ARWP 4 th Annual Meeting on Private Sector Issues Infrastructure & Services Investment

1. ARWP 4th Annual Meeting on Private Sector Issues Infrastructure & Services Investment Tunis Meeting 1-2 December 2004

2. AGENDA • Introduction • Old Action Items • Infrastructure Connectivity between Arab Countries • Call Centre Business in Arab Countries • Voice Over IP Policies • Initiatives for increasing Arabic Content • Investment

3. Old Action points review: • Construct a web site for ITU-Arab private sector: • Mr. Atef advised that the site is already developed • He is to forward the web site to the groups in order to get their feedback. • Encourage business opportunities for Arab private sector communication companies: • We agreed that this could be achieved through gathering new tenders electronic information & publish it in the web site for ITU-Arab private sector. • The gathering of the tender’s information through a questionnaire to all Arab telecoms is to be coordinated by ITU.

4. Arab World Connectivity • The objective of this initiative is to insure the Arab countries infrastructure capability of having the Inter-Arab countries interconnect traffic for voice & data routed within the Arab countries infrastructure.

5. Arab World Connectivity Means of Connectivity • Satellite (Limited BW, Expensive, Transmission Delay) • Fiber Optic Submarine (No BW Constraint, Cost Effective, Global/Regional Connectivity) • Fiber Optic Terrestrial (No BW Constraint, Cost Effective, Limited Participants and Coverage) • Fiber Over Power Grid (Limited to SCADA use only, Study needed to explore other uses, Cost Effective)

6. Arab World Connectivity Fiber Optic (Submarine) [Source: ITU Arab Book 2004]

7. Arab World Connectivity Fiber Optic (Submarine) [Source: ITU Arab Book 2004]

8. Arab World Connectivity Fiber Optic (Terrestrial) [Source: ITU Arab Book 2004]

9. Arab World Connectivity

10. Arab World Connectivity SEA-ME_WE 2

11. Arab World Connectivity

12. Oman Connectivity • PLANNED CAPACITY • Omantel is in the process of acquiring capacity in the FALCON project of FLAG expected to be operational by the end of 2005. • It will provide an additional capacity of 16 STM- 1’s across the globe

13. Arab World Connectivity Recommendations: • Arab Region is underserved and needs additional capacity of fiber optic network • The total requirement of each member country be compiled (15 year projection) and conceptual/definitive plans developed • Expertise from ITU be sought • Source of funds needed for implementation be explored and arranged • Use of Fiber over the Power Grid be studied and feasibility prepared. [Source: ITU Arab Book 2004]

14. Call Center Business The need for Outsourcing: • As banking, information technology, and telecommunication businesses growing and competing to provide more innovative services in the middle east, their ability to cope with their diverse activities is reducing. • Outsourcing their non core activities to contact centers / BPO (Business Process Outsourcing) is a business opportunity for the region to achieve organizational efficiency and promote the Telecommunication and IT sectors.

15. Call Center Business Outsourcing benefits to Contact Center/BPO: • No capital investment for infrastructure required. • Expertise and experience with other clients in similar business lines. • Reduced human resource cost. • Flexibility to scale up and down business requirements. • Can easily exit from relationship if not satisfied and move to another. • Clear relationship with BPO based on quality and performance. • Customized solutions ensure data security and safety. • Improved productivity by focusing on core business.

16. Disadvantages of not Outsourcing • Build expertise from scratch by hiring or redeploying resources. • Lower competitive edge by have a higher unit costs. • High capital investment and human resource cost as payback usually from 3 to 5 years. • Unable to benefit from economies of scale. • Higher cost with lower quality. • If not satisfied with your in sourced service, difficult exit without incurring high costs.

17. Business Projections for AsiaContact Center Seats

18. Model for Arabian Regional countries to emulateBPO HR revenue forecast (Asia Pacific)

19. Leading Contact Centers/BPOs

20. Oman experience (Infoline) • A shared vision between Omantel and private sector to provide world class outsourced contact center solutions. • Omantel/PEIE/BCT partnership provides contact center solutions using Cisco Hosted IPCC technology. • Based in the Knowledge Oasis Muscat, Sultanate of Oman, with 300 seating capacity. • Provides state of the art technology with well trained bilingual, Arabic & English speaking, workforce

21. Oman experience (Infoline) • Gulf Air is the first customer. • Gulf Air started with 50 seating capacity handling their reservation calls from Oman only in year 2003. • Today they have 100 seat handling calls from GCC countries, India, UK, and Australia .

