1. The Role of the ISP in MENA: The Lebanese Perspective ITU Conference Oman, May 2001 Rami Majzoub Reuters Reuters * Any opinion in this presentation represents the speakers personal views

2. =>ISPs in MENA ISPs in MENA<= ISPs in Lebanon ISPs in Lebanon Case Study (Lebanon-Cyberia) Case Study (Lebanon-Cyberia) Future Role of ISPs in the Region Future Role of ISPs in the Region Agenda

3. Current Internet Users - MENA Source: ajeeb.com

4. ISPs in MENA: Enlarging the Targeted audience Some ISPs have decided to develop strategy only by focusing on the community of their connected subscribers. Some ISPs have decided to develop strategy only by focusing on the community of their connected subscribers. More ambitious ISPs are targeting the 3.5 million Arab Internet users. More ambitious ISPs are targeting the 3.5 million Arab Internet users. A minority targeting triple that figure with the convergence of mobile users A minority targeting triple that figure with the convergence of mobile users

5. Strategic stakes A Triangular Edge for a Successful ISP CONTENT CONNECTIVITY TECHNOLOGY

6. Connectivity & Access Speed:Dial-up (still the most frequent),Leased Lines (almost all countries), ISDN, ADSL Speed:Dial-up (still the most frequent),Leased Lines (almost all countries), ISDN, ADSL Cost (Still high in most MENA countries ex. Cost (Still high in most MENA countries ex. Most Moroccan Internet users go online in a cybercafé (58.3 percent) or at work (53 percent). Only 29% have home connection)

7. Content key to ISPs Portals (real time information section & building communities ) Portals (real time information section & building communities ) Creates stickiness to a site =>more traffic and/or airtime revenue, Advertising Creates stickiness to a site =>more traffic and/or airtime revenue, Advertising Easy to program into web sites (XML delivery) Easy to program into web sites (XML delivery)

8. Incorporating Media Content in ISP Media, especially newspapers, are investing in e-versions to win new readership and advertising revenue. Media, especially newspapers, are investing in e-versions to win new readership and advertising revenue. Inter-generated (Hiring internal team) Inter-generated (Hiring internal team) Outside provider Outside provider Mix of the two- using editorial teams to supplement and expand on content from wires and other providers Mix of the two- using editorial teams to supplement and expand on content from wires and other providers

9. Incorporating Financial sites content in ISP Tapping e-trading through partnerships with financial institutions Tapping e-trading through partnerships with financial institutions Online banking in MENA still lacks many services because of lack of financial regulations in the area or weak e-commerce infrastructure provided by ISP Online banking in MENA still lacks many services because of lack of financial regulations in the area or weak e-commerce infrastructure provided by ISP

10. Capitalizing on content Capitalize on content sections to raise capital from incubators in Europe. Capitalize on content sections to raise capital from incubators in Europe. Advertising (will reach $70 million in 2004) Advertising (will reach $70 million in 2004) Partnerships (Wanadoo in Morocco & Lebanon) Partnerships (Wanadoo in Morocco & Lebanon)

11. Technology Challenge Broadband access (DSL, Cable, etc…) Broadband access (DSL, Cable, etc…) WEB services & E-infrastructure WEB services & E-infrastructure GPRS/3G introducing new ISP challenge GPRS/3G introducing new ISP challenge Convergence Convergence

12. Strategic stakes A Triangular Edge for a Successful ISP CONTENT CONNECTIVITY TECHNOLOGY

13. Obstacles for ISP Development Non availability of developed infrastructure which leads to: Non availability of developed infrastructure which leads to: Higher basic necessary investment values; thus High subscription price Higher basic necessary investment values; thus High subscription price Lower Service Standard (traffic on Access lines which is not abundant, Bandwidth, etc..) Lower Service Standard (traffic on Access lines which is not abundant, Bandwidth, etc..) Limited no. of Domicile computer installations. Limited no. of Domicile computer installations. Non encouragement of Authorities to enter the Internet for censorship reasons Non encouragement of Authorities to enter the Internet for censorship reasons Non availability of clear legalization for what concerns the wide and developed services that Internet provides (ex. Voice over IP) Non availability of clear legalization for what concerns the wide and developed services that Internet provides (ex. Voice over IP)

14. ISPs in MENA ISPs in MENA =>ISPs in Lebanon ISPs in Lebanon<= Case Study(Lebanon-Cyberia) Case Study(Lebanon-Cyberia) Future of ISPs in the Region Future of ISPs in the Region Agenda

15. Why Lebanon? Lebanon has been one of the pioneers of the ISP market with DM in 1995 Lebanon has been one of the pioneers of the ISP market with DM in 1995 Lebanon is witnessing one of the most active ISP mergers & acquisitions Lebanon is witnessing one of the most active ISP mergers & acquisitions Lebanon anticipates the ISP trends in the Arab world (move towards portal & ISP business, etc..) Lebanon anticipates the ISP trends in the Arab world (move towards portal & ISP business, etc..)

