Convergence kings

The fifth Arab Advisors Media and Telecoms Convergence Conference concluded in Jordan last month, with key stakeholders agreeing to collaborate on key media and telecommunications convergence projects.
Nawras CEO Ross Cormack.
Nawras CEO Ross Cormack.
MBC COO Sam Barnet.
MBC COO Sam Barnet.
Du CEO Osman Sultan.
Du CEO Osman Sultan.


The fifth Arab Advisors Media and Telecoms Convergence Conference concluded in Jordan last month, with key stakeholders agreeing to collaborate on key media and telecommunications convergence projects.

It might appear on the surface that since the first Arab Advisors conference on this subject, there has been little progression in the inevitable convergence of the telecom and media industries.

The reality is that there has been very little for them to collaborate on.

MBC launched its mobile programming division MoBC last year, DVB-H based mobile TV trials have been and gone with commercial services not expected till later this year and IPTV penetration remains limited to a few pay TV platforms and closed networks in hotels and offices.

"The telecommunications and broadcast sectors are two industries that have been dancing around each other globally and locally, but haven't really enjoyed great success working together," claims Ross Cormack, CEO of Omani telco Nawras.

"In the mobile industry, we tend to feel we own customers - so we have an enormous jealousy of anyone addressing our customers through our platforms - and somehow we feel like we are losing control of that."

Du CEO Osman Sultan suggests that although the distinct differences and heritage of the respective industries remains present there is an overall feeling between the two that they are facing what he termed "shared uncertainties".

"It's the coming together of players from completely different backgrounds. These players are used to having their own rules and their own logic for decades, and they are not sharing this with anybody else," says Sultan.

"The good news is that everyone feels like they have to share now, but the bad news is that there are still a lot of question marks over what we have to share."

High mobile penetration in key markets across the Middle East offers a significant potential audience.

Many early adopters in the region have already invested in sufficiently advanced devices to receive mobile TV and would seem willing to make further investment if necessary.

"We believe that customers in the region are eager to access TV services using cellular devices, but I think there needs to be some assessment of the need for information, the addressable market and the speed of technology to market," adds Sultan.

Telcos are becoming increasingly preoccupied with developing content strategies for their fledgling mobile multimedia services.

Nawras' Cormack believes developing the right content strategies will prove fundamental to the long-term success of mobile TV services.

"I think the future depends on us [telcos] recognising that customers do have a choice. We have to meet their needs, we will be able to bring these industries together via content development in a way that is meaningful for customers," Cormack states.

The physical limitations of mobile devices are clear: small video screens, generally poor sonic quality and short battery life, conspire to make them generally unsuitable for viewing long-form content.

These same limitations provide strategic challenges for network operators, device manufacturers and broadcasters alike.

"We are trying to produce the best quality and most relevant content possible," says Sam Barnet, COO of MBC.

"We have different capabilities, skills and assets. MBC as a FTA broadcaster has no business in the platform market for example. Our focus is on content, planning and marketing - each attribute is highly sought by network service providers."

Barnet gave the example of MBC Action, which he says quickly achieved a five percent audience share after launch on the basis of the new channel's branding.

"I believe that we add value as a media company to the content we create. The content [on MBC Action] was essentially old content we'd played on MBC 2 and MBC 4. But presented under new branding, it became an interesting new source of content," claims Barnet.

There is no doubting that leaders from each of these respective industries are aware of their own core competencies and the value that each could draw from sharing this experience and knowledge.

Batelco CEO Peter Kalaiaropolous reiterates Barnet's claim that these boundaries should not be blurred.

"We are still struggling to deliver base stations on time and on budget, let alone playing a game that we don't understand very well," says Kalaiaropolous.

"There is a question in terms of timing. Do we want to be leading edge and maybe risk significant investment, or do we really want to focus on taking content from a range of providers and deliver it as quickly as we can? Most importantly, as telcos, how do we make money out of these services?"

Stakeholders must also decide whether to pursue subscription or ad-funded content delivery models.

While most content providers are more accustomed to pursuing advertising revenues, cellular devices remain unconvincing platforms for advertising purposes.

A report published earlier this year by Forrester Research revealed that most consumers remained dubious of mobile advertising services, with the vast majority branding them "annoying".

This proves to be a concern for both parties and promotes the subscription model as a more sensible choice.

However, question marks remain regarding the willingness of subscribers to pay monthly rates for unheralded services that can only be accessed using high-end handsets and in some cases relies on a separate network infrastructure that may not offer the same degree of coverage that subscribers are accustomed to.

The announcement of du's mobile TV service in the UAE appears to address many of these concerns.

The inclusion of a daily subscription option, on top of the monthly package, to capture spontaneous purchases would suggest that du is not convinced about this willingness to commit and pay upfront either.

As the format and delivery of mobile advertising continues to be honed in to an effective tool, and one that is accepted by users, it would appear sensible for operators, and broadcasters, to offset charges with advertising as much as possible. Ideally, until they are free.


Content capers
• The region's telcos have been tentatively stepping into the content business primarily through interactive options, music and games.

• Batelco experimented with its iTeq service for handheld PDAs in 2006.

• Orange Jordan has declared its intention to aggregate a bank of content in the March issue of Digital Broadcast.

• UAE operator du however, has stolen a march on the competition with the launch of a 21 channel service.

In addition to three du branded channels, the telco has also put together agreements with a host of local and international content owners including MBC, Rotana, Zee, BBC and Al Jazeera

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