MidEast telcos mull alliance to fight socials

Common media platform touted as answer in battle against Facebook et al

Tags: BahrainUnited Arab Emirates
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MidEast telcos mull alliance to fight socials Social media networks such as Facebook take the majority of revenues from increased data traffic. (Getty Images)
By  Stephen McBride Published  September 27, 2012

A cabal of Middle East telecoms companies is exploring the creation of a pan-Arab online platform, to counter the low margins telcos endure despite increased data traffic on their networks, Reuters reports.

While the scale of the proposal may lead to difficulties with implementation some argue that language and culture alignment across the region together with the webs of GCC-owned affiliates across MENA, could yield success.

"A single operator, even one in multiple geographies and with tens of millions of subscribers, can't create this platform on its own," said Osman Sultan, chief executive of du, the second biggest operator in the UAE.

"It would be restricted to the customers of this operator and wouldn't have sufficient scale to succeed. But a unified platform spanning the Arab world would," he told Reuters.

Sultan said he floated the idea to all major operators in the Arab world over the past year as a means to reap greater rewards from the heavy investments the providers have made in their infrastructures.

Over-the-top (OTT) Internet companies such as Facebook, Google, Apple and Twitter take most of the revenues generated through increased traffic. Telcos have thus far met with little success when trying to convince these businesses to invest in the physical networks that deliver these rewards.

"OTT players...we can't share their gain and they won't share our pain," said Sultan. "Network traffic doubles every eight to nine months, but revenue is heading to a plateau, so we need to claim part of the new revenues alongside OTT players."

Content and services on the new platform would include social media and online shopping for goods and services, including digital content such as music, video and applications, Sultan said.

While operators are tight-lipped on the details of the platform and how it would be implemented, some have expressed enthusiasm for the idea.

"Telcos are beginning to look to the deployment of OTT services such as streamed TV and video-on-demand," said Sheikh Mohamed Al Khalifa, chief executive of Bahrain Telecommunications Co. "Such diversification [into] adjacent industries has become necessary. There are gains to be made by collaborating within our industry in the Middle East."

2180 days ago
master of the internet

this is complete wishful thinking. The internet is of value because of the OTT. If they didn't exist, there would be no requirement to have faster and faster internet connections. The OTT are not setting the prices for internet connections, the telco's are. So why are you complaining? OTT make your service valuable, price it accordingly, don't complain about the OTTs because of a mistake you did.

2180 days ago
Vinod Mehra

Its imperative that Teleco's work along the benefits of consumers rather than against the consumers. And in this regards Teleco's should look forward to creating innovative platform revenue streams and not depend on one platform streams.

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