6 Sep 2013

Customer centric and personalised experiences will drive the next level of growth for operators in the Middle East

Written by Yves Kammerer,
Business Development Director,
Research shows that in developed markets, the revenue mix is changing in line with the evolution of consumer behaviour, and the greatest growth opportunity will come from mobile handset data. Industry drivers such as competition, deregulation, and technology advances are forcing telecommunications companies to reorganise around their customers, expand markets, and upgrade infrastructure.

For emerging markets, telecoms operators will continue to benefit from the growth of mobile penetration and rising GDP per capita that will increase telecoms service spending. Improved mobile connectivity will also stimulate usage of data services, but mobile voice will remain predominant (45% share of total retail revenue in 2017) because fixed infrastructure will continue to be poor.

Room for data revenue growth does exist within emerging markets as a result of there being a high number of un-served customers representing an untapped opportunity and with a significant appetite for mobile data. What is interesting is how this trend is manifesting itself in the Middle East. The mobile telecoms market in the Middle East continues to show signs of growth and in particular the increased use of smartphones and mobile broadband.

According to data from GSMA, overall annual growth in mobile broadband connections in the region fell from 101% in 2011 to 61% in 2012, but levels of mobile broadband penetration (as a percentage of total connections) in some Middle Eastern countries are now eclipsing their Western counterparts.

Furthermore, the region now has 17 LTE networks spread across eight countries, which provides tremendous growth opportunities for those operators that can capitalize on being 4G ready and equipped to serve their consumers (I will come back to this in my next blog).

Turkey was cited as ‘the most advanced market in the region’, where mobile broadband networks account for 59%, United Arab Emirates (55%) and Saudi Arabia (54%). In contrast, the average for Southern Europe stands at just 45%, while Western Europe has about half its connections on mobile broadband networks and in Northern Europe around three in five connections are mobile broadband.

One identified game changer for operators in the Middle East has to be to focus on the customer experience. You would assume that in order to maximise your market share and dominate the competition the logical starting point would be to ensure a consistently positive experience for your customers. But with market conditions as complex as they are in the Middle East, this is harder than you think to navigate.

Senior Telecom Analyst Hasan Sandila, IDC Middle East, Africa, and Turkey, stresses that because operators in the Middle East are finding it hard to differentiate their offerings from one another they are likely to focus on innovation and market diversification (and areas not core to their business). We believe that putting customer experience management at the heart of this innovation and diversification is also crucial to future successes.

Gartner sums up customer experience management pretty well in their definition: “the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.”

A good example of early signs of this in the Middle East region, again highlighted by GSMA is from Turk Telecom. On its Q1 2013 Investor Call, the operator’s Chief Marketing Officer Dehsan Erturk stated that “…mobile data revenue is the backbone of our revenue growth. Data revenue now constitutes 14% of total service revenues with a (traffic) growth of 55% on year-over-year basis thanks to smartphone campaigns and unique internet packages, addressing different customer segment users, various device types and data bundles.”

The operator ran 40 separate smartphone marketing campaigns during 2012 and had 12 smartphones in its portfolio that were exclusive to Avea, including its own-branded Android handset, the ‘inTouch’. As a result Avea has the highest level of smartphone penetration in the country with 27% in Q1 2013. On the back of this, data revenue increased by some 79% annually to hit $348 million in FY2012-13.

This example clearly demonstrates the beauty of Customer Experience Management. In this case, segmentation of the customer base coupled with smart campaign management and a high level of personalisation enabled Avea to successfully target their customers and increase data usage and revenue.

Another way of enhancing this Customer Experience Management is through incorporating Proactive Data Quality Initiatives which provide compensation to smartphone owners and heavy data users when they experience a bad quality of service or connection lapses while using data services. Instead, subscribers may receive extra call time or data back for free. From our experience, this isn’t a new concept but a very simple and often forgotten way to acknowledge a problem and enlist brand loyalty from your customers (instead of causing frustration).

At Lumata, we have also seen how innovative loyalty programmes which incorporate gamification and social media elements truly engage subscribers and drive customer loyalty but at the same time need to be easy to run and manage by the operator.

To conclude, Customer Experience Management combined with Proactive Data Quality Initiatives that also integrate customer loyalty programmes is an incredibly compelling way to attract and retain customers as well as grow revenue. Due to the complex and competitive market nuisances, this is an area which operators in the Middle East should pay particular attention to if they want to lead the charge.

Meet Lumata (Proud sponsor) at Middle East Com, 23-24 September at Sofitel Dubai, The Palm Resort. Visit www.comworldseries.com/me 

5 Sep 2013

Speaker Interview with Andrew McHenry

For the second year AfricaCom partners with Mobile Monday, the networking group for digital professionals. The South African team has been putting together great events and networking forums for the digital community in the region. Here we catch up with one of its founders, Andrew McHenry, who tells us more about MoMo’s activities in South Africa and at AfricaCom.

