Ringing in the changes

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Dwindling population growth is not a concern, says Etisalat CEO Mohammed Omran: the number of users is less important than the revenue they generate.

Then there was the challenge of finding placement for that content on the operators' portals. Most telcos, says Escofet, are realising that the way they work with content and application creators needs to change, and that the application store model is the way forward.

"But operators are still reluctant to give up some of the other elements, such as pricing and communication with users, that they are used to tightly controlling. And they still insist on getting the biggest share of revenue," he says.

Over in Riyadh, Mobily chief executive Khalid Al Kaf numbers among the believers predicting a widget and apps-led rise in revenue. Saudi Arabia's burgeoning young population makes mobile internet a particularly important sector for Mobily.

Al Kaf points out that after years of talk, the fundamentals are finally in place to exploit the commercial potential of mobile internet services.

"Nobody was connected and we started talking about content aggregation, co-hosting and these things, good ideas, but there was no usage pattern," he says, drawing parallels to the development of text messaging, or SMS-based, services.

"We introduced voice services; after that we introduced the SMS; after the SMS we started introducing news alerts through SMS because of the number of users.

"So from peer-to-peer it went on to multipoint: now news broadcasts, content broadcasts and everything comes through SMS. I think the same story can be repeated," he continues.

"We learn from our history. The usage pattern is reaching that tipping point where we can create value out of it."

It won't be about one "killer application" hitting the market but about a flurry of services that will come and go, he adds.

"I think that there will be killer applications for a span of time, then they will die, and then other killer applications will come and then they will die.

"That rapid birth-death cycle will be there and it will depend on the user behaviour," he says.

"The challenge for traditional telcos will be how to culturally and mentally change our way of doing business. It is a completely different business model. If you want to continue that exponential growth over time you need to do that."

Still, with international giants like Apple, Nokia and Vodafone all scrambling to become the ultimate destination for new applications, doesn't that leave a local mobile carrier like Mobily with, well, a network of dumb pipes?

In addition to their existing billing relationships with customers, the fact that operators know where their customers are could allow them to offer location-based apps, Matthew Reed, a Dubai-based telecom analyst at Informa, points out.

Local operators are also likely to get involved in Arabic language content and applications, after the iPhone launched without any Arabic support.

"I'm pretty sure that's one area Mobily would be looking at," he says.

Adapting global applications to the local market by partnering with local media outlets and celebrities could be another growth area, Reed notes.

"The vogue for apps stores boils down to the fact that the success of the Apple store led other handset makers, like Blackberry and Nokia, to follow suit, and now operators are beginning to do the same," he says.

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