Qtel announces partnership with Universal Music for online subscription music service

In Barcelona at the Mobile World Congress today, Qtel Group and Universal Music announced that they’ve signed a MoU (Memorandum of Understanding). Under the terms of the MoU the two will work together to establish an online music download service to be rolled out over the coming year starting with Kuwait, Qatar and Oman. The intent is to make the service available across all 18 countries that Qtel Group currently covers, said Dr. Nasser Marafih, CEO of Qtel Group.

“We’re very excited about this because we believe that content will be critical for our customers and that is going to be the driver for growth for our company in the future. We believe also that is going to be something differentiating for our company from the others in the region” said Marafih.

Rob Wells, Senior Vice President, Digital, Universal Music Group International (part of Vivendi) said “Against a backdrop of international piracy, a downturn in the sales of physical CDs, Universal Music Group International has embarked on a very aggressive business development program. We like to target specific telcos in regions and territories that show signs of great innovation, that show signs of business development acumen, and also that are interested in acquiring new customers, reducing churn levels… and our friends at Qtel has shown that music is something of great interest to their group and their customers and the service we announce today, Universal Music Group International is behind completely.” There will be exclusives offered as a part of this deal. Universal has artists like Lady GaGa, Amy Whinehouse, U2, Rolling Stones, etc. On offer will be 120,000 tracks from 3,500 artists including a “domestic Arabic repertoire.” When asked if this was an exclusive agreement for the Middle East region, Wells said that yes, “this is an exclusive arrangement with Qtel and no other deals like this will be done in the region.”

The service will run on “all platforms” said Dr. Marafih. Wells added that we should look at Singtel’s “Amped” service as a model for the compatibility of the service. Singtel Amped, according to the web site, is compatible with a wide range of handsets from Nokia, LG, Samsung, Sony Ericsson as well as Apple’s iPhone 3G/3GS. For the mobile part of the service, a customer would have to have a Qtel Group active SIM subscription, the subscription fee, which they didn’t announce at this point, will presumably be charged to the customer’s regular Qtel bill.

If Amped is something we can get clues for in other respects as well, let’s look at the other features: Unlimited music, No data charges for browsing & music downloads, Songs to own and share, Free music videos, Exclusive pre-album releases, Latest news and gossip, Meet the stars, and Synchronize your music on mobile & PC. For mobile phone, the Amped service cost the equivalent of $7 USD.

At the press conference, when asked about whether the music was DRM (Digital Rights Management) protected or not, Wells said that parts of it is, parts of it is not. Presumably that means, if we use the case of Amped again, that a user gets 15 songs per month “to download and share”, which are not DRM protected but the songs that come out of the “unlimited download share” are protected by DRM and so customers are restricted in terms of what they can do with them.

Qtel’s announcement today follows Nokia’s announcement last week when they introduced the Comes With Music service to the Middle East. With the purchase of a compatible Nokia handset, in the beginning only X6 is on offer, the customer can download as much as he or she wants from the library of about four million songs for a period of 12 months. After that they can keep the songs and listen to them for as long as they want. If they buy a new compatible handset they get to download more songs. Nokia also announced that they are dropping the DRM protection on songs bought from their online music store while it seems they’ve tightened the DRM-grip on the Comes With Music tracks.

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