The industry in transition

The Middle East’s telecommunications sector is in transition. With deregulation underway, both the incumbents and private players are gearing up to exploit new opportunities.

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By  Sarah Gain Published  August 21, 2005

|~|DEREGB---LEAD-PHOTO---satel.jpg|~||~|The telecommunications sector in the Middle East and North Africa (MENA) region has undergone significant development over the last few years, with the majority of the nations establishing independent regulators. In the ICT business, where technology is not a key differentiating factor, the price, service quality and overall customer experience, remain critical. All new players and incumbent operators need to ensure they are attracting and retaining customers.

The IT spending on the part of the region’s telcos is showing significant and sustained growth: “The deregulation process is driving [huge] investments on the part of telcos in the region. [Currently], they are investing in a range of technologies to help them cope with the more competitive market — upgrading their infrastructures, improving networks and streamlining business practices. It is certainly a time of major investments for the industry,” says Bashar Kilani, manager of IBM software business in the Middle East, Egypt and Pakistan.

The Telecoms Regulatory Authority (TRA) is currently working on draft licensing terms for the UAE telecommunications market, which will allow the private sector participation by the end of the year. In light of this, Etisalat is taking steps to position itself as a strong regional player and diversify its reliance on the domestic market when deregulation becomes a reality across the Middle East.

Etisalat intends to extend its telecoms investments in the MENA region with equity positions in the Kingdom of Saudi Arabia (KSA), Sudan and Zanzibar. The incumbent has also unveiled an international business unit, Etisalat International, which will spearhead its drive to capture foreign markets.

To further fortify its position, Etisalat is also making serious commitments to improving customer care, which it claims will be a key differentiator for the company. In a move that will help the operator strengthen relationships with leading telecom equipment vendors, Etisalat is allocating office space to the vendors at its Business Centres, allowing them to set up retail stands where customers can purchase UAELAB-approved equipment.

According to Mohammed Al Fahim, Etisalat’s executive vice president for marketing, “Customers enjoy the convenience of shopping for type-approved telecom equipment at locations where they conduct their business. The move is in keeping with our policy of complete customer satisfaction [and] since this will be a competitive environment, the customer will be the one to ultimately benefit.”

The incumbent has also invested in improved directory enquiry (DQ) systems to further strengthen its services. A new internet protocol (IP) telephony system from Avaya will enable the inquiries service to handle 150,000 calls a day and meet the growing demand of its rapidly expanding service centres while at the same time protecting 85% of its existing technology investment.

The new solution provides a complete communications infrastructure that will handle calls across all locations for Etisalat as well as provide the much-needed enhanced flexibility in managing DQ operations, greater reliability and a higher quality of service to its 3.9 million GSM subscribers. "We are committed to providing the best possible service to our customers,” says Mohamed Bamakhrama, general manager of the Etisalat Contact Centres.||**|||~|DEREGB---PHOTO-2---Al-Fahim.jpg|~|Al Fahim: We have a policy of utmost customer satisfaction and since this will be a competitive environment, the customer will be the one to ultimately benefit.|~|Oman Mobile has also deployed an end-to-end IP solution in order to develop and grow its services in the newly deregulated wireless marketplace. The Cisco solution includes the quality-of-service (QoS)- enabled IP converged network routers and switches, IP telephony systems and applications and wireless solutions. To Oman Mobile, the infrastructure is an example of how technology can best be utilised to improve operational efficiency and business performance.

According to Dr Amer Awadh Al-Rawas, managing director of Oman Mobile, competition has become a defining element of the country’s mobile phone market. “Any organisation looking to succeed in the [telecoms] industry must offer quality service, efficiency and new products tailored for specific customer segments,” he says, “The network backbone we have installed ensures that we will be able to cost-effectively and quickly scale our operations as the competition in the market demands and enable our employees to operate more efficiently.”

OmanTel is also reacting to the competitive pressure that deregulation has brought to Oman’s telecoms sector, in order to safeguard its leadership position. Having reduced calling rates and deploying a wireless local loop for the Sultanate, the operator has also deployed an advanced disaster recovery and business continuity infrastructure based on systems acquired from EMC.

The multi-site solution links all three OmanTel sites via a fibre connection. The upgrade means the operator’s core business applications can now failover automatically to different locations should an unplanned downtime occur, while a remote clustering software allows a transparent and seamless information transfer in case of system outages or power cuts.

