The growth of value added services is an area that operators in the MEA region are trying to pay more attention to as they attempt to differentiate offerings. Igor Novikov, chief marketing officer of Russian telecoms IT and VAS supplier Bercut talks through his company's growing interest in the region.
Bercut has a series of IT and VAS products targeted at telecoms operators. Which ones are showing the greatest potential and uptake in the MEA region?
Indeed we focus our activities on the development of various VAS products for telecoms operators, but we attribute much of our business potential to our flagship product, i-Cell.
Today VAS has become the main advantage of an operator in the face of more determined competition from rivals, and i-Cell may become that very tool, which will give the powerful incentive to the development of VAS.
i-Cell is a product for creation, delivery and promotion of interactive services. It is the latest cell broadcast technology that allows a subscriber to obtain supplementary information or download premium content by sending an interactive request at the touch of a single handset button. I would say that i-Cell is unique compared to other types of mobile communications because it enables the operator to flexibly tune the broadcast area and time as preferred.
We believe that i-Cell has a great potential not only in the Middle East and North Africa but also in other international markets.
When did Bercut embark on its international expansion, and why is the MEA is a good market to develop?
Bercut's international expansion started with the opening of its subsidiary company in Johannesburg, Bercut South Africa. This allowed us to act on the MEA market locally and, therefore, provide more effective customer service.
The Middle East and North African markets are very attractive for Bercut, and open up new possibilities for our products as the demand for value added services from consumers in the region is very high.
The mobile telecoms market in the region has been changing rapidly for the last few years and has now transformed from an emerging market region to one of the most developed in the world. The subscriber growth remains high and the region is beginning to demonstrate the characteristics of a mature market.
It is quite clear that as the markets reach saturation point, operators will have to turn from customer acquisition to retention and become more proactive in bringing new services to market. Apart from that the region is becoming more liberalised, which also leads to more pressure on the operators to offer innovative serivces in order to retain customers.
You already have an office in Johannesburg, are there any plans to register an operation in the Middle East region?
Yes, we have plans to expand our presence in the Middle East in the future. This will allow us to market products domestically and provide better technical support and service guarantees to our customers. Apart from that, it will help overcome the difficulties related to cultural differences and localisation of services.
What is your impression of MEA operators' understanding of the potential of VAS, and their efforts to introduce such services?
The market is developing rapidly, and today all operators understand that simple mass market services can no longer ensure stable income for a long time. As a result, the interest in VAS is increasing. According to leading mobile operators that attended 3GSM World Congress 2007 in Barcelona, VAS has been successfully generating revenue for the last few years, particularly mobile advertising related services, including the offer of information about sports and entertainment events. I would say that it is quite clear that the share of VAS will show significant growth in the coming years and these services will be introduced by operators more intensively.
How challenging has it been for a company from Russia to gain traction in the MEA region?
Indubitably it is challenging for us because provisioning for any new market often proves to be the most complex area and this requires interaction with new network participants and operators for each country. However we are confident that the company has enough skills and tools to comply with new market realities. We have entered the MEA market with its great potential and have strong intentions to expand our activity.