Open to opportunity

Efficiency & expansion into lucrative new services offer telcos the best opportunity
(L-R): Anne Bouverot, Hassan Kabbani, and Dr Eesa Bastaki of the UAE ICT Fund disucss telco challenges
(L-R): Anne Bouverot, Hassan Kabbani, and Dr Eesa Bastaki of the UAE ICT Fund disucss telco challenges

Share

While operators in the Middle East often view themselves as being under greater pressure than telcos in other regions, partly owing to the fact that many of them are still reeling from the effects of new competition, it is clear that most of the challenges they face are in fact common around the world.

Telecom executives in the region were reminded of this fact at the recent Abu Dhabi Telecom CEO Summit in the UAE, which was attended by high level executives including Hassan Kabbani, who serves on the board of directors at Oger Telecom, Osman Sultan, CEO of Du, and Ross Cormack, CEO of Nawras.

The event was given a more international flavour by the presence of Anne Bouverot, director general of the GSMA.

During a panel discussion, Bouverot stressed that operators around the world are facing similar challenges. “I hear very similar messages in all regions around the world. Everyone in this industry talks about over-the-top players, the huge growth in traffic, about the new needs of customers and the protection of prices, so that is really something that we see in each and every region,” she said.

However, where the experience of operators in the region might differ from their counterparts in the other parts of the world is that some of these threats or challenges have exerted themselves more quickly – and perhaps more strongly – in the MENA region.

“In terms of the Middle East and North Africa region, first of all we are seeing some of the changes very quickly and very rapidly so you have probably even a bigger challenge than other regions. Therefore it is important to take actions quicker,” Bouverot added.

Bouverot highlighted the growth in data traffic as one of the most pressing issues facing operators, and one which telcos must address quick.“ It is important to address this growth of data traffic. It is probably the most immediate challenge that operators face today and it is really about facing it from a number of different angles,” she said.

Bouverot pointed to various ways in which operators can tackle this challenge while minimising capital expenditure. For example, she said that there are numerous ways initiatives that operators can look at such as network sharing through tower companies, or techniques to boost network efficiency, such as optimisation and monitoring techniques.

But ultimately, most of these initiatives must be directed at improving customer service. “Quality of service is the point,” Bouverot said. On the subject of customer service, she added that operators can also modify the way they package and market services as a means of helping to control operating costs. For example, operators should look at operational issues such as how they control their customers’ use of data and how quickly they enable customers to upgrade
their services.

“There are some important ways to manage offers, also bundles of SMS and data services,” Bouverot said. “There is a lot of intelligence that operators need to apply to the network side and to the marketing side of their operations and I think it becomes a bit more complex way of really managing your businesses where you look at numbers and customers. Operators need to really be careful about the detail of what they do.”

In terms of further growth, Bouverot sees significant potential for mobile operators in areas including connected life, Near Field Communication, and Machine-to-Machine communication. M2M is about connecting large numbers of devices, often to transfer small amounts of data, which gives operators the potential to generate revenues if they can generate the necessary scale.

“There is some potential in going for volume of subscribers or connected devices that doesn’t only look at more bandwidth,” she said.

“Operators in the whole ecosystem need to be developing this in collaboration. It becomes a platform for ecosystems, for entertainment, for education which I think is very important and you need to work on that for generations. It becomes a platform for all sorts of new services. So yes there are challenges and it is important to address them but there also some opportunities.”

Making the case

Speaking from an operator’s perspective, Matthew Willsher, chief marketing officer, Etisalat, said that telcos must do more to educate their customers about the huge sums that they are investing in their networks.

“We have to keep customers in the front of our mind. The challenge for operators is making sure customers appreciate the value we’re adding and therefore they don’t see us as just a quiet player that is just putting water into the taps,” he said.

Operators need to work more in “grading the quality” of the industry, so that customers understand that they have to pay different tariffs for different levels of service, in a similar way to how hotels are graded with stars. “You expect to pay more in a five-star hotel than you do in a three-star,” Willsher said. “I don’t think customers have good ways to simply understand, with kitchen logic, what is a good experience in telecoms. This is because we have invested so much of our networks and we don’t invest enough in measuring and managing customer experience and giving that feedback to customers, so they know what experience they are getting and therefore they are more prepared to pay for the investments we are making. I think that is another key challenge we have in managing this huge surge in traffic with the revenue.”

