Fea­ture: tel­cos in 2020

It’s hard to imag­ine, but 2020 is just around the cor­ner. What might the telecom­mu­ni­ca­tions in­dus­try look like then in the Mid­dle East and Africa?

Comms MEA - - News - by Ben Mack

2020 is just around the cor­ner. Just what might the telco in­dus­try look like then in the Mid­dle East and Africa?

There was a time when 2020 seemed as far off as the idea of fly­ing cars, or turn­ing on a com­puter or press­ing a but­ton on your mo­bile phone and be­ing able to ac­cess in­for­ma­tion from lit­er­ally any­where in the world. But just like those in­no­va­tions (in­clud­ing fly­ing cars, as any­one who vis­ited Eti­salat’s stand at this year’s GITEX in Dubai can at­test), 2020 is just around the cor­ner.

But with tech­nol­ogy chang­ing at an ev­er­faster pace, 12 months is also a long time off. Yet Chris­tian Bar­tosch, as­so­ciate di­rec­tor at The Bos­ton Con­sult­ing Group Mid­dle East, says there are a few things we can ex­pect from tel­cos in 2020.

A big trend, Bar­tosch says, will be more ser­vices mov­ing to the cloud. “This will go be­yond con­trol ap­pli­ca­tions to in­clude data-heavy ap­pli­ca­tions, such as next gen­er­a­tion packet core for 5G. We will see the first pilot for de­liv­er­ing videos to mov­ing sub­scribers via pre­dic­tive con­tent buffer­ing at the net­work edge to en­hance cus­tomer ex­pe­ri­ence and re­duce load on the net­work. Such net­work ca­pa­bil­i­ties will be es­sen­tial to sup­port aug­mented and vir­tual re­al­ity use cases.”

Trans­la­tion: more aug­mented and vir­tual re­al­ity, more videos be­ing viewed on mo­bile de­vices, and greater de­mands on net­work ca­pac­ity – which Bar­tosch says the cloud will be able to help mit­i­gate.

“Pub­lic ser­vices will lever­age the new net­work ca­pa­bil­i­ties by im­ple­ment­ing aug­mented re­al­ity and vir­tual re­al­ity to cre­ate more im­mer­sive ex­pe­ri­ences,” he says.

“This in essence, will re­duce the need to visit pub­lic of­fices even fur­ther.”

Dol­lars in IoT and data

It’s com­mon knowl­edge busi­ness mod­els for tel­cos to make money must adapt to chang­ing tech­nolo­gies. Tareq Masar­weh, se­nior con­sul­tant for Europe, the Mid­dle East and Africa at Ovum, says 5G es­pe­cially could change things in the GCC re­gion – if the cus­tomer de­mand is there to jus­tify the ex­pense in build­ing the nec­es­sary in­fra­struc­ture.

“From a busi­ness per­spec­tive, 5G is the only mo­bile broad­band tech­nol­ogy that came be­fore its ac­tual need,” he says. But with enough re­gional tel­cos – such as Eti­salat, du, STC, Zain, and more – al­ready build­ing 5G in­fra­struc­ture, and oth­ers an­nounc­ing plans for 5G roll­out, he’s con­fi­dent the sheer in­vest­ment will cre­ate the cus­tomer de­mand, as it rep­re­sents a great leap for­ward in terms of speed and over­all tech­no­log­i­cal ca­pa­bil­ity.

Then there’s smart cities. “An­other key com­po­nent of most dig­i­tal strate­gies in the Mid­dle East are smart-city projects that are un­der way, es­pe­cially in the GCC,” says Masar­weh.

He adds: “Smart me­ter­ing, pub­lic sec­tor ini­tia­tives, road and safety, smart park­ing are few among many tech­nolo­gies that will spread from the GCC to the rest of the re­gion in the com­ing years.”

But with more smart cities projects, Masar­weh also high­lights the chal­lenges in­creas­ing data con­sump­tion – from ev­ery­thing from more In­ter­net of Things (IoT) de­vices, to more data be­ing col­lected, to con­sumers view­ing more, higher-res­o­lu­tion videos – will cre­ate. But, he adds, it will also mean busi­ness op­por­tu­ni­ties.

“The growth in data con­sump­tion will con­tinue to be the most sig­nif­i­cant mar­ket op­por­tu­nity for ser­vice providers in MEA un­til 2020, and po­ten­tially be­yond. The avail­abil­ity of af­ford­able smart­phones, data plans, and most im­por­tantly, rel­e­vant dig­i­tal ser­vices, will be among the fac­tors that de­ter­mine progress.”

