Calling IT

Competition is no longer a distant threat for many telecommunications operators in the Middle East as liberalisation is sweeping the region. As a result, incumbent operators need to bring greater efficiencies to their operations and understand their customer needs more effectively. As such, many are turning to information technology.

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By  Maddy Reddy Published  August 26, 2004

|~|Lucy_norton_pic111111.jpg|~|Lucy Norton, telecom analyst for the Middle East market at WMRC.|~|The telecommunications sector in the Middle East & North Africa (MENA) region has undergone significant development over the last few years. The majority of the region’s countries have set up an independent regulator, and awarded a second GSM licence. As a result, mobile penetration has increased sharply and is now overtaking fixed-line penetration in a number of countries. GSM subscriber numbers are expected to grow by 34.3% by 2005, according to the EMC world cellular database. It also forecasts that there will be 69.8 million GSM subscribers by 2005, against 51.9 million subscribers in 2004. Locally, the number of subscribers is also set to rise following the launch of the region’s first 3G network by MTC-Vodafone Bahrain and one in the UAE by Etisalat. Q-Tel will launch 3G in Qatar next year and EMC predicts that 38,500 subscribers will sign up for 3G by the end of the year. The Middle East telecom environment varies in terms of progress on liberalisation, regulatory independence and technology supply. However, the growth is advanced and penetration levels and pace of competition are increasingly significant. More than 20 new telecom operators want to secure a significant percentage of the newly deregulated market. These operators are willing to pump in billions of dollars into building the required telecom and IT infrastructures. “The telcos are a major consumer of enterprise IT. The more telecom players that operate in the region, the better the news for IT vendors. These companies will need IT systems, [which means] there will be an increase in the adoption of IT in the coming [years],” says Jawad Abbasi, president of Arab Advisors. The aggressive IT spending by regional operators is in line with global spending patterns. The Telecommunications Industry Association (TIA) says operators will have to inject cash into building broadband services, telecom support services, maintenance, network equipment, wireless gear and internet protocol (IP). They will also have to spend money on hardware such as routers, voice-mail and video-conferencing equipment. EMC puts global telecoms IT spend, excluding the US, at US$1.5 trillion for 2004, up 10.3 % from 2003. It also predicts that this figure will reach US$2 trillion by 2007, growing at an anual compound rate of 10.5%. The deregulation of the telecom market and the success of mobile voice in the MENA region mean both new players and incumbent operators need to ensure they are attracting and retaining customers. As such, applications such as billing, customer relationship management (CRM) and efficient call centre operations are high on the agenda of IT managers at telecom operators. “The incumbent operators, seeing the immediate or the impending prospects of competition, are faced with two key issues: how do we hang on to the existing customers and how do we reduce our costs? They are also trying to integrate their existing IT infrastructure into new ones. The companies are also looking at consolidation, centralised functions, managed services and outsourcing,” says Gerard Newman, partner, business consulting services (BCS) at IBM Middle East. “In terms of IT spending by the MENA telcos, there will be a notable increase in billing. In the mobile market, systems that enable operators to offer customers a range of tariff plans and payment options will form a key part of their CRM strategies. Considering that these markets are prepaid-dominated, convergent mediation platforms that allow for real-time payment for higher value services by these ‘less managed’ customers will be crucial to generating returns from more advanced data services,” adds Lucy Norton, telecom analyst for the Middle East market at WMRC. In Saudi Arabia, Saudi Telecoms Company (STC) has already started to address its service-oriented systems ahead of Etisalat’s arrival in the Kingdom next year. The incumbent has invested in a Tibco-based realtime payment system (RTPS), from MENA eSolutions, which allows customers to pay their phone bills at any Al Rajhi bank and have their account status updated in 1.8 seconds. The RTPS facilitates integration between Al Rahji’s delivery channels, including its 378 branches and 770 ATM machines, interactive voice response (IVR) service, the internet and wireless application protocol (WAP) offering. It ensures bills are paid without delay. With 30,000 customers now utilising the service each day since it went live in 2003, the company has seen a 100% increase in STC money moving through its systems each month. “STC was faced with the problem of disconnecting between 30,000 to 50,000 users per month due to non-payment of bills. We discovered that many of these users were paying their bills at the last minute and consequently being disconnected due to the slow 24 -hour transaction turn-around time,” explains Suleiman Al Othman, head of billing systems at STC. “The RTPS system has clearly taken care of our problem. It allows customer payments