16. Statistics 9% 46%15% Number of Subscribers / country Lebanon/MENA Source: Inconet

17. Lebanon: Current Situation 30 Licensed ISPs 30 Licensed ISPs Only 15 operational Only 15 operational Five Controlling the market Five Controlling the market The leading ISP (Cyberia) owning almost 50% of the market The leading ISP (Cyberia) owning almost 50% of the market 350,000 users and 125,000 subscribers 350,000 users and 125,000 subscribers

18. ISP Ventures Cyberia (#1) acquired Intracom (ex #4) in Spring 2000 Cyberia (#1) acquired Intracom (ex #4) in Spring 2000 Inconet (top 3) teamed up with Bank Audi to offer Unlimited Internet for free Inconet (top 3) teamed up with Bank Audi to offer Unlimited Internet for free Lynx (# 5) was bought by PSINET before buying back again & becoming Fiberlink Lynx (# 5) was bought by PSINET before buying back again & becoming Fiberlink Terranet & Data Management teamed up with other banks (Credit Libanais) or Telcos Terranet & Data Management teamed up with other banks (Credit Libanais) or Telcos

19. ISP = multi business Intracom launched a very successful call back business before government restriction and being bought by Cyberia Intracom launched a very successful call back business before government restriction and being bought by Cyberia Many ISPs focus on selling leased lines Many ISPs focus on selling leased lines ISPs doing web design & Internet consultancy ISPs doing web design & Internet consultancy ISPs providing ASPs service ISPs providing ASPs service

20. ISP = Portal? Cyberia => www.thisiscyberia.com Cyberia => www.thisiscyberia.com Data Management=> www.yalla.com.lb Data Management=> www.yalla.com.lb Inconet portal Inconet portal Terranet: A bilingual portal (English, French) Terranet: A bilingual portal (English, French) No one has Arabic yet! No one has Arabic yet!

21. The branding of ISP Inconet => corporate image Inconet => corporate image Data Management => pro internet Data Management => pro internet Terranet relying on telco infrastructure Terranet relying on telco infrastructure Fiberlink => high speed network Fiberlink => high speed network Cyberia => Internet for everyone: 96% identify Cyberia as the ISP in Lebanon Cyberia => Internet for everyone: 96% identify Cyberia as the ISP in Lebanon

22. b ISPs in MENA ISPs in MENA ISPs in Lebanon ISPs in Lebanon =>Case Study (Lebanon-Cyberia) Case Study (Lebanon-Cyberia)<= Future of ISPs in the Region Future of ISPs in the Region Agenda

23. Cyberia case: Company profile In 1995 Transmog Inc. SAL was established to offer Telecommunications services to the Lebanese market and later that year it began its work by deregulating the Lebanese wireless data communications market. In 1996 Transmog Inc. SAL obtained licenses that grant it the right to offer VSAT communications and Internet Services. Cyberia is a Transmog Inc. SAL trademark that was subsequently created to provide the Lebanese market with Internet Access, Online Publishing and Online Services. After its launch in the fourth quarter of 1996, Cyberia quickly established itself as the leading Internet services provider. In 1998 Cyberia launched a Consulting group to offer turnkey services to other Telecommunications companies in the region

24. Cyberia case: Milestones 1996: Cyberia is licensed to offer Internet services and connect to the International Internet backbone 1996: Cyberia is licensed to offer Internet services and connect to the International Internet backbone 1997: Cyberia launches real-time user activation using Internet Starter-kits and Cyber credits 1997: Cyberia launches real-time user activation using Internet Starter-kits and Cyber credits 1998: Cyberia launches online daily news 1998: Cyberia launches online daily news 1999: Cyberia wins turnkey consulting contract to set-up an internet provider operation in KSA 1999: Cyberia wins turnkey consulting contract to set-up an internet provider operation in KSA 2000: Cyberia acquires Intracom, the 4th largest ISP in Lebanon, launches its portal www.thisiscyberia.com 2000: Cyberia acquires Intracom, the 4th largest ISP in Lebanon, launches its portal www.thisiscyberia.com

