|Issue:||Africa and the Middle East 2008|
|Topic:||Mobile communications – a turning point for the Middle East and Africa|
Lorcan Burke the CEO and co-founder of Adaptive Mobile Security is a 20 year veteran of telecoms. Prior to AdaptiveMobile, Mr Burke worked with the ETF venture capital group and advised companies such as Nomura Private Equity regarding investments in wireless, security and communications. Mr Burke also served as Ericsson’s CTO for the Vodafone account and as CTO of FirstMark Communications. He started his career with Nortel working in Europe and Asia in support, development, system integration, product management and general management.
Mobile penetration exceeds fixed line penetration in the Middle East and Africa by five to one. Internet access – relatively few in the region have PCs, and SMS messaging have contributed to the popularity of mobile communications. The average age of users is dropping and harassment, bullying, inappropriate content and pornography are increasingly sent to young users’ mobile phones. Operators with in-depth security solutions, not only for businesses, but for concerned families as well, can provide operators with a significant competitive advantage.
The mobile communications landscape The telecommunications landscape in the Middle East and Africa has undergone a dramatic change in the last few years. Similar to the West, where the telecommunications sector was once predominantly state-controlled, these are now reasonably liberalised markets where competition is now intense as regional and international operators vie to gain access. Licence fee offerings are unprecedented, given the hope of recouping their investment from the potential revenue-generating applications looming large on the horizon. For example, in Jordan, the Middle East’s most deregulated market, there are three operators – Zain, Orange and Umniah – fighting for their share in a country of just over six million people. These markets are currently experiencing tremendous growth in the mobile communications sector. Since they can leapfrog legacy technologies, the adoption of next generation mobile broadband technologies has been much higher in the Middle East and Africa than in the West. In fact, mobile penetration far exceeds fixed line penetration. As a result, the majority of people in these regions have not had the ‘personal computer’ experience and are only familiar with the Internet on their mobiles. According to the International Telecommunications Union (ITU), in 2007, mobile phones in Africa outnumbered fixed lines by five to one. This ratio is even higher in Sub-Saharan Africa, where nine out of ten subscribers use a mobile. With growth averaging 50 per cent per year since 2000, Africa’s mobile market is the fastest growing in the world. Analysys, the UK-based research and consulting firm, estimates that revenues in the Middle East mobile sector will grow at a rate of ten per cent per annum over the next five years and will reach almost US$40 billion by the end of 2012. Social and business drivers The adoption of mobile services has been high in both the consumer and business sectors, with the key motivator being social standing. As with any developing market, brand association is hugely important for users. As the mobile phone is a personal device, it is unsurprisingly believed to reflect an individual’s position in society. This sentiment is no doubt being capitalised on by technology providers and handset manufacturers alike. SMS messaging has also contributed to the popularity of mobile communications. The growth of SMS has been phenomenal, even when compared to Europe. Today, teenage boys and girls are routinely texting, despite the common perception that these regions are traditional and conservative. Unlike the awareness of security threats associated with the traditional computer networks, there seems to be a complete lack of suspicion or mistrust when it comes to a mobile network. This demonstrates a major shift in thinking for the region. This region is also riding the ‘Web 2.0’ wave – social networking sites such as Facebook and MySpace are gaining popularity, with businesses looking at ways to benefit from it in the form of increased productivity. They are already adopting tools such as unified communications that allow employees to stay connected anytime and from anywhere. However, the true success of mobile communications will depend on a number of issues including the security of mobile networks and, critically, revenue-generating applications. The mobile threat Mobile network operators are faced with the challenge of optimising their network assets; they need to find new revenue-generating streams as they cannot remain profitable on voice revenues alone. The network will soon be a mere utility that offers no added value. A holistic and comprehensive approach to network security will be critical to meet this challenge. There is more to mobile network security than meets the eye. To illustrate, look at mobile security content control. Today, 80 per cent of users worldwide are affected by mobile spam and almost 2 per cent of mobile traffic is spam. On average, individual operators cleanse 55,000 viruses a day. This volume of spam affects users both on personal and professional levels. On the personal