Tuesday, June 18, 2024
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    How MENA broke the bank

    As Telecoms Middle East gets underway in Dubai, Paul Skeldon takes a look at how the MENA region continues to go from strength to strength, with markets becoming ever-more lucrative as fraud falls

    The Middle East and North Africa (MENA) region has become one of the biggest success stories of the mVAS and carrier billing markets in the past five years. A surge in use of the web – particularly over mobile – during the pandemic saw millions of consumers across the region turn on to just what fun there was to be had in digital entertainment. With many unbanked, carrier billing become the default for how they paid.

    Mobile internet penetration in the region continues to rise post-pandemic and is expected to surpass 350 million connections by 2023, according to Statista. This has also driven a surge in tech investment in the region, most notably in 5G, AI and cyber security. 5G has become particularly popular in Saudi Arabi and the UAE since its initial limited roll out in 2019.

    Content is king

    From a content point of view, the MENA market has embraced many of the tropes of other content and VAS markets elsewhere in the world, with sports, news, games and video entertainment all flying high.

    The most popular mobile games in the region are what you would expect; strategy, action and sims, together accounting for 63% of the market according to the MENA-3 Games Market Report 2022. However, hyper causual gaming is set to be the most popular games category in the region going forward, according to Data.ai’s State of Mobile MENA 2023, growing 28% in a year and its 2.6 billion downloads accounting for 31% of all downloads. By contrast, simulation games account for around 18%.

    The esports market is a significant growth driver in the MENA gaming industry. The report highlights that 73% of gamers engage with esports in some capacity, with 14 million esports enthusiasts and 11 million esports gamers. Saudi Arabia has the highest revenue, and Egypt has the largest.

    As time as gone on, the market has also come to be defined by a raft of ‘localised’ services, many tapping into the particular tastes in the region – religious content and localised sports and even poetry and traditional stories.

    Social media use in the region has also exploded, with five MENA nations already lying way above the global average of 59.3% for uptake of social. The UAE has 100% uptake, Bahrain 98.7%, Qatar 96.3% and Lebanon and Oman both on 90.5%.

    Financially, this is injecting a lot of money into the region, with GO-Globe data suggesting that internet ad spend in MENA’s top 14 social markets is worth $4.4bn in 2022.

    Apps too are extremely popular. Across 2022, app store spending in the region rose 10.3% year-on-year to $3.1 billion according to Data.ai’s State of Mobile MENA 2023 report. Daily time spent grew 3% to 4.5%, while new downloads increased a massive 45.7% to 13.8 billion – an average of 26,200 apps downloaded per minute.

    Users in Saudi Arabia proved to be the most engaged of the country’s key mobile-first markets (Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, and Israel), with an average of 5.5 hours spent on their phones per day.

    Battling fraud in MENA

    This has created a thriving digital entertainment economy across the region, which while attracting investment – not least in infrastructure (see panel) – has also attracted fraudsters.

    Battling this has become key to making this success story continue and there have been some real success here. In fact, the annual DCB Index carried out by anti-fraud company Evina and DCB experience developer Telecoming finds that the region is in stunningly good health.

    Ranking each country on a five-point scale, the DCB Index provides insights into the Direct Carrier Billing market of countries in the Middle East and Africa region (MEA), ranking them according to their current DCB status and potential to develop this growth-boosting mobile payment method further.

    For the first time, the 2023 edition of the DCB Index includes three new countries with positive ratings: Algeria at 2.9, Botswana at 2.3, and Saudi Arabia leading with a score of 3.4.

    Among the countries it has looked at for a number of years results reveal that Morocco is the leading country in the ranking, with the highest score (3.6 out of 5). Almost all mobile players are deploying DCB, and that’s why Morocco’s DCB market is a reliable and consistent sector. The market’s resilience and steady progress point to a solid foundation for future DCB development.

    South Africa is second this year with 3.5 out of 5. Mobile users in ZA have quickly adopted alternative payment methods, such as mobile money, reaching 8 million users in South Africa this year. When combined with effective cybersecurity, this trend will enable DCB to boost revenues for mobile players significantly.

    At the same stage, Iraq (3.5 out of 5) and Egypt (3.5 out of 5) differentiated by opening more opportunities for DCB deployment and increasing their protection against fraud attempts on Direct Carrier Billing. Saudi Arabia (3.4 out of 5) is one of the new countries in the ranking and follows close behind.

    Also, in the Middle East and North Africa, UAE (3.3 out of 5) and Kuwait (3.0 out of 5) stole the show, surpassing last year’s leaders, Qatar down to 2.9 this year from 3.3 in 2022 and Tunisia that goes down to 2.9 from 3.3 in 2023. Algeria is also new onboard and has the same level as Tunisia, with 2.9 points out of 5 on the list.

    “As per the latest DCB Index analysis, mobile penetration in Africa and the Middle East is on track to surpass 90% by 2023,” says Roberto Monge, COO of Telecoming. “This significant growth reflects the expanding accessibility of mobile services across these regions. Notably, our findings show an impressive rise in innovation, with the indicator climbing an average of 3.4 points out of 5 this year alone. This trend is joined by the substantial growth of the most innovative new mobile payment solutions.”

    He adds: “These advancements are vital in driving the mobile economy, where DBC has already established a prominent presence. Telecoming is witnessing the region’s dynamism and the exciting developments currently shaping the market.”

    David Lotfi, CEO of Evina, says: “This year’s ranking shows a modest increase in the overall level of security among DCB players operating in the MENA region. This positive trend is welcome, but should not mask the growing disparity in security levels between players.”

    Lofti concludes: “Some players are investing in their development and security on the DCB and reaping significant benefits in terms of growth and profitability, while others are caught in a downward spiral where they find themselves unprotected and under attack by fraudsters who target the least protected regions of the world and avoid defended players.”

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