Compete to survive, telcos told

Telco operators in the Middle East will need to become increasingly competitive to survive as the market liberalises, senior executives in the industry warned at last week’s Telecoms World Middle East conference.

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By  Michele Howe Published  December 17, 2006

Telco operators in the Middle East will need to become increasingly competitive to survive as the market liberalises, senior executives in the industry warned at last week’s Telecoms World Middle East conference. “In the Middle East and North Africa, we see that in the majority of countries mobile operators are already facing significant competition and the challenge to grow in a saturated market,” said Hans van den Broeck, senior vice president at Siemens, who added that this complexity is expected to increase over the next two years. “Reaction to the market is very important, you have to be able to quickly react to competitors’ actions,” he explained. “What does it mean to be competitive here? It means to continuously innovate, to bring new products and services to the market — products and services that will have a shorter life cycle — and to not depend on one single service that is going to deliver you the financial performance,” he continued. Extension of service provision will become more and more necessary, he added. “The biggest impact on complexity is extending the value chain for telco operators. In order to bring non-voice services, you have to extend both supporting and core function in the value chain. You have to decide if to cover new functions — for example service creation, distribution — yourself, or with partners,” van den Broeck said. Shared service provision is something telco operators need to start looking at more closely, agreed Raghu Venkataraman, executive vice president of Corporate Strategy and Strategic Mar-ket at new UAE telco operator du, also speaking at the event. “What I believe telco operators should be doing is paying more attention to shared services and shared service prov- iders,” said Venkataraman, who added that about 90% of services did not make money. “I am not saying [operators] should stop doing services but they should approach them through a partnership,” he stated.

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