Eurasia Com: doing the business in Turkey and the CIS

Back in January, I wrote about the Eurasia Com conference which the good folks at Informa Telecoms & Media host annually in Istanbul, taking place in either March or April. At the time, I thought it was unlikely that I would be able to attend. Happily, it did turn out to be possible after all,  meaning that I am able to report some of what was discussed at the Conrad Hotel on 23rd and 24th March.

For those not familiar with the event or with the wider series of related conference-plus-exhibition events of which it is a part, a few words of explanation:

• Informa's Com World Series evolved from what was once known as the GSM (and later GSM>3G) World Series of events. The GSM series was itself a spin-off of the GSM World Congress (now Mobile World Congress), of which Informa was the original founder.
• The GSM World Series brought scaled-down versions of the main event to a selection of locations ranged around the world's emerging markets. In each location, the aim was to gather large numbers of decision-makers from the mobile operators of the region around the host city. These locations included cities in Africa, Asia, Latin America and Central and Eastern Europe.
• The Com World Series brand was introduced a few years ago to reflect a perceived need to offer meeting points for a broader community than just GSM mobile operators. The organisers were mindful of the idea that the previously quite sharp fixed-mobile distinction was becoming increasingly fuzzy around the world. They thought about what had once been pure play mobile operators offering other kinds of broadband service, either by building new networks (copper, fibre, fixed-wireless) or in partnership with established fixed-line operators. They thought about new mobility propositions from companies whose previous offerings had not been in the cellular space. They thought about incumbent fixed-line operators merging with previously quite separate mobile business units (think in terms of what Deutsche Telekom is doing all over the CEE region).
• Throughout this evolution, Informa's series of events has stuck to a pretty successful business model, which is still in place today - operators (and other telecoms service providers) attend for free, with most of the revenue coming from any organisations with products and services to sell into the operator space. This includes the major network technology vendors and all manner of software companies, systems integrators, consultancies etc.
• Eurasia Com is a relatively new part of the Com World Series, although this year's iteration was the fourth to take place in Istanbul, having been relocated from Almaty, Kazakhstan, where the event first took place in 2006.
• The challenge which the organisers face - and which I feel they met pretty successfully this year - is bringing together a crowd from what are quite diverse markets. A large Turkish contingent (representing the likes of Turk Telekom, Vodafone Turkey, Turkcell, Avea and Koc.net) mixes with delegates from the former Soviet republics of Central Asia and the Caucasus, making it necessary to arrange for everyone to gain from presentations in Turkish, Russian and English. If you attend next year, expect to spend some time wearing a headset which pipes the simultaneous interpretation right into your ears.

That, then, is a little about the event, its origins and how it works on the day. The challenge mentioned above (making the conference relevant for both Turkish delegates and for guests from the CIS) was dealt with this year by having elements of the second day billed specifically as a 'Turkey focus' session, thereby acknowledging that there probably do exist some differences between the concerns of the local audience of those of the visitors from the former Soviet republics where market conditions are quite different.

I am pleased to report that this worked well. As a veteran of more conferences than I care to remember, I have got used to seeing events looking busy on day one and feeling a lot less vibrant on the second day. At Eurasia Com 2010, delegate numbers were, I think, possibly even higher on 24th March than they had been on 23rd.

So, what was discussed during these two days of slideware, panel sessions and offline networking? Well, in the sessions I managed to catch, highlights included:

• Informa analyst Gemma Bunting cautioning delegates to remain open minded about real mobile penetration rates across the CIS, noting that multi-SIM usage makes accurate measurement quite difficult and pointing out that in the supposedly saturated Russian market over 20 million subscriptions were added by operators last year.
• Informa's Bunting noting that ARPU is declining sharply in some markets - Uzbekistan was given as an example - USD 9/month in 2007, dropping to USD 4/month by 2009.
• Gemma Bunting wondering about the impact of Tele2's acquisition of a mobile operation in Kazakhstan and observing that the Swedish group is known for its aggressive pricing.
• Ineke Botter, CEO of Azeri cellco Bakcell indicating the a mobile money offering from her company might not be iminent but was certainly "on the roadmap".
• Mustafa Kiral of Russian telecoms investment group Altimo indicating that his company is in the market for opportunities to acquire majority stakes in telecoms operators in emerging markets - African markets were mentioned.
• Altimo's Kiral sounding lukewarm at best when the conference Chairman asked if Altimo is considering investments in the wireline space.
• Mehmet Hasanov of Aztelekom talking up the revenue potential of the wholesale business and wondering why telcos' marketing people are generally so inclined not to get excited about it.
• A few snippets about the planned privatisation of Tajiktelecom.

