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Karim Taga stresses the need to educate people about the benefits of broadband, particularly in emerging markets.

Content is king

Duella points to services such as high definition TV for individual household members, an increasing volume of user generated content and high quality video conferencing as just some of the potential drivers of demand for bandwidth in the coming years. But there will also be new services that take the industry by surprise, in the same way that the popularity of social networking sites caught many web analysts by surprise.

"You might see more people producing their own content to be picked up on the web and we could see more use of applications like YouTube and social network sites which are bandwidth heavy," he says.

Higher bandwidths could also allow more household appliances to connect to the internet, perhaps through a home server. For example, smoke detectors and surveillance cameras, as well as more obvious applications such as TV, could feed into a home networking server.

"More and more content will be placed on some kind of a server, or a disk in the household which will be accessed from the different members of the family through a number of appliances - it could be a PC or a TV. But of course this content might become critical and you might want to back it up somewhere," Duella says.

"This incremental back up might represent several gigabytes of data, further driving bandwidth demand."

In stressing the importance of content as a driver of broadband, Duella points to the experience of European operators. When broadband services were first launched in Europe, it was "received with mixed feelings", he says. People were questioning why they should give up their dial up service, which would have been cheap, to purchase broadband mainly because they failed to see a clear reason to use broadband, according to Duella.

"Broadband is something that will come when you have benefits of using it, and this is related to content. Accessing appropriate content is a very important element."

Arthur D Little's Karim Taga agrees that raising awareness of the benefits of broadband is vital to increase its use. "It is not about infrastructure, it is about using a service so you need to satisfy the needs," he says. "There is a lack of awareness and a need to make people understand why they should need internet at all."

But in some areas, the signs are encouraging, even compared with more developed markets. Taga points to a growing demand for education and e-learning in the region and suggests that users might find more constructive ways to use broadband in the Middle East than in many Western countries, where many people simply access the internet solely for the purpose of entertainment.

"I see much more consciousness around that compared with Europe or the United Stares where we only talk about social networks and consuming free TV," he says.

"So that is not so much in the foreground here which eventually could lead to a more healthy broadband market development."

Playing catch up

But despite the huge growth experienced by broadband in the Middle East in the past few years, the sector still lags behind most Western European countries, with far lower penetration rates and also a less developed market for services and applications that depend on broadband internet.

"The mindset is not there yet in the Middle East to use the internet as a base for many services and applications," says Ghattas. "We still lack in this area. Many people are not feeling comfortable to run their business over the net, and that is a setback because a lot of the applications, even though they are developed, are not used to the extent where they start bringing the revenue back, substituting the capital investment which has been put in."

But the situation is changing and broadband is gaining momentum in the region among operators, vendors and regulators, according to Ghattas, who adds that when one or two governments decide to launch initiatives to promote broadband, it will help push other countries in the region to do the same.

Duella agrees that additional support from government agencies could help speed things up, whether in terms of investment, regulation, or raising awareness of the benefits of the internet. With PC penetration quite low in the Middle East, efforts by governments to ensure that PCs are installed in households and schools are also helping to drive broadband growth.

However, Duella also points to broadband pricing and PC penetration as important factors in internet penetration, particularly in the current economic climate. While hard up consumers may cut back on internet use more readily than mobile use, Deulla stresses that operators can continue to encourage broadband use and take up by offering packages such as triple play, although he concedes this might depend on how competitive the country in question is.

"An appropriate package in terms of pricing and an appropriate bandwidth that will make customer searches easier with broadband could encourage take up. If you can combine the internet access with the voice and content, offering triple play packages, that is certainly something that would be appealing to customers."

Customer contact

As one of the people responsible for the huge increase of broadband users in Saudi Arabia, Saad Dhafer, VP home business unit, STC, has a clear view of what operators need to do to strengthen their broadband business.

For Dhafer, it is vital that operators put the customer experience at the centre of their broadband offering.

"Globally, establishing business models in a changing broadband ecosystem is a growing challenge," Dhafer says. "Ever changing trends, different lifestyles and different forms of media are challenging operators to rethink and reposition their business model.

"Operators need to look at important elements in that. Operators have to monitor trends every quarter, and communication with users is vital." He adds that the way broadband services are marketed is also important and "plays a big role in adoption of services" and that after sales support is equally important.

In particular, operators need to ensure their broadband service is always working at maximum efficiency and that the customer experience is seamless, from installation to billing, according to Dhafer.

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