Mobile in Palestine : New Mobile Monday group formed

The Palestinian telecom sector is growing. Exports in IT, software and mobile are finding customers in regional markets. Access to capital is improving with new VC firms dedicated exclusively to the Palestinian IT sector. At the macro level, the Telecommunication Regulation Commission (TRC) will soon initiate oversight activities, ensuring a more transparent environment. Finally, last November saw Wattaniya Mobile became the second wireless carrier to serve the West Bank.
These changes are inspiring local technical entrepreneurs to focus on mobile. Last night marked the launch of the world’s 100th chapter of Mobile Monday- in Ramallah. Mobile Monday Palestine (www.mobilemonday.ps) is a grass-roots networking organization for mobile professionals. More than 150 people attended the launch event under the patronage of Prime Minister Salam Fayyad and the presence of Dr. Mashhour Abu Daqqa, Minister of Telecommunications and Information Technology.
The founder of Mobile Monday Palestine is Dr. Yahya Al-Salqan. After six years and nine patents, Yahya left Sun Microsystems in Silicon Valley to start Jaffa.net (www.i-jaffa.net). “In Silicon Valley, activities like Mobile Monday are part of the essential infrastructure for entrepreneurship. It is important to create a similar structure here for allowing experts to exchange ideas and strengthen the industry”.
The Palestinian mobile sector received a big boost when two West Bank focused investments funds were announced this year. The Middle East Venture Capital Fund is the first technology venture firm focused exclusively on the West Bank. Investors include George Soros, Jeff Skoll and the European Investment Bank. Another entity dedicated to providing growth capital to SME’s (small and medium sized enterprises) is the Palestine Investment Fund. PIF launched in January with USD 15 million. One of their core focus areas is information and communications technology.
Early stage technology ventures require more than just access to capital. Since 2004, the Palestine ICT Incubator (PICTI) has been working with partners such as Google, Cisco, UNDP and Intel to provide mentoring and support for Palestinian start-ups. PICTI conducts training seminars and has implemented four rounds of a business plan contest, “Team Start Palestine.”
One PICTI success story is YooyaLand, an Arab language children’s “edutainment” portal acquired by Hadara, the ISP business unit of Paltel Group. YooyaLand founder Alia Abu Shmeiss was approved by PICTI in 2005 and incubated for 18 months. PICTI then connected YooyaLand to Hadara, which ended in an M&A transaction worth $1 million in investment and USD 450,000 in equity.
However, the number of likely domestic acquirers is extremely limited. Most would agree that the Paltel Group dominates all aspects of Palestinian telecommunications. Paltel Group includes Jawwal (wireless), Paltel (fixed) and Hadara (ISP). Jawwal was the main sponsor for last night’s Mobile Monday event. Earning USD 350 million in annual turnover and a market cap of more than USD 1 billion, Paltel Group accounts for 40% of the total market cap of the entire Palestinian Stock Exchange. Limited competition has enabled relatively high margins and Average Revenue Per User (ARPU) of $16, well above the $12 ARPU in neighboring Jordan.
When asked about mobile entrepreneurship, Ammar Aker, CEO of Paltel Group, cites his own organization. “Jawwal is a company of young people. The average age here is 28 years old. We are creating a core group of determined young professionals with the skills to lead. By the way, one third of this group is women.”
There are success stories among the small and medium sized enterprises (SMEs) in mobile as well. Some of these companies are able to service the lucrative Gulf market from the Palestinian Territories. For example, Gaza-based Tatweer Business Services is selling ringtones, recorded in a Gaza studio, to the Dubai telecoms group du.
Souktel leverages SMS to provide a real-time classified market in Palestine. Funding came from three entities, the World Bank, Synergus and King Abdullah of Jordan. They now provide services for organizations such as US AID, Coca-Cola, the Red Crescent and Sesame Workshop.
The mobile sector in Palestine is in transition. Programs like Mobile Monday, PICTI and the Middle East Venture Capital Fund are a helpful resource. Of course, each start-up must face its own unique challenges, as in the Arab proverb: “Every head has its own headache.”