“As a telecoms provider poised to welcome new entrants into the Oman market, we simply can’t afford to be without our key data – any outage could seriously damage our reputation and bottom line. We have been enhancing our competitive abilities, including OmanTel’s capacity to continue operating during power cuts and other unforeseen circumstances,” explains Mohammed bin Ali Al-Wohaibi, executive president of OmanTel.

When the TRA awards new licences, it sets down common requirements for eligible participants. It is then up to individual bidders to demonstrate their suitability in terms of technical compliance. According to Mohammed Ghafari, executive sales director for Lucent Technologies in the MEA region, the TRA is quite precise in its terms and conditions for successful bidders, and technical superiority is a key differentiator between competing operators.

“[The TRA] lays out the requirements for when the service should be available and it is strict on those demands because the whole purpose is to advance the country and the nation with choice and services. There is a minimum set of technical requirement that will ensure quality of service, but it is up to the operator to offer additional value add services. A robust infrastructure and applications allows operators to enjoy a significant enhancement on the quality of service and a recognisable improvement on their operational expenditure,” he says.

As a new player in Oman’s dynamic mobile market, Nawras required solutions to manage all aspects of customer service. The mobile operator, which launched commercial services in March, has deployed a range of Microsoft solutions, including a Microsoft Customer Care Framework (CCF), which enables it to connect new customers and manage a range of new services. The company simultaneously implemented seven different systems, which are designed specifically for telecom providers to help streamline their call centre operations.

The solution uses Microsoft .NET technology and web services architecture to unite the service, customer-facing website, billing systems and other applications onto a single system for Nawras’ customer service agents. “This solution will allow us to provide the highest level of customer service and satisfaction to our customers, providing us with real advantage over others in the market,” says Peter Rubeck, CTO of Nawras.||**|||~|DEREGB---PHOTO-3---Al-Rawas.jpg|~|Al-Rawas: Any organisation looking to succeed in the telecoms industry must offer quality service, efficiency and new products tailored for specific customer segments.|~|Microsoft is also helping other telcos to optimise their customer service. Thuraya has signed an agreement to migrate to Microsoft’s enterprise resource planning (ERP) business solutions suite, Great Plains, in order to gain greater control and visibility of its operations.

Under the agreement, Thuraya will use the new solution to manage sales orders, inventory, financial and human resource management and utilise the web-enabled capabilities to provide electronic transactions and communication platform between Thuraya and its partners across the world. In addition, Microsoft is also deploying its Share Point portal server in Thuraya’s offices worldwide.

Sultan Al Ghafli, executive manager of support services for Thuraya, recognises the role streamlined operations can play in attracting and keeping customers in an increasingly competitive market. “We want to provide our workforce with versatile technology solutions that manage their business needs. We need to be able to seamlessly manage our database, and ensure the security and reliability of our web and remote transactions, as well as that of our network,” he says.

Another player that is serious about exploiting opportunities created by deregulation is Vodafone Egypt. The company has invested approximately US$650,000 on its existing systems to ensure it is able to remain competitive and boost customer satisfaction.

By deploying a customer resource management (CRM) system, Vodafone Egypt, like other telcos in the region, is able to boost its drive for service quality. Building on BMC Software’s underlying platform for BMC’s Remedy application, the Action Request (AR) system, the organisation’s in-house team was able to create a specialised customer query and complaint application.

The updated installations have provided an easy way for Vodafone sales representatives to log problems in-store. The move has proved to be a turning point for the company in terms of service enhancement. John Woods, the regional manager for BMC’s service management business unit says, “I am convinced these applications have played a big part in the increasing number of subscribers Vodafone Egypt has.”||**|||~|DEREGB---PHOTO-6---Koponen-.jpg|~|Koponen: With the benefits of mobility beginning to be felt strongly by users throughout the region, non-voice data services such as picture and video messaging, e-mail and internet access represent a logical extension for telcos seeking new opportunities.|~|Telcos are under increasing pressure to strengthen their operations in order to meet customer demands. Vodafone Egypt has automated its business processes to offer greater efficiency. Prior to implementing the CRM solution, the company had to manage the logging and tracking of lost or faulty mobile phones manually at individual retail outlets.

As a result, Vodafone’s response times were slow, which had a negative impact on customer satisfaction, as many found themselves having to cope without mobile phones for long durations. As a result of the improved solution, Vodafone has achieved a turnaround in the quality of service, eliminating delays and reducing the response time to just two minutes.

The operator is planning to continue with its drive for market competitiveness by further improving communication with its customers. “As Vodafone matures through its IT phases it must ensure to weigh up all its customer services,” explains Abdelfattah Mabrouk, customer relationship management systems manager for Vodafone Egypt.