level, child protection is a major issue in the region. As the usage of mobiles amongst teenagers increases, and the average age when children get their first mobile device decreases, one in three of 11-16 year olds today are victims of harassment and bullying. Inappropriate content is also sent to their mobile phones. Indeed, according to a Middle East study, 70 per cent of children receive pornography on their mobiles. This is a real, serious, issue for most people in the region. Mobile security enabling revenue streams The good news is that it is within the powers of mobile operators to successfully combat this problem. Further, it is also their responsibility and in their business interest to enable parents to protect their children from inappropriate content and threatening messages. By doing so, operators will reduce customer churn, increase their subscriber base and strengthen revenues. Parental control technologies are gaining importance amongst operators in the region. Cultural attitudes and family values, especially in the Middle East, have been key drivers for this proactive approach. These solutions provide in-depth and granular levels of monitoring that goes beyond simple threat and application blocking to perform instant and automated policy lookup, filtering content and application access according to settings provided by parents. With such solutions, parents can vary access levels for different members of their family, allowing some mobile Internet access for teenagers, but blocking all access for younger children. A similar argument applies for businesses. With the ever-increasing use of smart-phone devices, operators can drive mobile data traffic over their networks, if they can assure businesses that their enterprise customers’ employees can be protected from harassment and inappropriate content, especially since company directors are often legally liable for the protection of their staff. Mobile viruses are becoming a real-life problem, as opposed to an anticipated one. Handsets exchange data via Bluetooth, PC sync and wireless local area network (WLAN) – all outside the control of operators – and are increasingly becoming infected. This has serious implications for subscribers. An infection by a mobile virus can result in unauthorised SMSs and calls, loss of credit and of private data and photos stored on handsets. Reputations can be destroyed by pornographic or offensive messages sent by viruses in the name of the handset owner or even the operator. Today there are over 500 viruses specifically for mobile devices; Commwarrior is the most prevalent mobile virus. Recently, Arifat, a ‘Trojan’ virus that attacks phones using the Symbian operating system, wreaked havoc in the Middle East and Africa, by stealing login credentials and sending them back to the attacker via SMS. This allowed the attacker to remotely control certain functions on the affected mobile devices. Another rogue application is the Guardian client application, which spread like a virus in the Middle East. When handsets were turned on it was sending up to 100 SMS messages a minute to a non-existent number, or even changing the SIMs of devices. If left unchecked, such incidences can significantly hamper the further development and adoption of mobile technology in the region. The mobile phone, legendary for its ubiquity, provides one of the most powerful consumer-to-brand experiences in Middle East and Africa. Operators have a big opportunity to make mobile advertising mainstream, thereby increasing network traffic, revenues and consumer loyalty. According to Informa Telecoms & Media, the market for advertising on mobile phones will be worth more than US$11 billion annually by 2011. It is promising, but there are still challenges to overcome before mobile advertising can become a successful marketing medium in the Middle East and Africa. The challenges include government regulations on marketing to the underaged, marketing to individuals without their consent, and the absence of tailored advertising campaigns. The operators’ own actions will be key in making or breaking this revenue stream. Using technology, operators can gather user insight into content preference, user mobile behaviour, subscriber sensitivities, consumer segmentation, user permissions for opt-ins or opt-outs, and URL screening – all making mobile advertising a truly personalised and value-added service for their subscriber-base. It is no exaggeration to say that mobile communications is pushing the boundaries of economic and social development in the Middle East and Africa, but due to the region’s high levels of disposable income, high penetration rates, brand consciousness and attraction to new technologies it is also placing the region at the forefront of mobile growth globally. The role of operators there will be critical in the industry’s future development as the mobile platform is the foundation on which all future communications technologies will sit. The opportunity is definitely there for the taking – not just for the mobile communications technology and service providers, but for the region too. With the current political and business climate the region can cherry-pick its technology from a wide variety of suppliers and on its own terms. Certainly an enviable position to be in!