I was not surprised, also, to learn more in offline conversations than I did from listening to presentations. The lesson here, for those few conference veterans who do not already know, is that it's important to get proactive at these gatherings - get among the delegates and speakers, working the room and maximising the opportunity to develop a good number of valuable contacts under one roof.

My guess is that 2009 was at least moderately challenging for conference organisers and that delegate numbers across the events industry may have been negatively affected by financial worries on the part of target audiences. My recent experience in Istanbul, however, just went to confirm that there continues to be no substitute for making face-to-face contact with potential new clients and partners and that events of this type can be a pretty good one-stop-shop for doing so. I would also particularly recommend this and other events in Informa's Com World Series for the way in which they gather crowds from given higher growth regions around the globe.

Eurasia Com: doing the business in Turkey and the CIS

Telco sector bigwigs converge on Istanbul

Doing telco sector business in Turkey, the Caspian region or Central Asia?
......head for Eurasia Com at Istanbul's Conrad Hotel this March.

A belated Happy New Year to all loyal readers of (and occasional visitors to) DevelopingTelecomsWatch.

I daresay some of you will have found 2009 above-averagely challenging and are looking forward hopefully to a more prosperous and settled year ahead.

With this in mind, DTW will soon be evaluating some predictions about what 2010 may have in store for those of us with an interest in the telecoms sector in emerging markets and developing countries worldwide.

In the meantime, we will be using the announcement of the conference agenda for this year's Eurasia Com conference in Istanbul as the inspiration for a look around developments in Turkey, the Transcaucasus region and Central Asia. These are the markets from which the event gathers telecoms sector leaders for two days of discussions and networking.

My guess is that I will not be able to attend the conference - taking place at Istanbul's Conrad Hotel on 23-24 March - but I would definitely recommend it as a useful place to make new contacts and catch up with existing ones if you do business with the telecoms operators of that part of the world. I feel qualified to make this recommendation, having attended two iterations of the event, and having been involved in its development between 2006 and 2009.

This year's speaker panel includes a glittering array of telecoms leaders from both the host country and from numerous CIS markets. Those able to attend will have the opportunity gain a uniquely valuable opportunity to learn from these panellists - and some will doubtless advance their cases for doing business with the speakers' organisations.

While I daresay, however, that many of the presentations and public panel discussions will be somewhat insightful, my experience of attending many conferences has taught me that delegates can learn far more by being above-averagely proactive. This means being a real participant rather than a mere attendee. It means doing more than just scribbling/typing notes during the conference sessions. It means more than downloading the presentation slides.

So, if you make it to the Conrad Hotel in Istanbul, be sure to come prepared with the questions you particularly want answered. Then make the effort to direct those questions to relevant speakers, keeping in mind that however effectively the sessions are moderated, there will not be time for the Chair to deal with everyone who has something to ask. Should your most urgent questions not get dealt with, be sure to be one of those confident people seen springing from a front row seat to shake hands and exchange business cards with the hottest speakers the second the session breaks for strong Turkish coffee. Then might be the time you will finally make your point or extract the answers you're looking for. Or your possibly rather sensitive enquiry might best be handled over that coffee and a piece of sweet, flaky baklava. Failing that, the business card you've gained could be the key to setting up post-event conversations.

Question time: get the answers over coffee and Turkish treats at Eurasia Com

Does this all sounds like advice that's basic to the point of being a bit patronising? I hope not. It is, after all, offered as a result of having watched countless conference delegates fail to maximise the value of the investment their companies had made by paying for them to attend - even with the free tickets for which employees of telecoms operators and service providers are eligible at Eurasia Com and other Com World Series events, some costs are implied, be it plane tickets and hotel bills for out-of-town delegates, or just the cost of being away from the day job.

