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Broadband and quality of service in the Middle East: new challenges for telecoms players

Broadband and quality of service in the Middle East: new challenges for telecoms players

A.Dali Compression WebThe telecommunications market in the Gulf Region still offers excellent growth potential, although the local markets are very contrasting in terms of competition and maturity. We find record mobile penetration rates of 200% in saturated markets such as Saudi Arabia and Qatar alongside fast-growing markets like Yemen (56% penetration) and Pakistan which is developing its telecoms infrastructures to drive nationwide socio-economic growth.

In this part of the world, as elsewhere, digital technologies – including very broadband networks – are employed to leverage economic development. Telcos are adapting their business models to respond to consumer aspirations and to stay ahead of the competition.

Three questions for Abdelkader Dali, Sales Director, Sofrecom Middle-East
  1. Almost all Mid-Eastern countries have deployed or are deploying broadband and very broadband networks, notably cellular ones. How do you see the broadband challenge facing operators today?

  2. Several factors have triggered the race to high bandwidth we are seeing in developed countries such as Saudi Arabia, Qatar and the United Arab Emirates and even in emerging economies like Yemen, Pakistan and Lebanon.

    First of all, the level of maturity reached in some countries in this region reflects the increasing adoption of high-speed mobile devices such as smartphones and the immense appeal of mobile content and services, notably bandwidth-greedy videos. Network capacity must be adapted to handle the exponential increase in data traffic engendered by these new usages; in fact, today's content offers would not be possible without massive national infrastructures.

    Secondly, developed and developing countries across this region are eager to create e-government services for citizens and business. These too require high-speed networks.

    Finally, the population of the region is predominantly young and technophile. To satisfy these receptive yet demanding consumers, operators must propose compelling, innovative content services, especially entertainment. In the Gulf Region for example, we are seeing an explosion in demand for original, Arabic language mobile content.

    The challenge for operators is therefore to build and exploit broadband networks able to satisfy this demand and to develop their own content in order to avoid becoming a simple "dump pipe".

    Broadband networks – fixed and above all cellular – accelerate the development of apps and content offers for increasingly connected users who appreciate mobile Internet in particular. Indeed, Internet access in the Middle East today is predominantly via mobile devices. Further, broadband networks change the telecoms ecosystem by attracting new, so-called OTT (Over The Top) players like YouTube and WhatsApp/Viber who build a close, direct relationship with customers who formerly could "see" only their telecom operator.

    Governments and all NICT (New Information and Communication Technologies) players face considerable challenges. To take just one example, the government of Dubai has asked its Departments to ensure that all online citizen services be operational by 2016.

    Telcos must strive to win new customers and make the most valuable ones loyal by launching high value-added broadband-based services. Additionally – and this is a big change for them – they must learn to evolve in this new ecosystem and rethink their customer relationship in order to counter the increasing influence of OTTs.

  3. Do broadband networks impact telcos' quality of service?

  4. Network infrastructures and information systems help to guarantee quality of service and enhance the customer experience; in fact, they are indispensable. Consumer loyalty depends heavily on technical and commercial quality of service.

    Taking the very simple example of someone on the move watching a video or TV on his tablet or phone, a common practice nowadays, there is nothing more irritating than a degraded or pixelized image. The effect on the perceived quality is immediate and very negative. Consumers are not tied to their operator; in particular, the vast majority of prepay customers are free to switch immediately to a different provider if they are dissatisfied.

    Not surprisingly, customer loyalty and profitability are prime concerns for Middle Eastern operators. They want to satisfy demand for innovative content and value-added services and thereby generate new revenue streams; they want to increase mobile data traffic, and be able to manage it under optimal conditions; they want to improve their operational efficiency to ensure an impeccable customer experience. Controlled quality of service also reduces churn and the number of customer service calls, all of which improves the financial bottom line.

    For these reasons they are deploying broadband networks, especially mobile ones (including LTE - Long Term Evolution), to be able to launch new, differentiating services and build subscriber loyalty.

    In short, the future growth of Middle Eastern operators will depend on their success in improving two key parameters: network quality and performance, and the customer experience.

  5. How can Sofrecom support operators in their transition to broadband?

  6. On mature markets in this region, operators have invested massively in fixed and mobile very broadband networks, in particular FTTx (optical "Fiber To The x ..."), but often without having defined medium- and long-term business models. What's most important, they believe, is to be the first to do this and to publicize the fact! The result is underexploited infrastructures and no clear content strategy, even though this has become the key to expanding the subscriber base.

    Network infrastructure and IT solutions are Sofrecom's traditional areas of expertise, with the additional advantage of having access to Orange Group's experience, particularly on optical network installation and management.

    At a technical level, our experts are able to design networks or evaluate existing ones to find optimization possibilities, notably as part of their migration to broadband. We also have the experience needed to oversee vendors and subcontractors, and to help operators manage network quality of service from the backbone all the way to the customer's connection. We offer comprehensive, personalized support along the operator's entire value chain.

    From a sales and marketing point of view, our experience allows us to define innovative content strategies well adapted to the local ecosystem. We analyze market trends and identify our customers' strengths, then transform these into competitive advantages. We suggest new services to make their portfolio of offers more appealing. The objective is always to develop the value proposal, to sell rich and original content such as IP television with VOD (Video on Demand) platforms accessible from mobile devices. Operators have understood that mobile content services, video in particular, are a formidable way of winning new customers. By developing paid content and services, we help operators capture revenues now migrating from voice to data.

    In all Middle Eastern economies, regardless of their present level of development, very broadband networks have become in just a few years veritable springboards for innovation.

    They open up growth opportunities that can be seized – with Sofrecom's help.

    Please contact for more information.