|Issue:||Africa and the Middle East 2015|
|Topic:||The Mobile Internet in MEA and the role of Web and video optimization|
|Title:||Senior Director, Product Marketing|
|Organisation:||Citrix Systems, Inc|
Mark Davis, Senior Director of Product Marketing, Service Provider Platforms, Citrix
Mark Davis is the Sr. Director of Product Marketing for the ByteMobile BU within the Citrix Delivery Networks business, where he leads worldwide marketing and product marketing of ByteMobile traffic management, analytics and application delivery products to communications service providers. Mr. Davis has twenty years of wireless and telecommunications industry experience ranging from start-ups to AT&T and Lucent Technologies. He earned a B.S. in Aerospace Engineering and an MBA, both from the University of Virginia.
Across the MEA region the infrastructure required for fixed broadband is either under-developed or non-existent. In these circumstances, many governments are making the informed decision to pass over fixed line as a development priority, recognizing that it would be too complex, too expensive and take too long to deliver results. Instead they are choosing to go directly to mobile technology for the delivery of Internet services. This makes economic sense. Instead of spending years laying cables, often through geographically and politically hostile terrain, building the infrastructure for mobile Internet is far more cost effective.
This year we will see 43 percent of the worldwide population being regular Internet users and of this number, 31 percent will go online via mobile phone, according to eMarketer. With the growing mobile Internet user-base driving overall Internet adoption, the future of the Internet is clearly mobile. This is especially true in emerging markets.
Most governments agree that the Internet is an important facilitator of economic growth. For a country to be competitive, its people and businesses need to have Internet access, preferably broadband access. This is nowhere more true than in the emerging markets of the Middle East and Africa (MEA). In a region that spans Senegal to Iran, Turkey and South Africa, the challenges faced by communications service providers (CSPs) are as diverse as the geographical and political areas they cover with their networks. MEA features extremes of wealth in the Gulf States and Saudi Arabia and equally extreme poverty in many African countries. Hand-in-hand with these economic extremes come extremes of Internet connectivity. According to Statista, the Arab States reached a 36 percent Internet penetration rate in 2015 while Africa rose to only 26 percent.
Trans-MEA operators know better than anyone how diverse the region’s mobile Internet marketplace is and the challenges involved in providing mobile subscribers not only with Internet access but also with a quality of experience (QoE) that actually makes that access worthwhile. This is crucial: coverage without quality of experience condemns mobile operators to commodity status. But coverage itself does not guarantee a good video experience, as videos can and will stall even on the most sophisticated networks. A stalled video is the most frustrating experience for a subscriber who expects to be able to access high-speed video content. More than any single network-related factor, a consistent video experience regardless of location, time and video duration is what defines a subscriber’s experience with an operator.
The lay of the land
Across the MEA region the infrastructure required for fixed broadband is either under-developed or non-existent. In these circumstances, many governments are making the informed decision to pass over fixed line as a development priority, recognizing that it would be too complex, too expensive and take too long to deliver results. Instead they are choosing to go directly to mobile technology for the delivery of Internet services, which makes economic sense.
In parts of the Middle East, particularly Bahrain, Qatar and UAE, Internet penetration stands at around 90 percent (source: Internet World Stats). Most mobile customers have two or even three phones, which doesn’t seem extravagant when you realize that most households don’t have a fixed landline. Countries such as Saudi Arabia and Qatar are even testing ‘4.5G’ services as they anticipate a significant increase in traffic growth due to growing video consumption, increasing video resolution, bigger screens and multiple devices per subscriber.
At the other end of the scale, Internet connectivity in parts of the Middle East and Africa is severely limited by great distances, weak economies and political uncertainty. In Africa particularly, fixed-line terrestrial infrastructure is often non-existent and the traditional measures of Internet usage such as number of ISP subscriptions, overall number of hosts, IXP-traffic and overall available bandwidth all indicate that most of Africa is on the wrong side of the so-called digital divide.
