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Copyright 2007 IDC. Reproduction is forbidden unless authorized. All rights reserved.
Dynamics of VoIP Services in Middle East and North Africa
Regional Seminar on Internet Protocol: VoIPITU Arab Regional Office, Algiers, Algeria19-20 March 2007
Said Irfan, Senior Analyst, Services, Communications Group, MEA, IDC MEA
04/10/23 2© 2007 IDC
AgendaAgenda
IDC Definition
General Regulatory and Market Trends
VoIP Development in MENA
Way Forward: Telecoms of the Future
Essential Guidance
04/10/23 3© 2007 IDC
IDC Definition of VoIP ServicesIDC Definition of VoIP Services
Based on and carried over an Internet protocol (IP) network.
Voice traffic sent over a public managed IP network or the Internet
Designed to complement or compete with public switched telephone network (PSTN) traffic.
Can be operated by a service provider such as a next-generation telco, a public telephony operator (PTO), or an Internet service provider (ISP).
04/10/23 4© 2007 IDC
AgendaAgenda
IDC Definition
General Regulatory and Market Trends
VoIP Development in MENA
Way Forward: Telecoms of the Future
Essential Guidance
04/10/23 5© 2007 IDC
Key Drivers of Telecom MarketsSummary of Service TrendsKey Drivers of Telecom MarketsSummary of Service Trends
Monopoly Competition
Narrowband Broadband
TraditionalNetworks
Next Gen.Networks
TelecomsTelecoms/IT
Convergence
Wireline Mobile Convergence
Voice Data Triple Play +
+
+
Qu
ad
rup
le P
lay
– “
Tri
ple
P
lay
on
th
e M
ov
e”
New
Opportunities in IP
04/10/23 6© 2007 IDC
Competitive Landscape in MENA - 2007 Competitive Landscape in MENA - 2007
Semi-competitive CompetitiveMonopoly
Data Services
Leased Circuits
National Trans-mission ServicesBroadband
Cross-Ownership
Mobile Services
Internet Access Services
Telephony Services
Cross-Ownership Cross-Ownership Cross-Ownership Cross-Ownership
2007
2007
Cross-Ownership Cross-Ownership
2007
Cross-Ownership
Int’l Transmission Services
Data/ Internet Only
2007
Competition and Liberalization taking hold in MENA
Competition and Liberalization taking hold in MENA
Bahrain
Saudi Arabia
Kuwait
UAE
Egypt
Jordan
Morocco
Oman
Algeria
2007
2007Qatar
2007
04/10/23 7© 2007 IDC
Regulations enabling VoIP in MENARegulations enabling VoIP in MENA
Algeria VoIP allowed since 2004 (ISPs: EEPAD’s Assilabox, SLC)
Egypt National VoIP licenses for Enterprise Intra-WAN awarded to NSP
Class A’s Bahrain
National Fixed Services License (NFL). Tech Neutral allows VoIP (e.g. Batelco, Etisalcom, Lightspeed etc )
International Telecommunications Services License (ISL) (e.g. Batelco, Etisalcom, Lightspeed etc) Tech Neutral Allows VoIP.
UAE Full Service licensees Etisalat & du. No other licenses expected until
2015. Possible announcement on VoIP by TRA in 2007/2008.KSA
New facilities based fixed telephony licensee expected to be issued in 2007, and start operations in 2008. Regulations on VoIP expected to be clarified on operation launch.
Jordan Jordan Telecom launched LiveBox in August 2005
04/10/23 8© 2007 IDC
AgendaAgenda
IDC Definition
General Regulatory and Market Trends
VoIP Development in MENA
Way Forward: Telecoms of the Future
Essential Guidance
04/10/23 9© 2007 IDC
Incumbent’s Dilemma – Wireline DeclineDriver for new converged platforms and servicesIncumbent’s Dilemma – Wireline DeclineDriver for new converged platforms and services
Global Wireline & Wireless Services Spending ($Bn)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2002
2003
2004
2005
2006
2007
2008
($B
n)
Wireline Wireless
MENA Wireline & Wireless Services Spending ($Bn)
$0
$5$10
$15
$20$25
$30
$35$40
$45
2002 2003 2004 2005 2006 2007 2008($
Bn
)
Wireline Wireless
GCC Wireline & Wireless Services Spending ($Bn)
$0
$2
$4
$6
$8$10
$12
$14
$16
$18
2002 2003 2004 2005 2006 2007 2008
($B
n)
Wireline Wireless
Weakness in telephony
Voice goes mobile
Data and Internet services picking up in Wireline market, but not mitigating PSTN revenue decline
Fixed-Mobile Substitution Effect
Mu
lti-mo
de D
evices
2004 2006 2010
Fixed-MobileConvergence
Wireless
Wireline
Convenience of one
Lower Costs
One provider
One bill
One address book
One handset
One mailbox (UMS)
One number?