If you do decide to attend, and do attend on a mission to learn about developments in the region covered by the conference, what questions might you direct to the numerous worthies on the speaker panel?

Given that the CIS markets of Central Asia and the Transcaucasus region were among the first places that Russia's major telecoms players looked for international growth opportunities, you would hope that Eurasia Com is able to offer access to their top management. The event does not disappoint - gracing the stage for the opening Keynote Session will be Mustafa Kiral, Vice President of Altimo and Oleg Raspopov, who heads up the 'Foreign Subsidiaries' Business unit of giant Russian cellco MTS.

Any industry watchers with a strong interest in the latter company, might be tempted to try and squeeze in a question about the operator's hopes for its mobile broadband offering in Moscow, now that 3G services can finally be made available in the Russian capital. A full year after 3G services were offered in other parts of Russia, Muscovites learned last month that the country's military authorties were finally ready to cede control of the necessary spectrum and enable operators to switch on their W-CDMA base stations.

Given Mr Raspopov's responsibilities, however, and given the geographical coverage of the conference agenda, perhaps it might be more germane for delegates to ask the MTS man whether his company has any interest in further extending its CIS footprint. At present, MTS subsidiaries compete in Uzbekistan, Turkmenistan and Armenia. Away from the immediate focus region for this conference, further MTS business units operate in Ukraine and Belarus.

Strikingly absent from the MTS sphere of influence are two of the region's potentially more attractive markets - MTS does not compete in either Kazakhstan or Azerbaijan.

In June last year, MTS CEO Mikhail Shamolin told Reuters that his company was looking at acquisition opportunities in both countries, having decided that the prospects for a start-up operation were not good in either market.

It now appears, however, that the opportunity to make an acquisition in Kazakhstan has now passed. That country's mobile arena is contested by four operators, with the market split as follows, as of end-December 2009, according to the WCIS service offered by the organisers of Eurasia Com, Informa Telecoms & Media:

• Beeline Kazakhstan (Vimpelcom), 43.27% share
• KCell (TeliaSonera Eurasia/Turkcell), 42.87
• Neo, 7.29%
• Altel, 6.57%

The two leading mobile operators, then, are controlled by MTS's main rivals in the region and are therefore, surely, extremely unlikely targets for addition to Mr Raspopov's Foreign Subsidiaries Unit. Altel, too, as a rare example of a CDMA operator in the region, strikes me as a company one cannot easily imagine on the MTS shopping list.

Neo, a late entrant GSM operator which went to market in 2007, would be the logical choice for an MTS purchase. A majority stake in this cellco, however, is to be snapped up by Tele2, the Sweden-headquartered pan-European telecoms group. This transaction, as reported in December, involves Tele2 paying around USD 77 million for the 51% stake held by Kazakhstan's incumbent fixed line operator, Kazakhtelecom, which also owns 49% of KCell. According to a Wall Street Journal report, Tele2 has the option to buy the remaining 49% of Neo shares in five years' time from private investment group Asianet Holdings BV.

It will now be interesting to see how much Tele2 makes of the opportunity that MTS has declined to puruse in Kazakhstan. Interesting, too, to see how far the company's usual preference for competing aggressively on price will impact on the Kazakh market.

Speaking on a conference call, Tele2 said that Neo currently has lower prices and lower ARPU than its two larger rivals, so it remains to be seen whether tariffs can be cut further in order to gain market share. According to the WSJ article, a market share of 20% is what Tele2 has in mind.

Of further CIS markets likely to prove attractive to MTS, perhaps only Azerbaijan remain. A June 2009 article here at DTW noted that the Caucasus region country, although quite small with a population of just under 9 million, is oil-rich and relatively prosperous. It is notable, therefore, that of the three groups with footprints across the southernmost CIS markets, only the TeliaSonera-Turkcell joint venture Fintur Holdings has a presence - in the form of market-leading MNO Azercell, none of whose competitors are aligned with a significant multinational telecoms groups. Of these competitors, one will be represented at Eurasia Com by its CEO - Ineke Botter, who heads up Bakcell, is among the speakers. A cheeky question one might direct to Ms. Botter would be to ask whether she feels either her company or the third entrant, Nar Mobile, is a likely acquisition target for MTS or Vimpelcom, which similarly has no presence in Azerbaijan.

