Innovation ‘is key’ to future telco growth

May 26, 2009 4:55 pm

Speaking to delegates attending the Telecoms Leaders seminar, Mohammed Al Ghanim, Director General of the UAE Telecommunications Regulatory Authority, said that the sector has continued to grow despite the downturn.

He added that it had been more profitable during the period and seen penetration reach almost 200%.

Mobile phones, he said, have become a basic tool to survive.

With the make up of the Gulf region being so diverse, opportunities for new services that would perhaps not be needed in other regions have been created.

New services

Examples include the ability to transfer money to a worker’s home country.

Etisalat pointed to the fact that within the UAE, some $7bn in remittances were transferred in 2008 via money exchanges, offering a huge opportunity for mobile companies that offer the service electronically – particularly as many of the people that need to make such transfers get only one day a week off and do not want to spend it queuing to complete the transaction.

Etisalat has launched, or is in the process of launching, a number of mobile commerce packages, including mParking – to pay for parking metres in Dubai – and is planning the ability to pay for Dubai Metro or cinema tickets using a mobile phone.

Khalifa Al Shamsi, vice president of marketing at Etisalat, said that mobile commerce is a key focus for the company. ‘It is a major opportunity for us to differentiate ourselves and to bring major value and revenue to us as a company.’

Multi-platform offerings

Mobily is also looking at how it can expand its service offerings and work with multiple partners. Khalid Al-Kaf, CEO of Mobily, told AME Info that operators need to change the culture of wanting to develop, own, run and maintain every service across their network.

Customer requirements are diverse and often niche, so telcos need to involve many developers and run an open platform.

‘Look at the Apple store and how they invited in a lot of developers for the iPhone. That is what will happen with mobile broadband; that is where we are saying it is not the game of the operator alone, it is the operator partnering with these developers. And among these developers, some will be successful, some will fail. And you should be exponentially expanding your platform to attract more of these developers to host [programmes] on your platform delivering niche services.’

Fixed line broadband has changed customer expectations, allowing them to use a variety of services from third party suppliers and to visit the sites they want to go to – and their expectations are the same with mobile internet and broadband usage. Vodafone Qatar said that any company that believes that it can take a ‘walled garden’ approach, where it dictates to customers the services they can and cannot use, will ultimately fail.

Grahame Maher, CEO of Vodafone Qatar, said that that style of business is dying out and although he accepts that services such as Skype are often blocked in the Gulf region, operators need to find ways of embracing and offering them.

‘The Skype model of the future may not be exactly what it looks like today,’ he said. ‘But what customers are saying is that they want to make international calls at low cost, Skype works, so give us a model that works.’ He believes that model may be a low cost monthly charge to then be able to use the service, saving the customer money but also making money for the companies involved.

Investment in services

However, while much attention is going into mobile offerings, telcos in the region are also looking to improve their fixed line services. Most offer both mobile and fixed – including Vodafone Qatar as its service is gradually rolled out – and they are looking at how they can improve the customer experience. Certainly in the GCC, current broadband offerings are not to the standard of those offered in much of Europe or the US, but telcos are investing in their network.

Etisalat, for instance, is putting fibre to the home or office throughout the UAE. Abu Dhabi is scheduled to be ready this year, followed by the rest of the UAE. Once installed, it means a number of new services that require higher broadband speeds and better quality of service – such as video on demand – can be launched. However, while fibre to the home gives the opportunity of faster speeds, if the back end is not ready to take advantage of these new speeds, then customers will not see any benefit.

While the telecoms sector has not suffered as much as other industries during the financial downturn, companies are looking at where revenues will come from in the future – and one obvious market is the growing use of mobile data. CEOs speaking at the event made it clear they did not believe they could dictate to the customer what services they took, from whom and when. Instead, they said, it is time to begin working with partners to offer a range of niche services for customers to tap into when they need.

And as Vodafone Qatar’s Maher point out, customers don’t necessarily know the difference between mobile and wireless broadband, and frankly don’t care, as long as the experience is positive.