more competition. Since then, it has said MVNOs would be considered when the time comes to consider a new licence. But the TRA will not comment on the chances of that happening next year. "According to the TRA regulation, the licensing of MVNO is not yet emplaced, yet we didn't refuse any proposal to invest the Mobile Virtual Network Operator as we didn't receive a request for operations of such telecom activity in the UAE," said Fatma el Zahraa Khalil, the executive assistant for corporate communications for the TRA. But Ricky Ghai, the executive director of digital at ADMC, expects that MVNOs will come to the UAE sooner rather