Na­bil Ben Sous­sia, man­ag­ing di­rec­tor for IEC Tele­com Mid­dle East and Kaza­khstan, be­lieves IoT and data will be a big busi­ness op­por­tu­nity for tel­cos in 2020. “It will be very im­por­tant in all as­pects of life; it will bring real [time] data from ev­ery­where, from all sen­sors, smart al­go­rithms and AI to an­a­lyse and pro­pose op­ti­mi­sa­tion,” he says.

The fore­casts sup­port his view: ac­cord­ing to Statista, IoT could be worth as much as US$8.9 tril­lion world­wide by 2020. Erik Dud­man Nielsen, CEO of Vir­gin Mo­bile Mid­dle East and Africa, is one of many peo­ple who say it’s sim­ply too huge a fi­nan­cial op­por­tu­nity for tel­cos to pass up.

Be­yond tech­nol­ogy

But the telco of 2020 will be about more than tech­nol­ogy, Dud­man Nielsen says. A key driver of growth, he be­lieves, will be cus­tomer ex­pe­ri­ence. “In or­der to keep up in this ex­pe­ri­ence econ­omy, tel­cos must now put the cus­tomer in the cen­tre of ev­ery­thing they do and build their brand through build­ing com­pelling dig­i­tal propo­si­tions that meet cus­tomer needs and sim­plify and im­prove the ex­pe­ri­ence and re­la­tion­ship that cus­tomers have with their brand,” he says.

He adds this also means tel­cos may need to think long and hard about what ar­eas to fo­cus on – but not too long, since the pace of in­nova-

It is about be­ing cur­rent to the needs of your cus­tomers, not the in­dus­try or prod­uct.”

Erik Dud­man Nielsen, Vir­gin Mo­bile Mid­dle East and Africa CEO

tion is faster than ever be­fore. “The crit­i­cal suc­cess fac­tor for mo­bile op­er­a­tors will be in de­cid­ing what their role should be, a whole­sale model? Or a dig­i­tal nav­i­ga­tor mov­ing the tra­di­tional mind­set to an ag­ile dig­i­tal busi­ness model, which puts the cus­tomer at the cen­tre of ev­ery­thing they do,” he says.

“In ei­ther case op­er­a­tors will need to de­cide whether they of­fer ad­di­tional prod­ucts that add in­cre­men­tal rev­enue streams or whether they fo­cus on their core busi­ness.”

He adds: “With dig­i­tal brands, speed is cru­cial, and un­for­tu­nately a key chal­lenge fac­ing many tra­di­tional tel­cos is the abil­ity to move fast as there are chal­lenges with legacy tech­nol­ogy in­fra­struc­ture which can make dig­i­tal de­vel­op­ment dif­fi­cult for their core busi­ness. This is­sue, com­bined with com­pli­cated prod­uct, pric­ing and plan port­fo­lios, can of­ten re­duce the abil­ity of tel­cos to be ag­ile and meet shift­ing cus­tomer ex­pec­ta­tions.

“Mo­bile tele­com com­pa­nies face in­creas­ingly un­cer­tain times as dig­i­tal­i­sa­tion re­shapes con­sumer de­mand. The GCC re­gion has some of the top coun­tries in the world for dig­i­tal adop­tion, with more than 100% smart­phone pen­e­tra­tion and more than 70% so­cial me­dia adop­tion – even higher than the United States – so there is a def­i­nite de­mand for more dig­i­tal propo­si­tions in the re­gion.”

In the end, Dud­man Nielsen says, the suc­cess­ful telco of 2020 will be one that’s in­no­va­tive and doesn’t just em­brace dis­rup­tion, but cre­ates it. “In the MENA re­gion, young peo­ple are the fastest grow­ing seg­ment, with some 60% of the pop­u­la­tion aged un­der 25 years old, mak­ing this one of the most youth­ful re­gions in the world,” he says.

“This dig­i­tally-savvy, young pop­u­la­tion have soar­ing de­mands of the brands they in­ter­act with. [They] now mea­sure their dig­i­tal ex­pe­ri­ences against true dig­i­tal dis­rup­tors such as Net­flix, Uber and Airbnb. These are brands that op­er­ate with dig­i­tal in­no­va­tion at their core, and brands that have a re­lent­less fo­cus on the cus­tomer, not the com­pany.”

Dud­man Nielsen says it all comes down to a sim­ple thing if tel­cos want to not only sur­vive, but thrive in 2020 and be­yond. “It is about be­ing cur­rent to the needs of your cus­tomers, not the in­dus­try or prod­uct.”

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