25. Cyberia: Customer Growth

26. Cyberia case: value added services Internet Starter Kit, Cyber credits solds in pharmacies (equivalent of prepaid cards) Internet Starter Kit, Cyber credits solds in pharmacies (equivalent of prepaid cards) Software download center Software download center Webmail Webmail Interactive voice services Interactive voice services Free fax Free fax Live broadcasting of music events Live broadcasting of music events Online news center (Reuters, Daily Star, weather, etc…) Online news center (Reuters, Daily Star, weather, etc…)

27. Cyberia case: Social role Sponsored many car rallies and contributed to enhance the idea of a dynamic connected society (Internet in buses and pharmacies) Sponsored many car rallies and contributed to enhance the idea of a dynamic connected society (Internet in buses and pharmacies) Provided at a certain period in time a window to the Internet world for Syrian citizen Provided at a certain period in time a window to the Internet world for Syrian citizen New dimension of journalism with online journalism allowing itself to tackle with sometimes censored topics. New dimension of journalism with online journalism allowing itself to tackle with sometimes censored topics. Building communities: Launching of forums and debates on many controversial issues. Building communities: Launching of forums and debates on many controversial issues. Internet for Education: Widening Internet presence in schools Internet for Education: Widening Internet presence in schools

28. Cyberia case: The Government Legal framework forbids VOIP & callback system Legal framework forbids VOIP & callback system Might play a role in E-government, which needs a boost from private sector Might play a role in E-government, which needs a boost from private sector Trying new logistics with Libanpost, Mailboxes etc... Trying new logistics with Libanpost, Mailboxes etc... Pushing for ADSL. Pushing for ADSL.

29. Cyberia case: Projects & plans E-Commerce system tailor made to the requirement of each Arabic country E-Commerce system tailor made to the requirement of each Arabic country Expansion in Jordan & Syria Expansion in Jordan & Syria Prospective deals with GSM operators in Lebanon Prospective deals with GSM operators in Lebanon Moving to be an ASP Moving to be an ASP Consultancy services: services for billing Consultancy services: services for billing Public key infrastructure once legal framework is there Public key infrastructure once legal framework is there

30. ISPs in MENA ISPs in MENA ISPs in Lebanon ISPs in Lebanon Case Study(Lebanon-Cyberia) Case Study(Lebanon-Cyberia) =>Future of ISPs in the Region Future of ISPs in the Region<= Agenda

31. The Future: Catering to an ever growing user base Source: ajeeb.com

32. Back to our Roots? As Internet use widens in the Arab world the rate of users capable of thoroughly benefiting from English-language web sites drops, and thats more the case in Saudi Arabia. Today more than 45 percent of Internet users in the Arab world lack the English language skills required for full understanding of English web sites. By 2004 this group will constitute more than 60 percent of the entire Internet user community in the region.

33. Heterogeneous User Base GCC users asking for Arabic GCC users asking for Arabic North Africa divided between English/Arabic (Egypt) & French (Morocco) North Africa divided between English/Arabic (Egypt) & French (Morocco) Middle East divided user patterns (Syria closer to GCC) Middle East divided user patterns (Syria closer to GCC)

34. Mobile Content for M-ISP? Business Services (e-mail fax, Intranet, Extranet) Business Services (e-mail fax, Intranet, Extranet) Transaction Services (purchasing, banking) Transaction Services (purchasing, banking) Location Services (using GIS, cell location, etc..) Location Services (using GIS, cell location, etc..) Information (newspaper portals, business directories, cinema, weather...) Information (newspaper portals, business directories, cinema, weather...) Entertainment (games, horoscopes, lottery, sports) Entertainment (games, horoscopes, lottery, sports) SMS Headlines SMS Headlines

35. Future Consolidation for ISPs in MENA? The industry is undergoing rapid consolidation towards a more mature market with the emergence of regional players that can leverage the economies of scale, and provide a solid service (AAG) The industry is undergoing rapid consolidation towards a more mature market with the emergence of regional players that can leverage the economies of scale, and provide a solid service (AAG) Under capitalization of ISPs Under capitalization of ISPs

36. Will ISP still exist in the future? ASP ASP M-ISP? M-ISP? ? …The debate is on!... …The debate is on!...