Telecom operators 'reinventing business'
Dubai, August 2, 2010
Traditional voice and Internet access services, which for years constituted the telecom industry's foundation, are progressively becoming commodity businesses, said a study.
Non-traditional players, including social networking sites such as Facebook, Twitter, and YouTube as well as players like Apple and Google, are increasing their share of what used to be exclusively the telecom sector's revenue and continue to threaten long-held business and customer-relationship models, according to a new study by Booz & Company.
Fixed telecom operators continue to hold sway over a large, captive customer base and have unparalleled infrastructure and relatively significant investment capabilities.
Combined, these constitute a powerful array of assets that telecom providers can use to compete in the race to offer next-generation telecommunication services and applications. Owning the consumer relationship is an essential element of their sustainability.
"To protect that relationship, telecom operators are reinventing their home communication business - giving consumers the capacity to use services and applications that far transcend basic voice and Internet access services," Booz & Company partner Karim Sabbagh was quoted as saying in our sister publication, the Gulf Daily News.
Customers' growing sophistication, coupled with device and network convergence, has transformed demand for communication services and applications in the home. Plain connectivity has given way to numerous multimedia applications and customers want high-quality, fully integrated services with ubiquitous access that covers their telecommunications, information, and entertainment needs.
The number of global broadband subscribers has been rising steadily and significantly and in some markets, broadband subscribers are not just looking for fast Internet; they also want the ability to run multimedia applications and value-added services.
"The rapid emergence of increasingly powerful digital devices is also contributing to global consumer sophistication, including in the Middle East and North Africa (Mena) region, producing a significant shift in consumer behaviour towards adoption of digital content," said Booz & Company principal Hadi Raad said.
This shift is evident in behavioural insights about customers in accessing the digital content. The Twitter community in the region grew by almost 300 per cent during the first six months of 2009 with 61pc of social networkers updating their Twitter status at least twice a day and 80pc of them accessing Twitter through a mobile device.
There are 10 million active Facebook users in the Mena region.
In countries like the UAE, Jordan, and Lebanon, more than 40 per cent of the online population uses Facebook.
Regional broadband growth has been strong and will sustain its pace. According to one forecast, there will be 22 million fixed broadband telecom connections in the Mena region by 2014, representing a household penetration rate of almost 32 per cent.
Interactivity of video and entertainment applications is now a must, says the study.
This is causing a vital transformation in telecom home offerings.
This marks a substantive change for the consumer, who used to passively receive and use services, but now is empowered at home with interactive multimedia and seamless fixed-mobile convergence applications.
Multimedia applications have been stoking demand for high bandwidth and likely will continue to do so. Bundles of bandwidth-hungry applications could drive demand for tens of megabits per second (Mbps) in next-generation homes.
Telecom operators are recognising the content and application space as a source of future revenue growth. – TradeArabia News Service