All IP Networks
Standard-based, IMS, SIP
Mobile over WiFi
The BT Bluephone project is considered the trailblazer of convergence today.
The project was announced in mid-2004 and is still a showcase of FMC with a commercial launch due early in 2005.
Source:/Notes: IDC, 2006
Driver for IP services !
04/10/23 10© 2007 IDC
The hype has been consumer VoIPBroadband & the ‘Skype’ EffectThe hype has been consumer VoIPBroadband & the ‘Skype’ Effect
Representative
ME CountryActual Data
0
200
400
600
in t
ho
us
an
ds
Bahrain Kuwait Oman Qatar KSA UAE
56% C
AGR
Narrowband to Broadband Drives VoIP Usage
Intl VoIP Usage vs BB Adoption
0%
25%
50%
75%
100%
No InternetHousehold
Dial OnlyHousehold
BroadbandHousehold
Currently Intl VoIP Users Planning to use Intl VoIP
Interested in Intl VoIP No Plan to use Intl VoIP
Source:/Notes: IDC, 2005
04/10/23 11© 2007 IDC
And consumer “Triple Play”e.g. iTunes, WoW, TIVO, “Sahm”And consumer “Triple Play”e.g. iTunes, WoW, TIVO, “Sahm”
Service bundling: Voice, Video/TV, data/Internet
VAS drives adoption: VoD, gaming on demand, UMS
Operators launching/trialing/studying: Etisalat, Qtel, Lightspeed, Telecom Egypt, Jordan Telecom, Algeria Telecom, IAM, etc
Representative
ME CountryActual DataTriple Play Interest vs BB Adoption
0%
25%
50%
75%
100%
No Plansfor BB HHs
Interestedin BB HHs
PlannedBB HHs
Current BBHHs
Not interestedInterested, but depends on bundle priceInterested
Source:/Notes: IDC, 2006
04/10/23 12© 2007 IDC
VoIP growing in the Enterprise Current Installations vs. intended future investmentsVoIP growing in the Enterprise Current Installations vs. intended future investments
Yes
No
Don't knowN=272
Ba
se=
No
t curre
ntly in
stalle
d in
bo
th H
Q &
Bra
nch
office
s0 50 100
HostedVOIP
Services
TraditionalCentrex
IP PBX
TraditionalPBX
0 50 100
Traditional Centrex(n=142)
Traditional PBX (n=228)
Hosted VOIP Services(n=97)
IP PBX (n=258)
Installed & Using Likely to install over 12 months
Source:/Notes: IDC 2005 IP Telephony Survey
04/10/23 13© 2007 IDC
Top 3 Reasons Enterprise using IP VoiceTop 3 Reasons Enterprise using IP Voice
0 20 40 60 80
Using one telephone system for severaloffices
Saving money on long distance charges
Strategic voice data applications
Ability to use one wiring system, not two
Costs about the same as trad PBX
Costs less than a traditional PBX tooperate
Costs less than traditional PBX hardware
Other
N=216
Today the focus is on cost savings
Custom Apps will drive this market for
the next 5 years
Q: What are the three most important reasons your companyhas installed or is planning to install an IP PBX?
No
wF
utu
re
Source:/Notes: IDC 2005 IP Telephony Survey
04/10/23 14© 2007 IDC
Spending on VoIP 2005-2010Spending on VoIP 2005-2010
Representative
ME Country
Expected Competition in the market
Substantial expatriate population
Very fast broadband adoption
NGN deployment
Expected Bundle of VoBB with other services
VoBB as secondary line to TDM (tied in with ADSL subscription)
2005
VoBB0.1%
TDM99.9%
2010
VoBB14.8%
TDM85.2%
Source:/Notes: IDC, 2007
Voice Telephony Spending (US$million)
04/10/23 15© 2007 IDC
AgendaAgenda
IDC Definition
General Regulatory and Market Trends
VoIP Development in MENA
Way Forward: Telecoms of the Future
Essential Guidance
04/10/23 16© 2007 IDC
Silos of communicationsSilos of communications
Enterprise Voice
NetworkVoice
Mobile telephony & messaging
Web/Email
Messaging
Data Network
Video Video Network
Public Switched Telephone Network
Cellular Network
04/10/23 17© 2007 IDC
By converging silos onto a common network transport protocol new opportunities arise…By converging silos onto a common network transport protocol new opportunities arise…
Voice
Choice of User interfaceIP Network
Combined Voice, Video, DataIP
Mobile telephony
Video
Messaging
Web/Email
04/10/23 18© 2007 IDC
Essential GuidanceEssential Guidance
VoIP is here to stay
Develop competencies outside core services…and/or start building partnerships
Enact regulations that balance service innovation and market development
Opportunities abound for networks beyond transport and access, i.e. Enterprise Network Upgrades
