Monday, June 22, 2009

Some notes from Egypt (ICEX trip)

I have the opportunity to be one of the companies participating on the commercial mission with ICEX (Spanish Foreign Commerce Institute) to Egypt dedicated to the mobile sector (aka the Spanish government helping Spanish companies in the mobile services sector to export their product and services to other countries, in this case Egypt)
As part of our efforts in the Middle East and Africa we have not had the chance yet to focus much on the Egyptian market, even though we have discussed with some of the MNOs we have relationships at Group level about their Egyptian subsidiaries / OpCo. Also as we have been developing the possibilities of advergaming and mobile advertising in different growth / emerging markets, Egypt was one to focus because of its size and mobile orientation (aka where many customers will discover the web through their mobiles and not through fixed broadband)
It is important to note and something that it did surprise me today was the not only the penetration level is still low (or being more precise leaving ample room for growth), as it is around 50% but also the population of Egypt being the same as Turkey in 2009 (around 80 million) will be up to 130 Mio in 2030 (while Turkey will be “just” around 105 Mio on the same year). Thus there may be still more than 50 Mio new users of mobile in the coming 20 years. Yes the ARPU levels are low and even if the country is showing big growth rates (4% this year under the world crisis), the country needs constant hypergrowth (7% or above) just to equal its population growth and maintain the current GDP.

Having meet some of the mobile operators, marketing agencies, SMS connectivity providers and VAS players, the country does offer for mmCHANNEL an opportunity. Mobile marketing and mobile advertising will be big and sooner than many expect (and faster at least on a comparison basis than Western Europe or the US). Static content –music, games, images- will still be a large revenue generator also

Obviously as in other markets the question for us will be to either handle direct relationships with one mobile operator and build a small but vibrant local presence or reach an agreement with a local company to do represent us here. I tend to believe that we would prefer the first scenario and keep building our Middle East presence together with other commercial ventures but we need to be open to all scenarios as we will keep evaluating the market and our commercial development in the coming months/quarters

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