PYRAMID RESEARCH Africa/Middle East Perspective
Nearly 75,000 web sites to date have registered an Arabic character URL address using any of several technologies now available to bypass the Latin character-based Internet domain name system. Most addresses were regis-tered over the past six months, since the Dubai inaugural meeting of the Arabic Internet Names Consortium (AINC). A non-profit organisation based in Los Angeles, AINC comprises member companies offering unique Arabic domain name solutions. They meet periodically to agree on standardised address suffixes in Arabic, even as they fiercely compete to win a critical mass of registrants. A frontrunner has already emerged, increasing the like-lihood that its technology will become the region's standard.
Each company offers a unique Arabic character domain name which functions as an alternative route to a web site with an existing Latin character address. The companies' differing business models are informed by their respective technologies. Providers of a front-end or "keyword" solution, which re-maps Arabic characters into ASCII code, face the formidable task of uploading the requisite software application to individual users. Providers of a back-end solution need only sign on ISPs and backbone providers, but risk total obsolescence if an incompatible solution wins the day.
THE PYRAMID PERSPECTIVE
Demand side: "Arabisation" quickens Internet uptake, Egyptian takers top the list
• The growing prevalence of Arabic character domain names stands to boost Internet adoption across the Middle East and North Africa. Viewed in a broader context, he "Arabisation" of web content and computer interface are major drivers of Internet uptake.
100 computer users across the region, with varying degrees of technical proficiency. This data was in turn filtered through a series of multiples accounting for sub-regional variance in income level, national strategies to encourage computer literacy, and general educational opportu-nities.)
New users will hail mainly from the region's lower/middle-income classes, where foreign language mastery will remain a luxury but computers will become more easily accessible. A meaningful contingent will also hail from the more affluent sphere, particularly in the Gulf states, where proficiency in English is not necessarily a prerequisite
to the maintenance of a comfortable standard of living. The latter group has had ample opportunity to use the Internet but been deterred by a relative lack of Arabic-language content.
• Demand for Arabic character domain names is difficult to forecast because of a major wild card: non-Middle Eastern companies wishing to adopt an Arabic name in order to address the region's Internet users. We forecast that the market for names within the Arab world alone will be worth $126m over the next two years. (This figure stems from our research on public- and private-sector Internet adoption
and the ratio of subscribers to domain names. It also accounts for a likely reduction in domain name registration fees.) Forty-five percent of the demand will come from Egypt, the most populous Arab country, where the government aims to make dial-up Internet access available free by October 1st. Another 43% will come from the GCC states, led by Saudi Arabia and the UAE. Most of the remaining 12% will be divided between North Africa and the Levant, with Morocco and Lebanon contributing the lion's share.
Supply side: one player leads the pack but future uncertain
• The major back-end solution provider for Arabic domain name registration is Nativenames.net, a California-based technology and Web development company. Its business model involves the installation of an Arabic platform add-on free of charge on the region's ISP servers. A server needs to run Windows 2000 or Arabic-enabled Windows, or use version 9.1 of Berkeley Internet Name Domain (BIND), an implementation of the Domain Name System protocol.
The company authourises portals to sell its Arabic domain names at the standard rate of $35, from which it takes a considerable cut. In countries where there is a single backbone provider, such as Morocco and the UAE, Nativenames need only sign on the backbone provider; the ISPs and, in turn, their subscribers, automatically fall into place.
For the countries in which additional legwork is required,
Nativenames is well on its way, having signed on all but two of Egypt's 70-odd ISPs, three out of nine in Lebanon, and five out of six in Jordan. Saudi Arabia's Internet backbone provider and regulator, the King Abdulaziz City for Science and Technology (KACST), has yet to sign on, making Saudi Arabia the company's major blind spot. In
the two months since its launch, Nativenames has registered more than 50,000 domain names.
• Exhibit 2 breaks down the market share of the major players in the Arabic domain names space. Walid.com, with 13,000 names registered and counting, is the leading front-end (download) solution provider. I-dns.net offers a rival back-end solution and dominates the Chinese character domain name space. Its strategy of signing on ISPs to exclusivity agreements seems to be less effective in the Arab world, however.
Spinoff opportunities: Arabic name management a growth industry globally
• All these solutions may become obsolete should the powerful non-profit Internet Engineering Task Force (IETF) decide to reengineer the Internet's base character set from ASCII to Unicode. This and other eventualities may lead the current Arabic domain name solutions players to try out creative spin-off ventures, enabling them to lever-age their knowledge base in other applications. Such opportunities abound in an era of blurred linguistic, cultural and national bound-aries. Western governments stand in immediate need of effective transliteration solutions for immigration and naturalisation databas-es.
Large pharmaceutical and food companies require advanced lin-guistic technologies to manage massive lists of contacts, clients and employees in Arab countries. In a region where the population will double over the next 25 years, the management of names and other proper nouns is a solid growth industry.
Joseph Braude, Pyramid Research Analyst
This Perspective provides Pyramid’s view on a significant development in the communications industry. Perspectives are a component of Pyramid’s Advisory Services.
©2001 The Economist Intelligence Unit Ltd. All rights reserved. Pyramid Research is a div. of the Economist Intelligence Unit
© 2001 Mena Report (www.menareport.com)