22. Summary • As the region is emerging more and more into the global economy associated with higher operating cost, it is time to benefit from the economy of scales to outsource non core activities by promoting initiatives of BPOs. • BPO activities therefore will further benefit communication and IT sectors.

23. Voice over IP

24. Global VOIP Market Development • USA: • The FCC has taken a competitive, market based approach to the Internet Services. • While the basic telephone services are regulated, data services are not regulated in the United States. • This has resulted in the phenomenal growth of Internet services including Voice over Internet (VoN). • The companies that offer data services do not pay any access charge to subsidize the local telephone companies. They also do not contribute to the universal service fund. • Also IP telephony provides alternate calling options in markets that otherwise do not have any competition. • European Union: • The Regulatory framework in the European Union aims to be technology neutral and does not distinguish between the different technologies that communications providers use to deliver their services. • In UK, The Regulatory Authority Office of Communications (Ofcom) has recently published its directives on VOIP. • The Communications Act establishes the new general authorization regime, which is a framework under which licenses are abolished and prior authorization or permission is not required from Ofcom before companies are able to provide electronic communications networks and services. • VoIP providers are required to conform to the General conditions of Entitlement specified by Ofcom.

25. Global VOIP Market Development • ITU: • ITU-T Study Group 2 is paying special attention to the Quality of Service (QOS) standards for VOIP and recommendations of the ITU are available on this subject. • Voice Quality and QOS are critical for the success of any VOIP service. • ITU had initially produced the H.323 series of recommendations which have been widely accepted in the field of IP Telephony. • ITU jointly with IETF has produced the H.248/Megaco protocol for controlling the media gateways that can pass voice, video, facsimile, and data traffic between PSTN and IP based networks. ITU-T Study Group 2 (SG2) is currently studying the options whereby users in IP address-based networks can be accessed from /to PSTN users.

26. Global VOIP Market Development Asian Market : • China VoIP was opened up in China in the year 2000 and has become the fastest growing service in China’s entire telecom industry, with some analysts forecasting it will capture up to 30% of China’s long-distance market shortly. A year after the VoIP experiment started, the authority designated VOIP as a normal service. • SINGAPORE: • In Singapore, VOIP was liberalized in the year 2000 and the VoIP market is growing very fast. The savings in the IDD rates for consumers are substantial. • 20% of all outgoing traffic in Singapore is VoIP compared to 1 to 2 percent in other countries. • Singtel v019 service is offered using IP Technology and allows very cheap calls to more than 240 international destinations. • The calls could be made from any phone line, Phone Net, ISDN and Mobile service. • INDIA: In India, the Telecom Regulatory body opened up Internet Telephony in the year 2002. As per this notification the scope of the service was for : • PC-to PC • PC to Phone • IP based H.323 /SIP Terminals employing addressing scheme of “IANA” Tariff: Toll quality voice - same as that of normal telephone service Below toll quality - lower.

27. Global VOIP Market Development ARAB/ GCC Countries: • At present, VoIP is not legal in most of the regional countries except in the case of Kuwait . • Regional countries are taking steps to gear themselves up to profit from the impending deregulation in Voice Over IP market. • It has not been very effective to control the illegal provisions by third party providers and therefore the incumbent telecom providers are preparing themselves to provide these services.

28. IP Telephony in Oman • Omantel was awarded a contract to implement IDC services at Knowledge Oasis Muscat (KOM) in September 2003. KOM is a Technology Park located in Muscat. IP telephony is one of many services being offered at KOM. • IP telephony project at KOM was a success story for Omantel. It incorporated most of PSTN functionality including extension Mobility. • One of the major customers (Gulf Air) at KOM Call Center has all of its ticket reservations made on VOIP. • The traffic for the Gulf Air comes to Oman from major countries such as UK, Singapore and Bahrain.

29. VOIP- Technology, Opportunity, Challenge • Technology: Flexibility in services • Opportunity: Combining voice and data on the same network, VoIP and other cost-cutting measures can help give the Arab region a competitive advantage in providing services at a reasonable cost. • Challenge: Regulations

30. Recommendations Various researchers show: • Significant Growth of VOIP in Europe, Middle East and Africa (EMEA). • Wholesale VOIP traffic exceeding 50 Billion minutes by 2009. • The retail Voice traffic in excess of 1,550 billion minutes.

