An assessment of the OTT TV opportunity and threat for telecom operators in the Middle East.

1. OTT: A Threat to Telecom Operators? Presentation to SAMENA, April 2010

3. Why should telecom operators get into the digital content game?

4. Which roles should operators play in the digital content ecosystem?

5. What are the specific opportunities inherent to the Middle East market?

8. Game

9. Social Networking

10. Utilities

12. Skype

13. MessagesWeb / Web apps Source: Morgan Stanley research Source: AppsFire

16. 54% of MENA queries

17. 70%of Egypt queries

18. 80%of Saudi queriesSource: Google

19. 6 The advent of these global OTT players is not necessarily bad news for telecom operators Increase in data traffic Higher ARPU iPhone user US 1.63 ARPU of the average customer Western Europe 2.45 Source: Booz & Company

21. 8 Telcos should get into digital content, but this is not where the money is for them Mobile revenues in selected regions & countries, by type (2009) Projected market size $7bn Apps sales (2013E) $40B $75B $82B $21B $162B $37B $18B Content 1% 2% 4% 5% 5% 6% 10% 12% 8% 13% 9% 10% P2P messaging 18% 9% $1.6tr 10% Telecom industry revenues (2013E) 8% 11% 7% Other Data 40% 37% 23% Voice A drop in the bucket 0.4% Apps sales represent only of overall projected telecom revenues in 2013 Middle East India USA Korea China Japan Africa Source: Informa Global Content Forecasts 2008-2013, and Mobile Operator Revenues Update 2010 Q2. Source: Booz & Company

22. 9 The real economic value of digital media for telcos is to strengthen their core business through… Increasing ARPU Reducing churn Acquiring new customers

23. 10 In the Middle East, global competition is weakenedby specific factors… The regional opportunity is very small compared to other regions Global players do not have access to local / Arabic content Entertainment & media market by region (US$ billion) They might be restricted from operating in the region (licensing & regulatory constraints) Source: PWC

24. 11 Better access to local content … and telcos have an opportunity to leverage unique differentiating levers Billing relationship Telecom operators’ differentiating levers Particularly relevant in the Middle East

26. Wholesale capacity provider to MVNOs & SMART players

27. Drive traffic

28. Network open to all content providers

29. No direct investment in developing content

30. Management of device & content experience

31. Heavy investments required

32. Strong brand required

33. Compete on being trusted partner for 3rd party content partners

34. Open network to 3rd parties

35. Leverage assets to enhance 3rd party content & services

36. End-to-end customer experience ownership

37. Branded devices, content, services

38. Mixed revenue models, including advertising

39. Retain control over customer experience only related to core offerings, not for all content

42. Customer analytics

43. Marketing & Promotion support

44. Access to multiple operators

45. Multi-platform

46. Offer

48. Customer analytics

49. Billing

50. Customer Care

51. Marketing & Promotion

52. Needs

53. Targeted and local contentExamples of partnerships Strong portfolio of Content Provider partners Supplier account management program Health content provider DMC developed their own iPhone application

54. 15 Nadeek – STC’s Sports portal

56. Billing relationship for paid gamesBenefits to Jawaker

58. Invision YouTube channel

59. MMS

60. Email shot

61. TV guide

64. 19 Digital and video creative produced by Intigral run across STB and web platforms… On box promo Invision.com.sa YouTube

65. Thank you © 2010