to flow from the bank to its billing system in seconds, rather than waiting for 24 hours before the banks send payment details via batch files. Furthermore, if a customer has been disconnected, the RTPS automatically reactivates his or her service the moment the payment is made,” he says. ||**|||~|BERNARD.jpg|~|Ben Barnard, telcocom industry solution manager at Sun Microsystems. |~|Telecom Egypt is also ramping up its customer services ahead of market liberalisation. The operator is currently implementing the region’s largest ever national automated directory assistance (DA) service and the project is expected to be complete in 2006. The fixed line operator is working with Logic Tree to provide the voice automation platform. The vendor’s Tree’s Vox Linx platform will be implemented at Telecom Egypt’s call centres in Cairo and Alexandria and provide the necessary voice automation. BTS Logic, a division of Logic Tree, will provide the DA system and search engine, while Ericcson will provide the switching hardware and call centre software. UniTel, Telecom Egypt’s primary contractor for the project, expects the service to go live early next year and the automated speech application platform, which can handle tens and thousands of calls every day, promises to save the operator millions of dollars in customer support costs. “This deployment will be the largest automated directory assistance system in the Middle East,” says Fred Korangy, chief executive officer of Logic Tree. “With this win we will become the largest provider of directory assistance systems in the Arabic-speaking world,” he adds. Elsewhere in Jordan, which is already one of the region’s most competitive cellular markets, operators are working on their infrastructure. The move is seen as a positive step by information management vendor EMC. “Telcos have the fastest growth in information, the highest demand for flexibility and the highest requirement for changes. A few of these companies cannot compete because they don’t have a long enough night to do a backup or cannot analyse their call record information. Information infrastructure is directly related to launching new services in the market place,” says Leo Miklas, regional country manager, EMC. Looking ahead, EMC has also convinced MobileCom, a subsidiary of Jordan Telecom, to manage its information infrastructure. The consolidated storage solution, which will form the basis of the GSM provider’s total business continuity strategy, runs on the vendor’s Symmetrix DMX systems. The first phase of the roll out includes the implementation of a multi-terabyte storage area network (SAN) to protect and manage all of MobileCom’s business-critical data, including customer records and financial information. MobileCom also plans to implement a remote disaster recovery (DR) site to protect its data, should any unplanned downtime occur. “Since the launch three years ago, subscriber levels have dramatically increased. In line with this growth, we now generate a huge amount of data — ranging from billing details to business intelligence. In a competitive sector, such as Jordan’s GSM market, we have to ensure that our customers are given the best possible service, [which means] we can not afford to have any unplanned downtime,” says Mickael Ghossein, chief executive officer, MobileCom. On the operational side, the Jordanian operator recently completed the roll out of Microsoft’s Enterprise Project Management (EPM) to facilitate collaborative work. The implementation allows MobileCom’s 400 plus staff members to have an on-demand projects dashboard that will enable monitoring at enterprise, as well as individual, project levels. It also gives project managers the transparency required to make informed decisions, optimise resource management and ensure organisation-wide collaboration. The management reporting features provide greater visibility into staff skills and availability and realtime status of tasks and resources. The EPM now allows the management to track histories, as well as the progress of projects across the organisation through customised reports. While the actual ROI of MobileCom’s IT investment, and that of the other telecommunications operators in the region, will only become apparent over time, the short term outlook is one of increased IT spending within the Middle East. However, this relentless investment is expected to eventually slow down once operators have a mature infrastructure and their key value add services are in place. Once this happens, technology will no longer be a differentiator, according to Ben Barnard, telcocom industry solution manager at Sun Microsystems. “IT will not provide an advantage to any of the providers. The sad truth is that anyone can buy any technology and no technology will give a sustainable competitive advantage because that same vendor will go to the competitors and sell the same solution. At the end of the day, everyone will be in the same position,” he says. Arab Advisor’s Abbasi has a similar opinion. He says it finally boils down to what the customer expects, and not necessarily what technology the operator has invested in. “What starts off as a competitive tool by one operator to gain market share becomes a commodity over a period of five to six years. Without it, customers won’t consider the operator. In the telco business, price, the service quality and the over all customer experience is critical,” he adds.||**||

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