VP strategy & corporate development, Intigral: “LTE will enable operators to sell content-based services”
Juan Jose de la Torre, vice president of strategy & corporate development, Intigral, UAE is speaking in the Innovate! track on Day Three of the Broadband World Forum 2012, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam. Ahead of the show we speak to him regarding the importance of digital content and the opportunities that next-generation mobile broadband will bring.
Please tell us about Intigral and how it leverages the growing mobile broadband space?
Intigral is a digital media and entertainment distribution venture with its primary focus on the MENA region. Our objective is to create, aggregate, localise and deliver content to telecom operators across multiple platforms. We are in essence bridging the gap between operators, content providers and end-users by delivering immersive television, video, mobile, online and interactive entertainment experiences, while serving as a strategic digital distribution partner for global media and entertainment content providers.
You’re right in saying that the mobile broadband space is growing, as indeed it is! The Middle East’s mobile broadband market is expected to grow from $3.7bn to $9.4bn over the next four years (CAGR 21 per cent). This represents an attractive revenue growth opportunity for telecom operators. Our services, when bundled with broadband and mobile services, create a unique value proposition for operators, enabling them to secure additional market share and lower churn in a highly competitive market. It is an exciting venture, and certainly a great wave to be riding.
From a shareholder perspective, you’re a unique combination of a mobile carrier and a media company. Is this a model you expect to see replicated by others in the industry?
Our shareholders have interests in telecom, media and entertainment across the Middle East, Turkey, South Africa, South Asia, South East Asia and Australia. We have been fortunate to be in the centre of the realisation of a vision designed by market leaders in their respective areas, who have joined to build Intigral. Our organization has a unique blend of telecom and media expertise enabling us to roll-out content services across mobile, web, IPTV and OTT platforms with digital advertising encompassing all channels. In a matter of three years, Intigral has become the largest independent digital content solutions provider in the MENA region, managing over seven million content transactions every hour on average.
Why does it make sense for a telecom company to get involved in content and applications?
We envision a not-too-distant future surrounded by digital and interactive experiences, and powered by advanced communications and connectivity services enabling on-the-go lifestyles. Engaging content is expected to permeate user experience and encourage consumers to share thoughts and ideas at an exponential level via apps accessed over next generation communications networks. Content and applications are an avenue for operators to engage their consumers, earn brand loyalty and monetise that relationship at different levels.
To provide some context; the mobile content and services market in the Middle East is currently sized at $8.6bn. This is expected to grow at a CAGR of over 23 per cent by 2016. Within this operator revenue accounts for $7.8bn (in 2011) and is expected to grow at a CAGR of over 18.5 per cent by 2016.
Why is regional content important for an operator?
Operators are experiencing an unprecedented competition from non-traditional telco players that we call format invaders. These format invaders are versatile and have the ability to rapidly deploy digital services with limited investment (contrary to operators), and over the operator’s network in the form of Over-the-Top services. Thus, accessing the best of breed digital content, specifically localised content, can provide operators with a competitive advantage in the value chain. A few regional operators have launched initiatives focused on local digital content. Some are now, ambitiously, focusing on developing separate digital units to create a comprehensive portfolio of digital products and services.
What impact do you think the rise of 4G technologies will have on the digital content landscape?
The impact will be tremendous. Deploying an LTE network will enable operators to sell content-based services and data-intensive applications, such as interactive TVs, video blogging and advanced gaming. Consumers currently turn to OTT providers for such services. The introduction of 4G LTE will help operators strengthen their presence in the content value and distribution chain. It will also provide operators with the ability to tap into new revenues streams by replacing declining revenues with core telecom services. A high price point is expected to constrain consumers from adopting 4G services and paying a premium for content services over those networks. Operators will need to evaluate their 4G strategies to increase the adoption of those services and promote the development of an ecosystem built around 4G services involving devices, content, apps and advanced services such as Machine-to-Machine and m-health. To provide some perspective on adoption rates; 3G services took nearly a decade to gain full global traction. Key regional operators have either launched 4G or have on-going initiatives at varying stages of development such as STC, Mobily and Zain in KSA, Etisalat in the UAE and many others in the GCC area.
What opportunities do you foresee connected TVs to have on the digital content industry?
As smart devices and telecom access become more affordable, customers will start moving into integrated digital experiences with a strong focus on seamless content consumption across devices. Thus, we believe connected TVs we will become a centre element of this new usage pattern by providing end-users with the ability to adapt content to their needs, while enabling a “social” dimension into the content consumption. Customers will be able to share their content and applications preferences and influence others with their content consumption. We envision a future where connected TVs and devices will enable the delivery of customised digital experiences to each user. Installed bases for connected TVs in the Middle East are expected to reach 19.7 million by the end of 2016—that’s a CAGR growth of over 90 per cent between 2012-2016.