Gathering momentum

Consolidation and broadband expansion will be defining trends in the telco sector in 2011

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Gathering momentum Operators now appear to be well positioned to benefit from many of the investments they have made in the past 12 months.
By  Roger Field Published  January 4, 2011

From talking to industry experts from across the telecoms sector, it is clear that 2011 is set to bring significant change to the region's telco industry, with many of the innovations and trends seen in 2010 gathering further momentum and moving into the mainstream.

Most analysts and industry insiders believe that consolidation in the operator space, particularly in Africa, is inevitable, with chronically low ARPU and increased competition - much of it stemming from the entry of Bharti Airtel - pushing smaller or less competitive players over the edge.

Such consolidation will inevitably weed out less efficient players, and will see the best operators spread their influence further in a process that should benefit end-users most.

2010 saw huge strides in the broadband arena, with fibre and mobile broadband deployments bringing a new level of data services to people in the region.

Many operators in the region, including Etisalat, Mobily and Cell C rolled out HSPA+ networks, while FTTH deployments also gathered momentum.

The demand for this infrastructure is being driven by a seemingly insatiable appetite for data services, and 2010 also gave an indication of some of the shifting consumer habits that could shape 2011.

The launch of Apple's iPad at the start of 2010 was a game changer in the personal computing sector and led to a revival of the tablet. While smartphones - and particularly touch screen devices - have been credited with creating a surge in wireless data traffic, tablets could take the trend a step further in the coming years.

While smartphones might be fine for browsing and watching video clips, tablets open up the possibility for more bandwidth hungry usage, such as streaming entire films over the web.

While it might be some years before tablets become as widespread as smartphones, the devices appear to be part of a broader trend that indicates the sheer demand for access to data services anywhere and at any time.

Similarly, fixed networks are also seeing an upsurge in data demand, with IPTV and video-on-demand among a new breed of services that will require FTTH to work in metropolitan areas.

While operators are busy upgrading their networks for these types of services, other telcos and consortiums are also deploying the international backhaul infrastructure necessary to transmit vast amounts of data around the world, and the past couple of months have seen some notable developments in this area.

In December, Orange Group announced that the IMEWE cable went live. The submarine cable project, which involved a consortium including Orange, Bharti Airtel, Etisalat and STC, connects the Middle East with India and Europe.

Meanwhile, another cable project, known as RCN, which is backed by operators including Turkcell, Mobily and Etisalat, will offer an overland cable connection between the Middle East and Europe.

While telcos in the region may be facing a decline in mobile and fixed voice ARPU, it is reassuring that huge investments are being made in the infrastructure that will allow telcos to offer a new breed of bandwidth-hungry apps, at home and on the move. 

These data applications will not only allow end-users to access the kind of services they want to use, but will also offer telcos an opportunity to tap important new revenue streams - and 2011 could well be the year that some of these services come to the fore.

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