The overall customer experience is playing a crucial role for both incumbents and new entrants in the Middle East, but a further key differentiator in the race to attract and retain customers is the range of services operators are striving to provide. With the benefits of mobility beginning to be felt strongly by users throughout the region, non-voice data services such as picture and video messaging, e-mail and internet access represent a logical extension for telcos seeking new opportunities to capture regional market share.

In a bid to provide customers with access to advanced mobile services and expand its presence across Kuwait, Iraq, Tunisia and Algeria, Wataniya Telecom has launched the first national enhanced data rate for the GSM environment (EDGE) network.

Over 800,000 customers signed up as Wataniya migrated its customer base to a robust network. The move enhanced call quality and supported the rollout of a range of services, including m-commerce. “We set new standards for mobile services. Today, our customers are empowered with the best network quality, 100% coverage across Kuwait and a guarantee of an improved mobile experience,” says Harri Koponen, CEO of Wataniya Telecom.||**|||~|DEREGB---PHOTO-7---Khan-Zof.jpg|~|Khan: Regional operators will have to move into new spaces, offer more services and charge lower prices, if they want to exploit new opportunities.|~|Taking this evolution one step further than Wataniya, Etisalat and MTC Bahrain are already operating on third-generation (3G), universal mobile telecommunications standard (UMTS) infrastructures that permit high-quality video streaming, high-speed downloading and broadband internet access — benefits that are increasing the role of mobile phones in most enterprise operations. Although he admits it may take some time for this technology to take off, Colonel Ahmed Hamdan Bin Dalmook, CIO of Dubai Police, says 3G technologies will play a key role in law enforcement in the future.

“We are already seeing some members of the public use the video capabilities of their mobile phones to capture crimes taking place. When the technology is more widespread, the police may be able to utilise the more advanced features. For instance, a police officer could use his mobile phone to capture evidence of someone driving dangerously, and then send the video clip along with a ticket to the offender’s mobile phone, making the offence undeniable,” he suggests.

While the opportunity for such apps is still a considerable way in the future, operators such as Etisalat, Mobily, Q-Tel and MTC- Vodafone (Bahrain) are all pushing to further the usefulness of mobile phone technology, expressing interest in the possibility of high-speed downlink packet access (HSDPA) to boost network performance to optimise the user experience of 3G services.

While others in the market are in the inception phase, MTC, with Siemens Communications, is actively preparing for HSDPA to reinforce its competitive edge. The new deal will accelerate the mobile operator’s competitiveness in the marketplace by raising the standards of its existing 3G network to cater for more customers and to offer consumers the best possible quality voice and video transmission.

The network upgrade means MTC will be the first company to deploy the faster, higher-quality HSDPA technology. However, Wataniya Telecom is another company readying itself to exploit the opportunities created by liberalisation. Having joined forces with Nokia for the implementation of advanced technologies that would take the operator beyond 3G, Wataniya not only intends to update its EDGE infrastructure to 3G, but at the same time will further advance its systems to 3.5G technology.

The gap in the time of delivery for 3G and 3.5G is so small that it makes sense to go straight to the superior technology, according to Koponen, who is confident that HSDPA will remove all capacity bottlenecks and allow for the delivery of true broadband-type services that could be utilised by heavy data users and could even make the Dubai Police’s mobile law enforcement vision a reality. “Wataniya Telecom is going the extra mile to ensure its customers know they have a network they can rely on 24/7 for access services that will make their lives easier,” he enthuses.

Telcos around the region are already enjoying ROIs from their investments to replace legacy IT systems, seeing improved revenues, entering new markets, reducing costs from their value chain and getting better prices from their suppliers. Reflexively, the IT industry in the Middle East is also benefiting: As new entrants look to roll out new solutions and existing players revamp their IT infrastructures to strategically position themselves to take advantage of liberalisation, the demand for high-end technologies is growing exponentially.

The necessary yet challenging process of opening up the telecommunications sector also has more wide-reaching benefits. Local economies will benefit financially from the influx of foreign investments. Regional industries are already profiting from the opportunities for skills development.

Most significantly though, as Zoff Khan, director of strategic sales development, Middle East, Africa and Pakistan at Motorola surmises, in the deregulation game, the customers are the ultimate winners: “In a competitive and dynamic environment, regional operators, if they want to grow, they have to move into new spaces, offer more services, and charge lower prices. This can only be of benefit to consumers.” ||**||

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