The United Arab Emirates boasts the highest mobile phone penetration in the world at more than 2.3 phones for every person, yet less than a sixth of people also access data through their handsets.
That offers operators a unique growth opportunity in a saturated home market, where more than three-quarters of the population are foreign-born. Many are low-paid laborers who spend a large portion of their wages contacting home.
It's very important I speak to my family so I know what's going on back home, said Pablo, 22, a Filipino waiter in Dubai who has been working at an Asian restaurant for a year.
He spends one-third of his 1,500 UAE dirhams ($410) basic monthly salary on a pre-paid mobile phone subscription to communicate with his mother, father and sisters in Manila.
Pablo is also wireless carrier du's ideal customer for fuelling its growth away from basic services to data-rich offerings as it challenges former UAE monopoly Etisalat.
The average low-income wireless customer typically spends no more than 100 dirhams per month, much of which goes on voice calls home. But as the price of handsets and data packages fall, workers are expected to choose increasingly cheaper and interactive ways of communicating with loved ones abroad such as instant messaging and social networking.
Data generated about 15 percent of Etisalat's domestic revenue last year and 9 percent for du. The latter has gained an estimated 40 percent mobile market share since its launch in 2007 and is now trying to boost average revenue per user, or ARPU, by targeting business and wealthy customers as well getting low-wage people to use more services.
You need to find ways to monetize this data - different tariffs, different users, different type of segmentation, said du chief executive Osman Sultan.
The UAE's phone penetration is the world's highest at more than 230 percent. Yet only 16 percent of people also access the internet through their mobile phone, according to a report from the local regulator.
There's still growth in the market -- this won't be driven purely by adding subscribers, but from data and internet revenues, said Irfan Ellam, Al Mal Capital telecoms analyst.
Mobile data and fixed broadband still have a pretty low penetration compared to the West, relative to GDP per capita.
About 3.5 million smartphones were shipped to the Middle East in the first-quarter of 2011, up 45 percent from a year-earlier, according to Canalys, and were forecast to achieve compound annual growth of 18 percent between 2009 and 2014.
All operators are pushing smartphones because they drive more data use, said Pete Cunningham, Canalys lead analyst.
The growth of data has caught regional operators by surprise, and made it painfully clear that their pricing and ability to offer such services must quickly evolve.
With data traffic exploding and revenues not growing in the same proportion, investments required to maintain service levels end up eroding the return on operator's investments, said Marc Biosca, Principal at A.T. Kearney.
Operators could create new business models more reflective of actual network usage, upping data charges and slashing voice tariffs, said Martin Mabbutt, Nomura telecoms analyst.
The difference in voice and data pricing is just a legacy of history, he said. Data revenues will inexorably rise. Fundamentally, it's a question of increasing the number of data users. All customers are using their phones for voice, but only a fraction are using data beside SMS.
Vodafone Qatar appears to have found a way to navigate from voice to data without much of the pain that its regional peers appear to be experiencing.
Like du, Vodafone Qatar, which began operations in 2009, has targeted low-income residents. The operator offers subscribers free access to social networking sites such as Facebook and now has a 45 percent share of the Qatar market and a 25 percent revenue share.
Vodafone Qatar users also get 10 megabytes of free data per month if they recharge at least once and more than half of subscribers now use mobile internet.
Data usage is through the roof, said DeEtte Christie, Vodafone Qatar head of online. In a market like Qatar, the majority don't have access to a PC, but everybody has a cell phone. By giving customers free megabytes, they become comfortable and adopt additional consumption. For many, the free megabytes are training wheels for the mobile web.
The most popular sites are social media, followed by forums and community-generated content and news sites, both local and from expats' home countries, said Khalifa Saleh Haroon, Vodafone Qatar head of online and corporate strategy.
You can get online on low-end handsets now, even a poor 2G Handset, added Christie. It might not be the experience you or I want, but for someone where this is the way they can talk to their friends and family back home, they are going to do it.
Saudi Arabia, on the other hand, is a unique market where mobile broadband services have made significant inroads, due to poor fixed internet access across the kingdom.
For every three mobile phone users, there are two for mobile broadband subscriptions -- the sixth highest ratio globally -- according to data by the International Telecommunications Union.
Saudi Arabia's conservative social and religious rules -- women are not allowed to drive and mixing with the opposite sex is strictly controlled -- have fueled this demand for value-added mobile services.
BlackBerry Messenger and Facebook are often the easiest way for Saudi Arabia's young population -- about two-thirds are under 30 -- to communicate, a fact not lost on Etihad Etisalat (Mobily), with data accounting for about 18 percent of the operator's revenues last year. Mobily also has a 70 percent share of Saudi Arabia's mobile broadband market, with more than a tenth of its 22 million subscribers also active data users.
Our growth is fueled by that (mobile data) -- how much more can you charge for phone calls? said Medhat Amer, Mobily chief information officer. We have created new usage scenarios by promoting smart phones aggressively.
(Editing by Reed Stevenson and Mark Heinrich)