In a growth market such as the Middle East and Africa, what is happening in the competitive world of the specialist telco software business? How are the smaller, specialist companies competing with the hardware vendor giants?
The last 2-3 years has seen significant changes in the OSS/BSS space, particularly when one looks at M&A activity. Ericsson has bought LHS, Telcordia, and Redback, while Huawei has acquired the telecoms part of the ITS (International Turnkey Systems) business.
It seems that the leading network infrastructure vendors are looking for their slice of the software pie and who can blame them? Margins have shrunk in the hardware market – Node Bs and BTSs are a lot cheaper than they used to be and operators are investing heavily in the latest OSS/BSS, in VAS software. But how can the smaller organisations compete? There is certainly an argument on both sides.
Firstly, larger organisations need to understand the importance of the brands that they are buying into – many of which have been successful due to their flexible approach; being able to change their business model to suit their customers without lengthy approval processes. These smaller, more nimble software companies may sometimes leave the competition standing simply because they can adapt more quickly to what the customer is asking for. A one size fits all approach might be perfect for group operators but not necessarily for individual telcos and new market entrants.
Also, people buy into people. This is much more important in this region than in other parts of the world. In the Middle East and Africa the business community is much more personal, built on trust and long term relationships. If the acquisitions are to be a success it is essential that the best talent is retained within these larger organisations.
Kerry Koutsikos from Tecnotree sums this up perfectly: “Tecnotree has recently expanded its’ operations by more than double in the MEA region recently due to its success . We put it down to people. Most of our talent comes from operators originally; these individuals understand the problems and how to solve them. Getting the right people is very difficult; firstly we identify the right strategy for each part of the region, before recruiting the right people.”
Some employees feel much more at home in blue chip companies whereas others prefer to be in a much smaller environment, in which they feel that their talents are more closely recognised and rewarded.
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