Setting the 2015 roadmap

Different levels of deployment have been developed in the Middle East and Africa
Operators built new revenue streams during 2014 and now they need to consolidate these new business verticals.
Operators built new revenue streams during 2014 and now they need to consolidate these new business verticals.

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Despite the variety of challenges that operators are facing across the Middle East and Africa region, telcos have been flexible enough to improve their revenues by generating new sources of income and monetising the investments made when they enhance their networks.

James Wu, president of Carrier Business Group at Huawei Middle East, believes that the industry saw a number of milestones across mobile and fixed broadband deployment, a fact that helped to bridge the digital divide in MEA and promote high-quality broadband connectivity. Wu added that the industry moved towards a new software-defined future in 2014.

“Operators will focus on more innovative digital services concepts. Even though penetration is extremely high, population and GDP growth will continue to be important growth drivers. The explosion of Mobile Broadband will create new demand that will be partially offset by the loss of revenue due to VoIP substitution. Household and enterprise consumption will continue to rise, providing continued impetus to the sector,” comments Fahad Al Hassawi, CCO at du.

According to Tarek Saadi, president at Ericsson North Middle East, the evolution of new services and experiences has been made possible by the convergence of information and communication technologies (ICT), such as broadband, mobility, smartphones and the cloud.

“This development is set to continue in our region, with the application of ICT services becoming a natural element of most processes and practices within the Middle East business and society,” Saadi added.

Wolfgang Wemhoff, chief technology officer at Ooredoo Oman thinks that public spending in ME will help to support faster technology deployment related to ICT. “Governments will continue leveraging on technology to ensure development of the economy with digital at the core. Specific verticals will be prioritised (health, education, transportation). B2B segment is becoming the main growth driver in relative terms and we expect it to continue growing in the different segments of government, corporates and SMEs.”

Regarding the coming trends, Dr. Riad Hartani, partner at Xona notes that MEA is a very diverse region. “As far as 2015, different regions will have different priorities. In some regions of Africa, operators will have to work further on monetising their customer base and overcoming the challenges faced by low ARPU deployments. In some of the Gulf regions, the focus is on consolidating their regional footprint, geographical streamline and progressing towards becoming the society's digital platform.”

On Africa, Adnan Kureshy, head of Marketing and Communications Middle East and Africa at Nokia Networks, commented that mobile financial services continue to grow in Africa. “The number of mobile money wallets has surpassed that of bank accounts in major East African markets including Kenya, Tanzania and Uganda. As take-up of mobile money services grows, cross-border money transfer services are emerging as the next opportunity for operator players.”

In other regions of MEA, the focus will be on speeding up next generation broadband rollout and evolving the services offering, Hartani said. “Throughout MEA, the main opportunity is to build evolution roadmaps that are specific and tailored for the region, in a way that could be different from what is seen in other regions of the world.”

Dalya Al-Khalaf, director of Strategy and Planning at Vodafone Qatar, agrees with Hartani as she believes that operators are going to focus more on optimising their networks, deploying more micro-cells to accommodate concentrated demand. “As operators, we need to carefully manage the investment in infrastructure required to meet our customers’ expectations and give them the best possible customer experience,” Al Khalaf noted.

On this topic, Scott Gegenheimer, Group CEO at Zain said that operators in the MENA region, in particular, are looking to continue driving efficiencies within their networks, and looking to synergies within their operations. Profitable growth of data services will also be relevant, he said.

“All network operators worry about being a dumb pipe, and whether revenues will be able to support the levels of network investment that need to be made. However, consumers and businesses will always need connectivity, and the big problem we have as an industry is having been unable to monetise this increase in demand. We need to streamline our operations and develop a sustainable business model. The industry made a miscalculation by offering unlimited data plans, and data volumes grew much quicker than expected, and now the industry has to adjust,” Gegenheimer added.

Wu predicts that the extension of mobile broadband services, a greater industry standardisation, new virtualised cloud environments and digital business services will be the trends developed in 2015 in the MEA region.

Kureshy also said that the region is likely to see more merger and acquisition activities, and business agreements such as tower sharing. “MEA operator groups, such as Etisalat, are currently considering acquisition targets. African operators will also continue to seek cost optimisation avenues by offloading tower management.”

Amjad Shacker, general manager Corporate Communication at STC, believes that the Middle East region overall has been a star performer in the telecommunications sector. Countries like the UAE, Kuwait and Bahrain, among others, have developed impressive infrastructures and are providing up-to-date services to their subscribers. “Saudi Arabia remains one of the region’s most competitive markets. This notion is going to be further reinforced when MVNOs start operating in Saudi Arabia. Such competitiveness ensures heightened urgency to bring in the latest infrastructure and to develop advanced services for customers.”

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