The emergence of MVNO in the Middle East & North Africa has been slow in comparison to Western Europe and other global markets. However, recent regulatory developments in key markets are creating new openings. Significant opportunity now exists for mobile operators and other businesses to gain first mover advantage while the MVNO market is nascent. This Viewpoint gives an overview of MVNO progress to date and explores growth opportunities in the Middle East and North Africa.

1. MENA
The Next Growth Market for MVNO?
By Michael Dargue and Tim Heal
The emergence of MVNO in the Middle East & North Africa has been slow in comparison to Western
Europe and other global markets. However, recent regulatory developments in key markets are
creating new openings. Significant opportunity now exists for mobile operators and other businesses
to gain first mover advantage while the MVNO market is nascent.
April 2012

2. Cartesian: MENA – The Next Growth Market for MVNO?
Copyright © 2014 The Management Network Group, Inc. d/b/a Cartesian. All rights reserved. 1
MENA Mobile Market
Mobile markets in the MENA region have reached or are approaching saturation. Four countries are
expected to reach over 200% penetration by 2015: UAE, Qatar, Saudi Arabia and Oman. Such hyper
penetration correlates with a downward ARPU trend as users split usage across multiple SIMs.
Price competition in the region has also had an impact on decreased voice spending. Operators are
cognizant of future pressure on margins due to increasing competition from potential new entrants, and
the continuing predominance of the prepay segment.
Figure 1: Mobile Penetration Forecast for Top Four Markets 1
Once market saturation is achieved, MENA mobile operators will increasingly turn towards additional
products and services to drive revenue growth. MVNO is a potential revenue growth strategy, especially for
those operators seeking to improve market share in specific customer segments. MVNOs can bring
experience and capabilities in acquiring and addressing the needs of these segments.
Many MNOs across the region are still to define their position with respect to MVNO. A strategic assessment
of the threat and opportunity is required to determine the optimum proactive, reactive or defensive stance.
MVNO Developments in MENA
To date, MVNOs have been relatively limited in number across the MENA region. However, some markets
have seen multiple MVNOs launches, principally Turkey, Israel, Morocco and Oman.
In Turkey, Avea has brought on various partners under the branded reseller, or “pre-MVNO” model; for
example Fenerbahçe, the Istanbul-based football club. True mobile wholesale (i.e. “light” and “full” MVNO)
is not yet available in Turkey due to on-going regulatory considerations on wholesale pricing, but models of
deeper MVNO / MNO integration are expected to emerge soon.
1
Company Reports; Cartesian

3. Cartesian: MENA – The Next Growth Market for MVNO?
Copyright © 2014 The Management Network Group, Inc. d/b/a Cartesian. All rights reserved. 2
Following on from regulatory action taken in 2007, a number of MVNOs have already launched in Israel.
MVNOs are forecasted to eventually account for 5% to 10% of the mobile market,2
which would make Israel
one of the more advanced countries for MVNO in the MENA region.
In Morocco, the state-owned postal service plans to launch the country’s fourth MVNO towards the middle
of this year, and has contacted the mobile operators to request a wholesale pricing offer.
As a final example, the MVNO model which has seen the highest level of success in the region is Oman; the
Ministry of National Economy released figures last year indicating that MVNOs had acquired over 500,000
subscribers by June 2011, representing 12% market share.
Figure 2: MVNO Activity across MENA Region3
Regulation
The dominant factor driving activity (or lack thereof) has been the timing and extent of regulation. While
some countries have not declared any short or long term intentions to evaluate the introduction of MVNO
into the local market, other Telecommunications Regulatory Authorities (TRAs) are pushing ahead with
MVNO regulation. Two recent examples of the latter include Egypt and Saudi Arabia:
(1) The Egyptian Communications Minister recently announced that the first tender for MVNO
licenses would be issued by the end of March 2012, where Telecom Egypt is expected to bid. This
has now been delayed and is expected in May 2012.
2 Wireless Intelligence; Israel Regulator (MoC)
3
Telecommunications Regulatory Authorities; PrepaidMVNO; Press releases; Zawya; Cartesian
Saudi Arabia
Egypt
Oman
Yemen
Iran
U.A.E.
Qatar
Bahrain
Kuwait
Iraq
Syria
Lebanon
Libya
Turkey
Jordan
Israel
June ’10
2009 2009 2009 2009
2010Oct. ’10
Turkey
LibyaPhone
Jan. ’11
MVNO
Brand License Model
Sub-Brand
Key
April ’09
July ’09 Sep. ’10
May ’09 Oct. ’10
Nov. ’09
Oman
Licensed Licensed
T2T
Comms
Home Cellular
Licensed
Ituran
3Q11
Rami Levi
Israel
Additional potential MVNO entrants have
been licensed by the Israeli regulator.

