Last month’s Smart Handheld Summit, which focused on the challenges telcos face in a world increasingly dominated by data, revealed significant disagreement between operators on how to tackle the key challenges they face.

The event, which was held in Dubai by Arab Advisors Group, attracted some heavyweight speakers, including Paul Doany, former CEO of Oger Telecom, Nayla Khawam, CEO of Orange Jordan, and Osman Sultan, CEO of Du.

But while the speakers agreed on the need for increased operational efficiency, there was far less clarity on exactly how telcos should tackle the threat posed by over-the-top players such as Google and Apple.

Indeed, while most of the operator CEOs present agreed on the need to create new business models to take on the challenge posed by OTT players such as Google, there was less indication of exactly how operators would be able to achieve this aim.

Nayla Khawam pointed out that increased access to the internet via smartphones has brought the advantage of “increasing the cake” for the industry, including telcos.

“The main point in our industry is to increase the cake and today with the disruptive introduction of smartphones the cake is increasing hugely. All our history is adaptation to new technologies, which are very often disruptive,” she said.

However, she added that given the pace of change presented by smartphones, operators must take a “long term view”. Within a few years, LTE is likely to be a necessity, according to Khawam.

“People spend more time on social networking than the other applications on the internet and the impact of this is booming capacity usage. For the operator it is increasing the cake. Even as prices are dropping, it is also an opportunity. I think in a few years time LTE will be needed.”

Du’s Osman Sultan offered a more sombre appraisal of the landscape that operators have found themselves in, and disagreed with the view that operators had managed to “increase the cake”.

He said that operators had “tried a lot of applications” such as mobile payments, which failed to become significant revenue drivers. However, he agreed with Khawan that the main driver that is increasing the cake is online applications such as social networking.

To illustrate the challenge that operators face from OTT players, Sultan offered an interesting analogy, comparing operators to pipes, handsets to showerheads, and data to water.

“Is the tap more important than the pipeline that brings the water, or the water? This is the ecosystem. Now new taps exist that make it more fun, so you need to get more water in the pipe and people are inventing new ways of treating the water. It’s a whole ecosystem and it will continue so let’s get beyond the matter of are we friends or not. It is one unique ecosystem where everyone will participate,” Sultan said.

Sultan was clear that operators should avoid trying to expand into areas such as launching their own apps stores. However, he also suggested that operators do need to create new revenue streams.

“From the telecom point of view related to these smart handhelds, what is the business model, the revenue model that we can build?” Sultan asked. He added that the answer is not yet clear. “Today we have built our entire revenue model from the access. This is the traditional view of what telecom operators do, they build for access.”

While this access business has served operators well and remains profitable, it is also under pressure, and operators must address this fact. In a grim warning to all operators, Sultan questiioned whether the access model will still be profitable in five years time.

Indeed, as broadband access increasingly becomes perceived as a basic right, the more operators are likely to see profits from access eroded, according to Sultan.