With Tele2 having seized the opportunity to move into the Kazakh market, conference delegates may be wondering what impact this may have on the country's telecoms landscape. Questions along these lines can be raised at Eurasia Com, the ideal time for this probably being a morning session on Tuesday 23rd March which deals specifically with the rapid maturation of the Kazakh telecoms market. Fielding the questions will be Kuanysbek Bahytbekovich Yesekeev, Chairman of that Kazakhstan Agency of Information Technologies and Telecommunication, and Maxut Sauranbekov, President of CDMA operator Altel.

A new feature of the conference this year is a day two session focussing specifically on the Turkish market. A very strong line-up of speakers will be on hand to debate the key issues. These include:

• Erkan Akdemir, CEO of Avea, the mobile operator in which incumbent wireline telco Turk Telekom holds a controlling interest
• Mehmet Toros, Turk Telekom's VP International and Wholesale
• Tayfun Cataltepe, the Chief Corporate Strategy & Regulations Officer of market-leading MNO Turkcell
• John Samarron, CTO of Vodafone Turkey

This year's event looks set to be even more useful than previous iterations and I look forward to feedback from colleagues and contacts who are able to attend.

Telco sector bigwigs converge on Istanbul

Russian state telecoms company to go mobile - but how?

A cursory reading of telecoms sector news items emanating from Russia this month makes it clear that a big shake-up of the country's mobile sector may be on the cards. It is less clear what form this will take.

Whatever happens, a reorganisation and a change of priorities for Svyazinvest, the mainly state-owned telecoms holding company, look set to be the drivers for this shake-up.

The change of priorities is a shift from playing mostly in the fixed-line space towards being much more aggressive in the mobile business than is currently the case.

Svyazinvest's key assets are controlling stakes in seven large regional telecoms operators and Rostelecom, the national domestic long-distance and international operator - the Russian Federation does not have a single fixed-line incumbent operator along the lines of those typical of many European, Asian and Latin American countries.

Some of the seven regional operators are quite active players in the mobile space. For example, Uralsvyazinform (the dominant telco in the Urals region) had nearly 5.8 million subscribers on its GSM network by March 2009, according to WCIS. Siberia's Sibirtelecom has slightly fewer subscribers on its own network.

These figures, however, are dwarfed by those of Russia's big three cellcos - MTS, Vimpelcom and MegaFon, which have nearly 159 million subs between them, a collective market share of about 82%.

According to Maria Kiselyova of Reuters, writing this week, the Russian Government wishes to play a bigger role in the telecoms sector "and in the high-yielding mobile business in particular." With this in mind, writes Kiselyova, Svyazinvest has plans "to become the country's fourth-largest mobile phone operator by consolidating its mobile assets and partnering with private regional providers." Citing an article in business daily Vedomosti, she says that Svyazinvest is reportedly discussing partnership a scheme with regional providers, including Tele2.

Tele2 Russia Chairman Yuri Dombrovsky is reported to have said that his company and Svyazinvest could create a joint venture to build a third or fourth-generation mobile network in Russia and that Tele2 would be interested in using Svyazinvest mobile networks in regions where it has no presence, while Svyazinvest would use Tele2's networks in other regions in return.

Other reports this week, however, suggest that Svyazinvest might also opt for a quite different route towards more active participation in the Russian mobile market. A TelecomPaper article, for example, contends that the company "is seeking to close a merger deal with one of the top three mobile operators in Russia," and cites Communications Minister Igor Shchyogolev as saying that this "would be the optimal path for the development of Svyazinvest's mobile business."

If this is the more likely option, I wonder which of the big three cellcos would be involved. A clue might be extracted from a look at the ownership structure of Szyavinvest itself. The Russian Federal Property agency owns 75% minus 1 share. The next largest shareholder, with 17.31% plus one share is Comstar-UTS, whose main shareholder is Sistema - owner of a 52.8% stake in market-leading cellco MTS. I personally find the intricacies of Russian corporate structures to be fairly bewildering at times. Is it naive of me, then, to wonder if an tie-up with MTS is, due to this overlap of interests, more likely for Svyazinvest than an arrangement or merger with either Vimpelcom or MegaFon?

