Calling All Telecoms Firms In The Middle East

Regional telecom operators are grappling with new business models and growing competition. Enterprise provider SAP says it can help.



The Middle East is among the fastest growing IT markets in the world, with spending expected to exceed $32 billion in 2014, according to International Data Corporation (IDC).

A big chunk of that spending is coming from the public sector, especially in the GCC, where smart governance has become one of the key agendas for the future. Upcoming smart cities in the Gulf include the six economic cities in Saudi Arabia, three projects in Qatar – Lusail’s Smart and Sustainable City, Pearl-Qatar Island, and Energy City Qatar, and two projects in the UAE – Masdar City in Abu Dhabi and Smart City Dubai.

The “game changer”, spurring this growth, will be mobile, IDC’s report said. Mobile devices will increasingly be a “key facilitator” of electronic self-service transactions that regional governments will use to provide services, it added.

As mobility takes center-stage, the role of the regional telecoms industry has also come into the spotlight. While increased mobility is expected to make life easier for consumers in the region, the move has also put greater strain on telecoms operators and network providers.

The traditional role of telecoms companies has been to provide basic facilities to customers such as selling them phone airtime, SMS, MMS and a few value added services, explained Sherif Hamoudah, head of SAP’s Telecommunications Industry in MEA, Turkey and Pakistan.

“Today, a telco’s role is much more that that. Because of the competition they are facing for their main revenue streams, they are changing their business models. They are increasingly becoming a part of the ICT sector.”

Most regional operators, including Etisalat, du, STC and Ooredoo have been reporting stronger revenue growth from their data and internet segments.

Announcing UAE-based Etisalat’s 2013 results, Ahmad Abdulkarim Julfar, group CEO of the firm said: “For this company to continue to grow, we need to innovate and integrate new technologies to exceed our customers increasing demand and expectations.

“We still have a lot of work to do to build our capabilities and launch services in areas such as M2M, e-commerce, video and cloud services.”

To fill this gap in the market, enterprise provider SAP has begun ramping up its mobile services segment. Telecommunication is one of the four strategic industries that the company is currently focusing on. “That means we pool the resources, tools, people, money and we invest heavily in that industry,” said Hamoudah.

Partnering Regional Players

The company launched its mobility division in the region only last year, but has already signed agreements with Ooredoo, STC, Etisalat and Mobily. They are “significant” deals, said Hamoudah, without disclosing any financial details.

Two of those deals, including ones with STC and Etisalat, were signed during the recent Mobile World Congress (MWC) in Barcelona. Under the deal with STC, SAP will provide solutions for network life-cycle management (NLM) to enable more cost-effective operations.

“This will enable the company to markedly improve customer service as a result of increased end-to-end visibility for capital projects and assets, as well as enhanced project oversight and collaboration,” SAP said.

SAP solutions will also maintain the quality of STC’s IT infrastructure and will particularly help in reducing costs related to build and repair, and increase the productivity of field workers, it added.

“With SAP solutions, we can create close links between the logistical and financial sides of our network operations, integrating the entire spectrum of planning and realising tasks — from demand and supply planning to investment and project management, inventory management and asset accounting,” said Khalid bin Hussain Al-Bayari, senior vice president for Technology and Operations, STC.

SAP, which partnered with Etisalat last year to accelerate the deployment and adoption of Dubai’s Smart Government initiative, signed another deal with the UAE telco during MWC to deliver a range of enterprise mobility services to businesses in the country.

Under the partnership, Etisalat will build and offer cloud-based and on-premise mobility management solutions based on a mobility platform from SAP.

The solutions offer companies a lower entry cost, flexibility and scalability to any organisation, geography and usage model, said SAP.

The SAP platform is based on open standards and open source technologies, which makes it device and tools agnostic. It offers solutions for various sectors including the government and asset intensive industries such as oil and gas, logistics and warehousing.

“Our mobility solutions can be of considerable value to businesses of all sizes,” explained Hamoudah. “We want to help businesses exceed customer expectations, drive sales, boost loyalty and reduce operational costs.”

He also highlighted some of the trends that telecom operators should address in order to stay relevant and beat competition.

“Firstly, the rising use of smartphones and how hungry they are for bandwidth. Telcos need to provide infrastructure that scales with the demand, otherwise the customer could switch to another provider.

“Another trend is the explosion of big data in the telecoms industry. It is important to analyse the data and know what is it, how to learn from it and how to use it to help customers,” he said. “We have lots of solutions around big data including one that is centred around the customer experience and another that focuses on the social experience.”

Going ahead SAP has major plans for the region and is confident about increased opportunities. “It’s a growth market, it has a young population, has huge geographies and includes a lot of underserved societies,” stated Hamoudah.