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Over-the-top (OTT) communications services have become popular in the Middle East and North Africa (MENA) because smartphone penetration is increasing and OTT players are extending their reach. This Viewpoint provides an overview of growth and strategies for OTT mobile communications services in MENA, and discusses operator approaches to the OTT challenge.



About this report

This report examines the growth of over-the-top (OTT) mobile communication services in the Middle East and North Africa (MENA) region, and discusses operator responses to the threat OTT services pose to traditional service revenue.

This report provides:

-analysis of drivers for the adoption of OTT services, and their impact on traditional voice and messaging services in the MENA region: we discuss how smartphones are driving take-up of OTT services, and how OTT players are extending the reach of their services
-a market outlook and forecast for traditional and next-generation voice and messaging services for the MENA region, including country-level data for Egypt, Saudi Arabia and the UAE (the forecasts cover OTT and operator-provided voice and messaging services)
-discussion of the various strategies that can be applied in response to competition from OTT players: we also provide case studies of the OTT strategies of three operators in the MENA region.
-For the complete data set, see the accompanying Excel file at www.analysysmason.com/OTT-MENA-2014.

Table Of Contents

The OTT communications in the Middle East and North Africa: market overview and best practice

Table of contents
About this report
Executive summary and recommendations
Executive summary: OTT communications are becoming pervasive in MENA - only 6% of handset messages will be sent via SMS by 2018
Executive summary: OTT services' impact on voice revenue will be limited in MENA, but new challenges (such as WhatsApp voice) are emerging
Recommendations for operators
The impact of OTT communication services
More than 80% of surveyed mobile Internet users in MENA use at least one non-operator service for social networking, voice calls or messaging
SMS usage and revenue are already declining in MENA, and mobile voice service usage continues to increase, but its revenue growth is limited
Market outlook
Smartphone adoption will drive penetration of OTT communications in MENA, and take-up of messaging will grow faster than voice services
OTT messaging forecast: Operator messaging services are more vulnerable than voice - the revenue outlook poses a challenge for ROI
OTT voice forecast: Operators will be the dominant force, but take-up of VoIP services on all devices will weaken their position
OTT communications outlook: Egypt
OTT communications outlook: Saudi Arabia
OTT communications outlook: UAE
Operator response strategies
Operators are responding to the OTT challenge with a variety of approaches
Blocking OTT services: This is largely counter-productive, but many regulators and operators are using or considering this approach
Stimulating usage: Operators can use pricing levers to limit the appeal of alternatives, but the window of opportunity is closing
Partnering with OTT players: Partnership models are increasingly common, but appeal most to operators with less to lose in legacy services
Partnering with OTT players: Nawras with WhatsApp - targeting the youth segment in Oman
Partnering with OTT players: Mobily with WhatsApp - market positioning as an innovator for differentiation in Saudi Arabia
Partnering with OTT players: inwi with WhatsApp and Facebook - extending access to OTT services to the mass market in Morocco
Launching IMS-based services: RCS is positioned as the industry's strategy to counter OTT messaging, but its traction is limited in MENA
Launching IMS-based services: Planned VoLTE deployments are limited in MENA, and are not yet core to operators' next-generation voice strategy
Launching 'telco OTT' services: MENA operators could launch their own services as a way to retain high-value subscribers
About the authors
About Analysys Mason
Research from Analysys Mason
Consulting from Analysys Mason


List of figures
Figure 1: Summary of report coverage
Figure 2: Usage of OTT communication services on mobile handsets, Egypt, Saudi Arabia and the UAE
Figure 3: Mobile messaging traffic by service type, Middle East and North Africa, 2010-2018
Figure 4: Mobile voice traffic by service type, Middle East and North Africa, 2010-2018
Figure 5: Penetration of OTT services on mobile phones, Egypt, Saudi Arabia and the UAE
Figure 6: Usage of OTT communication services on mobile handsets, Egypt, Saudi Arabia and the UAE
Figure 7: Year-on-year growth in SMS traffic, Bahrain, Morocco and the UAE, 2009-2013
Figure 8: Mobile outgoing minutes of use, by operator, Egypt and Morocco, 2008-2012
Figure 9: Smartphones as a percentage of handset connections, by country, Middle East and North Africa, 2011-2018
Figure 10: Smartphone penetration of OTT voice and messaging services, Middle East and North Africa, 2010-2018
Figure 11: Number of users of OTT messaging applications by device type, Middle East and North Africa, 2010-2018
Figure 12: Mobile messaging traffic by type, Middle East and North Africa, 2010-2018
Figure 13: Number of users of OTT VoIP applications by device type, Middle East and North Africa, 2010-2018
Figure 14: Mobile voice traffic by service type, Middle East and North Africa, 2010-2018
Figure 15: Mobile voice minutes by service type, Egypt, 2010-2018
Figure 16: Mobile messaging traffic by service type, Egypt, 2010-2018
Figure 17: Mobile voice minutes by service type, Saudi Arabia, 2010-2018
Figure 18: Mobile messaging traffic by service type, Saudi Arabia, 2010-2018
Figure 19: Mobile voice minutes by service type, UAE, 2010-2018
Figure 20: messaging traffic originated on mobile handsets, by type, UAE, 2010-2018
Figure 21: Operator responses to competition from OTT players in the communication services market
Figure 22: Regulator approaches to some popular OTT services in selected countries in the Middle East and North Africa
Figure 23: Examples of partnerships between operators and OTT service providers, Middle East and North Africa
Figure 24: Nawras's WhatsApp promotional material
Figure 25: Mobily's WhatsApp promotional material
Figure 26: Mobily's WhatsApp data plans
Figure 27: inwi's WhatsApp promotional material
Figure 28: inwi's WhatsApp+Facebook data plans
Figure 29: Operators' VoLTE service status in the Middle East and North Africa


The following companies are mentioned in this report:
inwi (Morocco)
Mobily (Saudi Arabia)
Nawras (Oman)


Data series in Excel annex
(The annex provides a range of major KPIs)


Users - Non-operator/OTT by service and device type
Voice traffic - Non-operator/OTT by service and device type
Voice traffic - Mobile operator

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