Increasing the footprint in Africa
Ahmad Abdulkarim Julfar, Etisalat Group's chief executive officer talks OTTs and challenges in the region
Operators in the Middle East and Africa region are facing common challenges and Etisalat Group is no exception. According to Ahmad Abdulkarim Julfar, Etisalat Group's chief executive officer, the relationship with Over The Top players (OTTs) is the main challenge for telcos in the region.
"In the past, we [operators] were blaming them [OTTs] for something and they were blaming us for something, only in the last couple of years we started to discuss how to collaborate," he told ITP.net's sister site, CommsMEA.
Julfar said this challenge is one of the key areas in which Etisalat has been focused in the last year. "I think that internet companies bring value to the ecosystem. Also the mobile operators and the telcos bring value. Each side needs to benefit proportionally. This is one of the common challenges across all the 19 countries," he added.
"Today the scenario has changed. The mobile operator has not got as much money as before, there is a big pressure on prices, the margin has gone down and growth is not as much as before. They need to be more collaborative and promote a value creating initiative for the whole sector, the whole ecosystem," Julfar noted.
Etisalat has already partnered with Google in order to improve its OTT strategy. Julfar said that Etisalat is maintaining talks with international OTTs and the company will make announcements next year.
This is not the only challenge that operators must overcome. Julfar calls for a change in the government's strategy in the region to promote the telecom sector. "When they [governments] establish this [telecom sector/operators licenses] 20 years ago, their main objective was to improve competition, to improve penetration of the market and to increase the coverage. I think that most countries have achieved it. Now they have to change their thinking."
He commented that countries are introducing pressure on prices, especially in some markets where there are more than three operators. He pointed out that the US and Europe have reached consolidation and he expects this to happen in some of the MEA countries. "Here there are very small markets and there are four or five players and this is not in the interest of anyone. When the revenue goes down, net profits go down too. Nobody is going to be encouraged to invest in the market," he added.
Apart from the shared challenges that Etisalat Group is facing along with the rest of the operators in the MEA region, each of its 19 domestic markets face different issues.
"We have specific challenges from market to market. In some markets, it is over taxation from the governments and in other markets it is the lack of infrastructure. In other markets we also face, what we call the ‘lack of long term visibility about the sector'. We have 2G in some markets, in other markets we have 4G and we are thinking about 5G. If most markets had 3G and some 4G, it will be acceptable and reasonable. However, in the MEA region we have markets with 2G and others thinking about 5G. There is a big variation in the whole market," he said.
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