Until a decade ago, all of the Gulf Cooperation Council (GCC) telecom markets were still monopolies, and operators around the world were still chasing the idea of the next 'killer app' as 3G networks were just beginning to proliferate. A lot has changed since then; GCC telecom markets have expanded significantly, backed by progressive regulatory environments and conscious efforts by regulatory authorities to stimulate competition. In addition, networks (particularly mobile) have also evolved and contributed to the vision of a 'connected society'.
Despite being the last of the GCC countries to liberalise its telecom markets in 2009, Qatar has rapidly moved forward in terms of infrastructure development. It advanced five places in World Economic Forum's (WEF) yearly Global Networking Index to 23rd position in 2013, ahead of all its GCC peers.
This dynamism of the industry, particularly with anytime/anywhere access to the internet, has presented significant opportunities to both operators and the government in Qatar.Ubiquitous access to high-speed broadband remains integral to the Qatari government's vision to reduce its reliance on the hydro-carbon sector and, in turn, develop a knowledge-based economy. This means enabling its citizenry to be more informed and connected, to enjoy next-generation services and content, and to benefit from a more efficient and responsive public services system.
Qatar's national ICT Strategy 2015 and the recently announced national broadband policy are two initiatives that are aimed at building both infrastructure and skills essential for this digital transformation of the economy.
Another initiative worth mentioning is the Qatar National Broadband Network (Q.NBN), which has committed to invest $500 million to roll out an independent, nationwide high-speed fibre network. The organisation plans to cover 95% of households and 100% of government bodies and businesses in Qatar by year-end 2015. Liberalisation of the market in 2009, with the launch of mobile services by Vodafone, resulted in a significant improvement in the quality of mobile services and rationalisation of service tariffs.
However,the fixed-line segment continued to suffer from quality-of-service (QoS) issues and capacity constraints. Establishment of the Q.NBN was aimed at addressing these challenges,as well as lowering entry barriers associated with the high cost of deploying fixed infrastructure for future providers.
Vodafone is utilising Q.NBN's fibre-to-the-home (FTTH) network to offer high-speed broadband services; Ooredoo is developing its own fibre network parallel to Q.NBN. IDC is of the opinion that, in a country like Qatar, with a small geographical footprint, having two parallel fibre networks may not be the most economical solution. However, these two fibren etworks, coupled with high-speed mobile broadband infrastructure, will provide sufficient capacity for Qatar's population for the next five to ten years.
From the operators' point of view, development of underlying broadband infrastructure has provided significant opportunities to innovate and garner data revenues, but it has also opened a Pandora's box of challenges that may undermine the viability of their business models. Operator business models have changed significantly, as the killer-app concept has mutated into a digital media industry that competes head-to-head with telcos. Services are being delivered as applications without the involvement of telcos, which puts pressure on margins and threatens their traditionally strong bond with end users.
As the digital services market continues to evolve, more customers are eschewing core telecommunications services in favor of experience-rich, over-the-top (OTT) services. This change in customer preferences, with the growing usage of applications, rising smart device penetration, and the increasing prominence of OTT services, leaves telecom operators with a difficult choice: Adapt and innovate or be left out of the digital revolution.
Towards this, operators (both regionally and in Qatar) continue to re-evaluate their business models, data offerings, tariff packages, and even network rollout plans, as well as their go-to-market strategies. While traditional services are still offered, operators have embarked upon a business transformation and are looking to integrate across the digital value chain, both forward (future technology) and backward (existing technology), by promoting local content generation and application development.
Developing, emulating, or partnering for OTT services, as well as exploring digital opportunities in adjacent markets, particularly business-to-business-to-consumer (B2B2C) services leveraging the Internet of Things (IoT) technologies (for example, smart utilities and smart cars), remain top priorities for telcos. It should also be noted that new permutations of technologies such as smart cities are now beginning to reach the critical a mass of innovation as infrastructure development to support the FIFA World Cup in 2022 is increasingly gaining traction.
The possibilities across smart cities are endless and will continue to usher in new services and convenience that was previously unheard of. IDC believes that operators will play a critical role here, not only providing the necessary infrastructure for the provisioning of smart city services, but also leading the ecosystem towards innovation by bringing together various systems and stakeholders.
Despite its challenges, Qatar's telecoms market is still rife with opportunity. With so many moving parts converging over a what is becoming a well-developed network infrastructure, I feel confidentthat the era of pervasive connectivity is about to begin in Qatar. This could potentially make the country a regional hub for digital innovation.