Profiting from convergence

Last week’s Quad Play conference, which took place at the Etisalat Academy in Dubai, offered a valuable insight into the opportunities available for telecom operators willing to seize the potential of fixed-mobile convergence and IP technology

Tags: Emirates Telecommunications CorporationUnited Arab Emirates
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By  Roger Field Published  May 20, 2009

Last week’s Quad Play conference, which took place at the Etisalat Academy in Dubai, offered a valuable insight into the opportunities available for telecom operators willing to seize the potential of fixed-mobile convergence and IP technology.

But behind the optimism of the speakers at the conference, the event also served as a sobering warning shot to some of the region’s operators that remain entrenched in an older mode of thinking, where competition means little more than attempting to compete on the price of calls.

While few operators in the Middle East and Africa have launched triple play or quad packages, which typically offer customers a bundle consisting of fixed and mobile voice, internet and IPTV, the key message from speakers at the event was that operators need to start moving in the direction of quad play, and fast.

The problem at the moment is that too many operators are heavily reliant on revenue from services that are increasingly commoditised, such as plain mobile voice and international calls. The danger is that as competition increases, operators will be forced to cut calling costs to unsustainable levels.

The Quad Play conference gave operators in the region a glimpse of how they can fundamentally shift their business model to enable them to compete on innovative services, rather than just price.

By bringing together fixed line, mobile, internet and IPTV, operators can offer their customers a range of tailored services and leverage the latest technologies to offer far greater levels of convenience than most people are accustomed to.

For example, one speaker at the event pointed to a service that allows mobile calls to switch seamlessly from a mobile tariff to a fixed line tariff as users enter their home, and to another service that enables incoming calls register simultaneously on a user’s mobile phone, fixed line and PC phone.

For many of the speakers at the event, including Edmond Osstyn, a strategic marketing director at Alcatel Lucent, a VoIP or PC calling service is also important for triple play and quad play customers, and can also give operators a chance to offer customers an attractive package. He pointed to the example of BT Group in the UK, which launched its own VoIP service back in 2004 as part of a triple play package.

The service, which was free for triple play customers, was instrumental in allowing the company to attract 2 million triple play customers within the first nine months of launching the bundle.

But perhaps the most basic benefit of bundled services for operators is that it tends to increase customer retention, mainly because a customer who relies on one operator for their mobile, fixed line, internet and TV as part of a package is far less likely to go through the hassle of switching to another provider.

Bundles also offer operators the scope to offer innovative pricing packages, tailored to different groups with widely varying needs, while the ability to offer customers add-on services can also help revive ARPU.

But while the technology required for some components of quad play, such as IPTV, is still lacking throughout much of the Middle East, operators should still be pushing themselves in the right direction by offering a greater level of converged services, including VoIP.

It remains to be seen whether operators in the region will heed the important messages from the conference, but as delegates at the event made clear, quad play brings a huge first mover advantage, and operators that are slow to move could lose a significant slice of their customer base to their rivals.

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