But educating customers about the cost of delivering services is not the only challenge. Operators must also accept the fact that telecom prices are declining, even as they invest heavily in their networks. Osman Sultan, CEO of UAE telco Du, is familiar with the situation, and he questions the sustainability of it. “There are some irreversible trends. Yes, the cost of telecom will eventually go down, and the sophistication of services will increase. The investment on infrastructure will multiply. But if we add this equasion and we put on the side the expectation of customers who want to have more fancy services and more bandwidth for less price, something is wrong and it will not be sustainable,” he said.

These forces are likely to force a shift towards a telecoms sector that is made up from layers, with some companies looking after the infrastructure and others focusing on services, Sultan said. “We will have a different layering in the business…there will be a layer of infrastructure and there will be a layers focusing on services. There are immense savings that can be achieved and cost efficiency and optimisation that could happen because that will be fundamental in this equasion and in allowing the sustainability. If you just offer everything for free and the best quality, you are not able to sustain what it takes,” he said.

Oger Telecom’s Hassan Kabbani, drew a comparison between telecom operators and the transportation industry. Just as the logistics or transportation sector charges for space, and allows companies to use that space or capacity how they want, so telecom operators are also offering space, albeit for transport of digital content.

“We need to change this into a different model whereby we will be offering space according to whatever the consumer wants, regardless of what they do with that space,” he said.

“This is very important because it will take us out from this discussion that we have been having for a long time about how operators should protect their business and their revenue.”

Instead Kabbani said that operators should look at their existing strengths including local know how, call centres, distribution and billing capability. These are capabilities that the over-the-top players need, according to Kabbani.

“There is a long list of assets that the operator will have and the OTT will be distributors,” he added.

“We do not want to block the OTT services because the industry and our customers want these services and we are serving that customer.”

Kabbani agreed with other members of the panel that operators would benefit from offering more diverse data packages, thereby placing some restrictions on some users’ access. This could encourage some of the OTT players to talk to the operators, he added.

“We will be offering a secure and smart environment whereby we will decide on the flow and the level of service. This will help our business, and the OTTs will come to us to discuss,” he said.

Ross Cormack, CEO, Nawras, added that operators need to find opportunities by “seeing the world in a different way”. He added that with so many different customer segments there is also an opportunity for operators to “slice and dice” services in a different way.

“Imagine selling categories of service, whether gaming, video-on-demand or others in packages that customers can understand the value more easily. If we could just get everyone thinking outside the fear factor, I think that is when creativity will come back and we can actually grow our presence even faster.”

 


Going for growth

During a keynote address at the Abu Dhabi Telecoms CEO Summit, Anne Bouverot, director general of the GSMA, spoke about the growth of the mobile sector and the creation of a “connected economy”.

“There are 800 mobile operators worldwide who are members of the GSMA, which is pretty much all of them. 109 in the MEA region are members of the GSMA. This is a very important region for us,” she said.

Bouverot added that the mobile industry is creating a connected economy. “There are today 6.6 billion connections in the world of which 475 million are in MEA. But I prefer to talk about the people behind the connections because a number of us have more than one device. There are 3.6 billion individual subscribers worldwide and about 300 million subscribers in the MEA region. Those are colossal numbers of people and this is increasingly moving to mobile broadband. Globally there are 1.3 billion mobile broadband connections and in the MEA region the numbers are smaller, but the growth is much faster than in a lot of other regions.”

“In this part of the world as in many other places, mobile is the way people will experience the internet. In developing countries, mobile is the way people will experience the internet, so the mobile industry is really bringing the internet to the population all around the world.”

 

 

REGISTER NOW | Webinar Event | Security you can bank on – Safeguarding the Middle East’s financial sector

Presented in partnership with security and network specialist Cybereason, the second in the three part webinar series will bring together a panel of experts to discuss how banks and financial institutions are evolving their service offering while simultaneously staying one step ahead of the cyber criminals who seek to bring their operations crashing to the ground.

Editor's Choice

Emerson expands analytics platform for industrial enterprise-level wireless infrastructure management
Plantweb Insight platform adds two new Pervasive Sensing applications that manage wireless networks more efficiently with a singular interface to the enterprise
Digitalisation seen as a competitive advantage by Middle East private businesses
Nearly 80 per cent of private business leaders acknowledge that digitalisation can impact business sustainability
Etisalat introduces Multi-Access Edge Computing architecture delivering best-in-class video streaming performance for 5G networks
MEC architecture achieves performance gains of as much as 90% in video streaming, validating how ultra-low-latency applications will be delivered over 4G and 5G networks

Most popular

Don't Miss a Story