Whether it will be with MTS, another of the 'big three' or with Tele2, various reports do seem to settle around one fairly consistent idea - that Svyazinvest will not remain content with a relatively minor role in Russia's mobile industry. Having organised and hosted a number of telecoms sector conferences in Moscow, I retain an interest in this story and will try to follow it as closely as I can.

Russian state telecoms company to go mobile - but how?

Russia & CIS Com 2009: a good place to do business in the region

I'd like to pass on my good wishes to everyone working to deliver another great Russia & CIS Com conference and exhibition in Moscow this year. The 2009 iteration of this useful annual event takes place 2-3 June at the usual venue, the Radisson SaS Slavjanskaya Hotel.

It was my pleasure to produce the 2007 and 2008 versions of this event during my enjoyable stint with Informa Telecoms & Media so I will be interested to hear about how a new wrinkle in the design of the agenda works out.

We observed last year that while delegate numbers were strong on the first day, the crowd was noticeably thinner on the second day. We were keen to improve this situation in 2009 and beyond for the sponsors and exhibitors whose support makes the event possible. I think we worked out what was causing the problem.

With most of the events in the Com World Series, of which Russia & CIS Com is part, the conference gathers delegates from quite a large number of countries. The Moscow event, in contrast, tends to appeal mainly to telecoms sector executives from the Russian Federation, Ukraine and Belarus only. Quite a high percentage of visitors come from the many telecoms businesses based in Moscow itself. Whereas out-of-town visitors to a conference tend to spend most of the two days of any event at the venue, those based in the venue city find it harder not to keep stepping out to keep on top of their day-to-day responsibilities. I think for a lot of the Muscovites in attendance, one day works out as a reasonable time commitment to the conference, but two days is a bit more of a stretch.

The device we dreamed up to resolve this was to split the agenda into two distinct chunks - each a conference within a conference, I suppose. So this year's Russia & CIS Com features one highly cellular-centric day of discussions and another which is focused more on wireline and fixed-wireless broadband, IPTV etc. Even in this age of accelerating convergence between fixed and mobile networks/services/technologies, we thought there is still a meaningful distinction between the "mobile crowd" and the "fixed crowd", at least for now. My hunch is that this will work well, delivering two somewhat overlapping crowds across the two days. I expect to hear that sponsors and exhibitors have gained from this and I daresay my former colleagues have briefed them on how to maximise the networking opportunity.

One returnee from the 2008 speaker panel is Konstantin Tikar, General Director of the Belarusian incumbent fixed-line operator, Beltelecom, whose mobile unit, CDMA operator Belcel has recently struck a revenue share deal with Velcom, the local subsidiary of mobilkom austria. According to a recent Total Telecom article, market-leading GSM operator Velcom will soon begin selling mobile broadband services in partnership with its rival Belcel. The article states that the 50/50 revenue-sharing agreement will see Velcom take control of Belcel's retail mobile broadband sales and customer service operation, while Belcel will manage and operate the infrastructure side of the business. Services will run on Belcel's EV-DO network, which currently supports data rates of up to 3.1 Mbps. With the country's GSM operators having yet to deploy W-CDMA networks of their own, this deal enables Velcom to get a 3G mobile broadband proposition to market ahead of rivals MTS Belarus and Turkcell-backed Life :) Belarus.

My guess is that Belcel will benefit greatly from having the much more successful Velcom handling the sales and customer service side of things. The CDMA operator's mobile market share has remained stuck at under 2% since the summer of 2006. Fifty percent of something significant has to be better than one hundred percent of not very much, I guess.

Mr Tikar is quoted in the Total Telecom story as saying "The cooperation [announced] today allows Belcel to increase the quality and capacity of its network significantly," while Velcom CEO Helmut Duhs observes that the agreement "provides our customers with a mature mobile broadband service and future-proof option to upgrade, once even more advanced technology becomes available in Belarus."