The good news is that although the telecommunications market in Africa and parts of the Middle East is still in its early stages of development, it is also one of the fastest-growing in the world for mobile services. According to a 2014 GSMA report on The Mobile Economy, sub-Saharan Africa (SSA) is set to be the fastest growing region for the next four years and the region’s mobile data traffic is forecast to increase twenty-fold from 2013 to 2019, about twice the global growth rate. Although mobile is growing rapidly and is more widespread than fixed line, there is still a long way to go. 3G connections accounted for only 15 percent of the total base at the end of 2013 but this figure is forecast to rise to more than half of mobile connections by 2020.
If predictions are correct, SSA will then be the second largest region for 3G connections, following Asia-Pacific. According to the GSMA, the increasing proportion of 3G connections largely reflects the accelerating rate of smartphone adoption. SSA is forecast to see the highest growth of any region in terms of the number of smartphone connections over the next six years–but this is mainly in countries north of the Sahara and in South Africa. It is predicted that there will be 525 million smartphone connections across these regions by 2020.
The role of optimization
Many of the mobile operators in the Middle East and Africa are groups that stretch across the MEA region and so have experience addressing the challenges of delivering services to such a diverse landscape. In some areas they are only just deploying 3G while the same groups with operations in North Africa, for example, are leapfrogging 3G and going straight to 4G in those markets.
Mobile web and video optimization enhances the quality of experience for the mobile subscriber through content optimization, video caching, policy control and traffic management. In MEA, a capable optimization solution will be able to adapt to the broad spectrum of requirements starting with the simple task of helping operators get as much capacity as possible out of their existing infrastructure. This is a basic requirement because many of these networks are oversubscribed even as the operator is trying to improve the customer experience. The challenge in some parts of the region is to eke out as much as possible from the legacy infrastructure while in others it is trying to provide operators with the ability to deliver HD video and manage the load put on networks by the customers able to buy all the latest large-screen gadgets. Even in countries with antiquated infrastructure, a small percentage of the population can now afford to buy the latest iPhone. A huge and perhaps unexpected pain point for operators in the MEA region is that they are seeing their subscribers jump from feature phone to smartphone. Though the increase in data ARPU that comes with that jump is desirable, the incremental effect on available network capacity is far greater than is seen in countries where people are simply upgrading their iPhone 5 to an iPhone 6. With the sudden increase in data consumption driven by smartphone adoption inevitably comes video stalling. Optimization addresses this problem.
Beyond addressing the problem of growing data traffic and less-than-ideal experience, CSPs are looking for detailed reporting that can show exactly the improvements optimization techniques are having on video and web performance, and the positive impact on subscriber experience. The key areas for customer satisfaction are reducing instances of video stalling and improving web page download time. Another crucial area is encrypted data traffic. Since YouTube – the biggest mobile video content source globally – started to encrypt its traffic, operators have tasked their optimization vendor partners to detect and characterize that traffic, then improve the subscriber experience just as they have for unencrypted content.
A bit of insight
The mobile Internet in the MEA region is enabled by a diverse set of operators, many of which are confronting the challenge of winning new customers while managing the heavy load that video consumption is putting on their legacy networks. For many, voice is the familiar paradigm and they find themselves facing a hyper-competitive and swiftly changing mobile data market. They’re learning as they go, developing new offers and innovating around new partnerships and services, trying to claim at least a small piece of that revenue that’s otherwise going to the OTT providers.
Mobile optimization is a crucial piece of the puzzle for mobile operators in the region. For some, it’s helping them extend the life of existing infrastructure, gaining headroom in the network so they can push more data across it. This buys them time when it comes to upgrading that infrastructure. For example, getting the most out of 2G means they may be able to bypass 3G entirely and can invest everything in 4G. For others, video experience is proving to be the best way to differentiate against competitors and they are defining themselves by their ability to deliver the most consistent video playback experience.
When building a mobile Internet service in a challenging environment, providing access should be as much about delivering that great experience as it is about coverage. Network capacity, be it provided by 2G, 3G or LTE, invariably becomes a scarce resource so it’s imperative for operators to make use of every tool at their disposal to ensure the best possible experience for their ever more demanding customers.