31. Recommendation • In light of market potential, a recommendation can be made for the creation of an independent focused group in the Arab region to study and leverage upon technologies such as VOIP. • It is recommended that the group work with a consultant and an ITU Study Group to look at the technology, market opportunities, regulatory issues and governmental concerns.

32. Initiatives for increasing Arabic Content

33. Arabic Initiatives for increasing Arabic Content • ITU Arab Region Internet & Telecom Summit (OMAN) held in 2001, the need for increased usage and training was stressed for promotion of Arabic Content. • Expert Group Meeting on Promotion of Digital Arabic content (DAC) was hosted at Beirut during 2003, under auspices of World Summit on Information Society (WSIS) endorsed by UN and organized by ITU • Within the above framework, The World Summit Award (WSA) initiated to help move towards a common global vision on the Information Society.  • Number of Regional content providers tied up with Mobile/Internet Service Providers to deliver Arabic content.

34. Telecom Services For Delivery of Content • Internet / Broadband Technologies: • e-learning, e-government, e-health, e-business, e-entertainment • In the long term, planning for streaming videos using Set top Box Telephone Services: IVR Audiotext Service • Mobile Services: • Widespread launch of GPRS and MMS and more recently 3G • Speed of introduction of Arabic content help adoption of MMS • ARABIC offerings: • News, Jokes, Sports, Entertainment using SMS Content • SMS Infotainment Service to deliver Arabic Content • WAP Push Magazine • Mobile Portal

35. Strategies for Content Provision Content Provision Value Chain& Positions application provider can adopt Content Provider Application Developer Aggregator Application Provider Portal Operators Develops application/ content Aggregates Application & Content for Portals Branding Aggregates Content From many Providers Developer and Originator Extensive Listener Brand Leader Knowledge of end-user brand Brand borrower Sub Contractor Limited End user Brand

36. Regional Content Provider Offerings Internet content Delivery: Mostly based on news/media/entertainment (Albawa,Planet Arabia,AME Info etc.) IVR Call Group, Media Phone are providing Audio Text content Mobile Content: • Info2Cell: Arabic Content from MMS Breaking News, MMS Greetings Cards, MMS Horoscopes etc to all regional Providers • Ducont: Based in Dubai, Delivers SMS based content such as breaking news, weather, infotainment.

37. Internet as a medium for Content Delivery • Several Arabic Web Portals are now serving the needs of Internet. • Omantel offers all support for creation of Web sites including Web Hosting. • New broadband technologies for delivery using DSL technologies and Set top boxes are evolving.

38. Investment • The objective of this initiative is to encourage investment within the Arabic countries through strategic alliances. • Encourage Arabic Consortiums in bedding for new licenses • Encourage strategic alliances between Arab Operators. • Encourage use low cost model operation for the telecom sector. • MobiNil as a case for the application of the low vost model.

39. Steps to increase digital content on Arab Internet sites • Legislation and execution of laws on protection of intellectual rights required. • Technological Incubators to be formed for content-making companies. • Digitalization of National Libraries universities, state institutions required. • Internet Applications to be Arabized. • Arab University students should have access to academic studies on the Internet.

40. Mobile Content Delivery • Mobile phone as a popular tool for receiving content owing to its portability and anytime features. • SMS is probably the most popular form of Content delivery for Mobile terminals. • New Generation handsets/PDAs complimenting the growth of Content delivery. • Omantel introduced a Mobile Internet Portal to tap the vast potential of Mobile internet access using GPRS.

41. Different Applications for delivery using Mobile data services Key considerations for delivery of content using mobile data services Note: Market segmentation and categorization of applications is vital for effective business development Person to Machine Person To Person Applications Machine to Machine Examples: P2P- Text,Photo Messaging P2M- Pull services IVR, Voting, Competition M2P-Wireless Marketing M2M- Cashless Payments Machine to person

42. Vision for Future • Telecom Companies to work in partnership with regional Content providers (for example on revenue sharing basis) for delivery of Arabic Content. • Plan to deliver advanced services (such as streaming video on demand as and when technology matures). • Regulation of Content must be brought under uniform Arab/Regional policies.