I'd like to congratulate my former colleagues on securing some strong speakers for Russia & CIS Com 2009. Among those joining Mr Tikar on stage at the conference will be:

• Gulnara Khasianova, General Director, SkyLink
• Donna Kordner, CEO, Tele2 Russia
• Michael Chobanyan, Managing Director, CDMA Ukraine
• Garrett Johnston, Group Director of Strategic Marketing, MTS
• Pavel Kuznetsov, CEO, Central Telegraph

If you aim to do business in that part of the world, I'd urge you to build a trip around a visit to the conference and exhibition.

Russia & CIS Com 2009: a good place to do business in the region

Refreshing news for emerging markets MVNO proponents?

Kirène Mobile avec Orange: new MVNO on the scene in Senegal; graphic from www.kirenemobile.sn

In March I asked which of India or Africa would be the first to see mass-market MVNOs. I tentatively concluded that perhaps India looked the better bet.

In that discussion, I made reference to a presentation by Carlos Valdecantos of mmChannel, a technology company dedicated to the development and management of digital entertainment services and platforms on a B2B format. In this presentation, Carlos argues that while Africa, taken in the round, might not yet be ready for the wide scale development of MVNOs, certain markets could possibly prove to be more attractive for investors in prospective virtual mobile operators. For Carlos, the high-potential markets are South Africa, Ghana, Morocco, Algeria, Tunisia and Egypt. This is due to their meeting several criteria that he sets:

• good market size (population level, GDP)
• strong economic liberalisation
• dynamic telecom sector

For Carlos, mid-potential African markets for MVNOs are Namibia, Mozambique, Cameroon, Gabon, Congo and Equatorial Guinea. These are described as having a reasonable mix of suitable market size, developing economic policies and economic reform underway. In this model, a further group of low potential markets is defined as being countries which "show an interesting opportunity in some of the key characteristics but completely fail to meet others." These are: Botswana, Tanzania, Kenya, Uganda and Sudan.

This leaves a large number of African countries which Carlos describes as "no go markets" for MVNOs.

Yet it is from one of these "no go markets" that news comes today of an MVNO being launched. According to a Cellular News item, Kirène, a mineral water brand in Senegal says that it has launched an MVNO in the country, running on the Orange Senegal network. The mobile service will be branded as "Kirène Mobile avec Orange", with the Mobile Virtual Network Enabler (MVNE) services being supplied by Transatel.

Quoted in the article is a gentleman I've had the pleasure of meeting more than once on the conference circuit, Philippe Vigneau, Transatel's Director of Business Development: "Being a forerunner for both companies, this project was really important to us. First of all because it was the first partnership concluded in Africa on a brand agreement (with Orange). On the other hand it is the first time that a food-industry brand, turns to a worldwide operator to develop a mobile telephony offer."

I will watch with interest to see how successful this enterprise turns out to be. Is Senegal the right place for such a venture? Or is Carlos Valdecantos right to content that the country is among the "no go markets" for prospective MVNOs?

I am also intrigued by the notion of a food and beverage sector brand getting into the MVNO business. In his presentation, Carlos observes that there is likely to a strong correlation between the long-term profitability of an MVNO and the strategic assets the company/brand brings to its mobile venture. He cites assets and examples including:

• systems + billing + customer base - example: Tele2 using fixed-telephony IT infrastructure to support virtual mobile service offerings across Europe.
• differentiated value proposition/specific target segment - example: ay yildiz, an MVNO aimed at Turkish immigrants in Belgium, with special prices on calls to Turkey and Turkish language customer support.
• access to customers/sales and recharge channel - example: Fresh Mobile, an MVNO offering in the UK from the Carphone Warehouse, the country's leading independent mobile phone retailer.
• access to huge customer base - Tesco Mobile is the MVNO offering of the UK's largest supermarket chain, which has a distribution channel unrivalled in its pervasiveness; the chain also collects rich customer data via discount card schemes.

On my travels in Turkey, I've also heard it suggested that Istanbul's big three football clubs, each of which has a fanatical fan base numbering in the millions, might enter the MVNO space once market conditions make it feasible.

I am much less clear what a mineral water brand brings to an MVNO project, much less in a potentially very challenging market such as Senegal. That said, I have never visited the west African country and could not comment on the degree to which Kirène is a dominant, well-loved brand. Perhaps brand equity alone will be enough to make this enterprise succeed.

Refreshing news for emerging markets MVNO proponents?