x Abu Dhabi, UAEWednesday 26 July 2017

Telecoms companies missing a trick in the Gulf, says Microsoft chief

Telecommunications companies handle just 2 per cent of mobile-phone sales in the Gulf, marking an opportunity for the region's struggling operators, a senior Microsoft executive believes.

Telecommunications companies handle just 2 per cent of mobile-phone sales in the Gulf, marking an opportunity for the region's struggling operators, a senior Microsoft executive believes.

In mature markets, such as the United States, consumers are accustomed to buying phone handsets and subscription packages directly from mobile operators.

But in the Gulf, the majority of consumers buy handsets from independent vendors, said Samer Abu-Ltaif, the general manager for Microsoft Gulf.

"The number of devices that are sold by the telcos directly is only 2 per cent of all devices in the region," he said.

"Here, the telcos are not engaged heavily in that. And there is an opportunity for them to make money," he added. This also applies in markets such as the UAE, he said. That is despite efforts by Etisalat and du to launch packages that include BlackBerry or iPhone handsets.

Gulf telecoms companies are under increasing pressure to maintain revenues because of high infrastructure costs and data traffic, greater competition and the rise of free calling and SMS services.

The average revenue per user for mobile customers has been steadily falling in several regional markets, according to the Arab Advisors Group.

The average mobile-phone user in the UAE spent US$34 (Dh124.88) a month in 2009, compared with $30 last year.

Average revenue per user figures are also declining in markets such as Saudi Arabia, Bahrain, Kuwait and Oman, Arab Advisors said.

Mr Abu-Ltaif said selling mobile handsets marked an opportunity for the Gulf's telecoms companies.

"Today the telcos are under a lot of pressure. They are putting in infrastructure [and] are not monetising enough," he said. "They need to do multiple things in order to diversify their income. And one of them is to become a retailer."

Mr Abu-Ltaif said Microsoft was in negotiation with Gulf telecoms companies about future launches of Windows Phone devices, notably those manufactured by Nokia.

Microsoft hopes its new operating system can compete against market-leading handsets such as the iPhone and those running on Google's Android platform. Finalising deals with local telecoms operators is integral to this, said Mr Abu-Ltaif.

"[What is] critical is that we have the right agreements with the telecommunication companies in the region to ensure that the consumers or business will get a very competitive and comprehensive data plan," he said. "The other point is the completion of Arabic and localisation on the platform of Windows Phone."

Mr Abu-Ltaif was speaking at the US technology firm's Open Doorevent in Dubai, at which some of Microsoft's 1,500 regional partners were present.

bflanagan@thenational.ae

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