4. Cartesian: MENA – The Next Growth Market for MVNO?
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(2) In Saudi Arabia, the Communications and Information Technology Commission (CITC) launched a
public consultation on MVNO licensing in January 2012, and announced plans to issue the first
three MVNO licenses later in the year.
The extent of regulation also varies, for example, the maximum number of MVNOs permissible at any one
time: At one end the Jordan TRA has imposed no limits to the number of MVNOs; at the other end, in Saudi
Arabia, the recently released CITC consultation document proposed that only one MVNO could be hosted
per MNO.
Finally, players should also consider the importance of regulation post launch. The recent closure of Virgin
Mobile Qatar demonstrated consequences of failing to maintain alignment with the TRA.
Potential MVNO Models
Looking globally there is a range of MVNO models, some of which have demonstrated greater success than
others. In particular, the retail and ethnic MVNO models could be attractive options in MENA.
Figure 3: Examples of MVNO Models
Retailers have favourable MVNO economics through existing distribution networks and logistic partnerships,
high footfall, and often strong brand presence. Internationally, some retailers have nudged up core business
revenues by integrating mobile into innovative loyalty propositions.
Globally, ethnic and international calling MVNOs have been effective in capturing market share in migrant
segments. Significant migrant populations exist in some MENA countries, in some cases outnumbering the
nationals (for example, more than 80% of the UAE’s 8 million people are expatriates). Some MNOs such as
Du in the UAE have already launched ethnic-focused propositions, but there is still a sizeable opportunity
for MVNO entrants. Such asymmetries also create opportunities in roaming, as well as other services such
as international remittance.
General Retailer
Ethnic, International & Roaming
Business/M2M
Converged / Fixed Providers
Low-Cost, No Frills
Community Based
Select
MVNO
Examples

5. Cartesian: MENA – The Next Growth Market for MVNO?
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In addition, M2M MVNOs are expected to drive growth in subscribers and revenue. Requirements for
remote security are common in the MENA region, and the level of industry creates opportunity to reduce
costs through M2M-enabled distributed automation and control.
Finally there are is opportunity for MVNOs to develop differentiated propositions targeted focussed on
business customers, from SME to Large Enterprise and MNC, although this segment is much harder for
MVNOs to compete where significant price discounting is the norm for larger accounts
Key Considerations for Entrants
For MNOs, the emergence of MVNO requires a strategic response. A successful MNO strategy will capture
opportunity from MVNO entry while mitigating new competitive threats.
Potential MVNO entrants need to understand the justification for launch. A key question is whether the goal
is to: a) capture telecoms revenues, or b) drive revenue uplift to the core business.
Partner selection and assessment is of key importance to both parties. Entrants will need significant support
from the host MNO, requiring a collaborative and viable pitch and proposition to address gaps in the MNO’s
existing business.
Those seeking international expansion opportunities will have to consider their entry strategy carefully.
There is wide variation in local market characteristics across the MENA region; business models,
propositions, brand and customer segmentation will all have to be analysed and tailored.
Cartesian Experience and Support
Cartesian has deep experience in assisting MNOs, MVNOs and regulators achieve their objectives. We have
worked on over 40 MVNO engagements globally and can support across a number of areas, including:
 Strategy and business case support, including detailed cost and revenue modelling
 Negotiation support for contracts and commercial terms
 Securing funding
 Vendor and partner identification, evaluation and selection
 Assessment of MVNO policy, regulation and market impact

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technology and digital media sector. For over 20 years, Cartesian has advised clients in strategy
development and assisted them in execution against their goals. Our unique portfolio of professional
services and managed solutions are tailored to the specific challenges faced by executives in these fast-
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