Banking on trust

Telecom operators should leverage their existing assets, including their customer base, to profit from a growing demand for data management

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By  Roger Field Published  April 8, 2009

While many telecom operators in the MENA region are often accused of exhibiting a siege mentality in the face of rising competition from rival players and new technologies, they are in fact ideally placed to grow their business and enter new sectors.

Indeed, for industry insiders who take a more optimistic approach, the main challenge facing telecom operators is an over abundance of opportunities, rather than threats such as Voice over Internet Protocol and falling ARPU.

This was certainly the view of ICT experts speaking at EMC Corp’s Telecoms Summit for the Middle East, North West Africa and Turkey, held in Istanbul last week.

The event served to highlight the many opportunities open to operators prepared to look beyond their traditional operations and consider the fast growing areas of data management and cloud computing.

Indeed, telecom operators are ideally placed to benefit from a burgeoning demand for content backup and management from consumers and businesses, according to Chuck Hollis, global marketing CTO with EMC.

“It is just a minor extension of their existing business model, they have the network, they have the billing relationship and in many cases they have the trust of the customer,” Hollis told CommsMEA.

“A lot of it is to do with self perception. So many people in telecommunications think of themselves as the ‘network and device people’ as oppose to seeing the value of moving information.”

Hollis compared the position of telecom operators to that of banks a century ago. Just as banks transformed themselves from “buildings with vaults in” to become financial services companies, so telecom operators must shift their business models to offer more sophisticated services such as content storage and management.

By making this transition, operators stand to benefit from greater customer retention and new revenue streams, as end users are far less likely to switch from an operator which they have entrusted with personal data. “It’s a very sticky relationship,” Hollis said.

“We are advising telecom companies to start establishing trust relationships and trust brands rather than just cool technologies. Banks market on trust and if you don’t trust them you won’t give them your money. If you don’t trust a telecoms company, you are not going to give them your information.”

Similarly, telecom operators are also well placed to profit from the growing trend of cloud computing, which can offer companies greater convenience and security for their IT. With businesses increasingly recognising the benefits of moving their computing applications and data to remote servers, or ‘clouds’, telecom operators could work with their partners to offer corporate customers this type of service.

“The big theme here is to change IT from something you by to something you rent, and as long as service providers and telecom operators realise this trend in the industry then they will do just fine,” Hollis said.

Whatever challenges telecom operators face, it seems a lack of opportunities is not one of them.

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