Category Archives: Strategy

SME Targeting in Oman: MNO’s Are Shooting Themselves In The Foot!

Telco MNO’s are currently focusing more & more on enterprise services since consumer revenue is decreasing drastically over the past 5 years. In order to maximize their profit, they are tapping into a segment that has always been considered a mass market segment & targeted by consumer offering: the SME’s. SME’s have been using the consumer offerings to save money & benefit from the features available. They need voice, data, & sometimes fixed voice & data.

In a drill to help a friend with the best package in Oman, I was checking the SME offerings versus the consumer ones. It turns out that MNO’s in Oman are offering much more to the consumer rather than the enterprise. With packages in the consumer segment loaded with national minutes, data, & international minutes, it was still cheaper as a whole package to the customer rather than taking one of the SME packages (around 30% more with around 80% less minutes & data). This has raised a very serious question: how are the MNO’s targeting these SME’s and luring them to sell them more services?

If the MNO’s do not have or compile their database of SME’s, how can they be able to target them later rather than treating them as consumers? If the SME package costs 30% more than the consumer packages compiled for 5 – 15 employees, even more in some cases, how will they be able to target & segment such SME’s?! In more developed countries, SME or enterprise packages are about 10% less in price and loaded with much more features. The rationale behind that is luring the customer with voice & data packages to upsell & cross-sell them more features & bigger packages. SME packages for 5 -15 stick more to the network than consumer packages.

My experience with such a drill made me think that the MNO’s in Oman are shooting themselves in the foot, unless they don’t care about tapping & segmenting SME’s by selling them consumer packages.

Zain KSA’s Opportunity With The Intro of The New MVNO

Zain KSA new logo

Zain KSA new logo

The Communications & Information Technology Committee (CITC), Saudi Arabia’s regulator, has awarded two MVNO’s licenses to operate in the Kingdom and is about to award a 3rd in the coming weeks. The 3rd license is to be awarded to operate under the umbrella of Zain KSA. After being awarded an MNO license to operate in KSA with a sky rocketing fee of 6.1 billion dollars, Zain KSA started up in the Kingdom on the wrong foot.

Zain KSA targeted ethnic and bottom line of the pyramid segments for the past years of operation, launching a vicious price war; However, Zain now has the opportunity to cut down its losses, alongside gaining more market share in a very wealthy & high ARPU (Average Revenue Per User) market.

This opportunity arises if Zain offloads its mass market & ethnic segments to its MVNO. This will allow Zain KSA to focus, under its new CEO and management, on more lucrative segments & markets:

  • High end customers
  • Roaming customers (due to its footprint in the GCC & Middle East)
  • Mid End professionals
  • SME & SOHO segments
  • Tap into some of the LCA (Large Corporate Accounts) & government segments
  • Push for M2M and cloud products that are underutilized in KSA

With good subscriber base of bottom liners and very aggressive ethnic marketing strategy, Zain KSA already has the buffer to relaunch itself. Add to that, Zain’s (KSA) excellent strong mobile data capacity (4G network) throughout its coverage areas (Does not cover a lot of areas in KSA). Another good trait that Zain KSA can benefit from is its partnership with Vodafone & its GCC & Middle Eastern networks for roaming (used a lot by middle & high end Saudi customers).

Zain KSA has been absent from the enterprise market in KSA, leaving this multi-billion riyals market for the two other MNO’s: Mobily & STC. While both MNO’s are focusing more on verticals & LCA’s, little attention is given to the equally lucrative segments of SME’s & SOHO’s.

The Saudi market has not yet tapped into a big segment of its enterprise segment. The SME’s (Small & Medium Enterprise) or SMB’s (Small & Medium Business) are poorly penetrated or neglected due to the effort needed to be put into such segment. Still, it is a segment worth billions of riyals in terms of telecom revenue due to the amount of small or medium companies in KSA.

The race for M2M & cloud is starting up in Saudi Arabia and Mobily is leading the way through a newly derived division handling partnerships very actively. Zain KSA can benefit from these virgin fields and startup an early race towards dominating these fields, especially in financial & medical uses.

Zain’s (KSA) opportunity rises to rectify the strategy with the new MVNO license. Would it grab this opportunity? Time will tell!