Andrew McHenry is a co-founder of Mobile Monday
Andrew McHenry is a founder of Mobile Monday
Tell us a bit about Mobile Monday in South Africa: what are your activities, who can participate, what are you trying to achieve?
MoMo SA, www.mobilemonday.org.za now in its 5th year has been growing from strength to strength with our events experiencing very encouraging growth in attendance, this coupled with a diverse cross section of industries ranging from start-ups to large corporates, brands, device vendors, mobile operators and mobile developers.
- Why are Mobile Monday and AfricaCom a good match?
MoMo’s partnership with AfricaCom is a perfect alignment across the mobile sectors at all levels within the Mobile ecosystem. With MoMo’s participation we believe we serve both AfricaCom’s and MoMo communities at large
- What can we expect from the Mobile Monday evening event in AfricaCom week (11th November)?
The culmination of MoMo’s yearend function ties in perfectly on Monday 11th November the eve prior to AfricaCom’s kick-off on Tuesday the 12th. To be hosted at a spectacular venue, Shimmy Beach Club www.shimmybeachclub.co.za encapsulating Cape Town’s atmosphere. With amazing live bands lined up to entertain our patrons, creating a perfect setting to celebrate another great year for MoMo SA. Oh and a few words from one of SA’s top leader and world innovator!
- You will be running a session at AfricApps. What is it about?
MoMo’s 2nd year participating in and chairing the AfricaApp session building on last years, with great topics on the agenda we anticipate stimulating and valuable contributions to be delivered and trust all who participate to walk away having gain insights.
- What makes Africa’s digital market exciting? What major trends should we expect to discuss at AfricaCom and which companies should we look out for?
I see MVNO’s + airtime price wars + MOBILE TV + Data growth + OTT + Mobile payments!
- Do you have any tips on how to make the most of AfricaCom?
To extract the most from your time at AfricaCom review the agenda’s and have a strategy to attend the sessions you have on your lists. Do allot time to walk through the exhibition area, there’s always a few pearls tucked away somewhere in the halls’ mingle, socialize, bring loads of business cards and if you haven’t been at a few parties you haven’t done AfricaCome or Cape Town!

For your chance to meet Andrew McHenry at AfricaCom register for your conference pass today, or get a free exhibition pass here

4 Sep 2013

Walid Driss, Facebook: "In many cases Facebook accounts for 30% of the operator's data revenues"

Middle East Com 
23rd-24th September 2013 
Sofitel Dubai, The Palm Resort, UAE 

Middle East Com is taking place in just 3 weeks' time. Don't forget to register to attend the leading Middle Eastern event for the Telecoms, Media and ICT industry. 


Walid Driss is the Client Partner at Facebook 
The Middle East Com team caught up with Walid Driss ahead of the Middle East Com Conference and Exhibition, taking place at the Sofitel Dubai in UAE - 23-24 September to find out a bit more about his experiences and focus at the event.

Read the full interview HERE 


Middle East Com: Facebook has now entered into partnership with several operators both regionally and globally. How are the operators benefitting from these partnerships and what are the key drivers for joining forces?
Walid Driss: "Operators are benefiting from the partnerships with Facebook in two ways. The first way in which operators are benefiting is the integration and bundling of Facebook services. Facebook is the most used service in virtually all the markets, making it a strategic driver for demand for operators. The second way, in which the operators are benefiting, is connecting and engaging with their customer base in an efficient way."
Read the full interview HERE 


Middle East Com: Are you struggling to forge agreements with some operators who still see Facebook as a threat?

Walid Driss: "Facebook is a strong partner for operators. Apart from driving customer acquisition and preventing churn through increased loyalty, in many cases Facebook accounts for 30% of the operator's data revenues. Operators know this and we are working very enthusiastically with the operators. However, we are facing challenges with operators having difficulties in trading off short term revenues for long term benefits, or not being bold enough in experimenting new approaches."

Read the full interview HERE 


Middle East Com: What is the future for Operator/OTT relations?
Walid Driss: "The operators have been facing disruptions and pressures for a long time now, and the OTT pressure has been the most discussed headache for operators in the recent times. But operators have always proved to be resilient, simply because they are fulfilling an underlying need that is at the heart of their undisputed core business: connectivity."
Read the full interview HERE 

Find out more at Middle East Com. Walid Driss will be speaking on Day 1 at 10:45 on “The Power of Partnerships: Maximising Opportunities and Minimising Threats”. 

Meet Walid Driss by registering using one of the options below: 

- Apply for a Free* operator pass here
http://me.comworldseries.com/free-passes/ (*conditions apply)

- Purchase your conference ticket here

- Register for a FREE Exhibition Pass here

Kind Regards

The Middle East Com Team
Visit our website: http://me.comworldseries.com/

Middle East Com is Sponsored by: 

Mahindra Comviva, Altran, Comverse, Ericsson, Comza, Tellabs, BICS, EMC and Lumata

2 Sep 2013

Meet Timeline Global Telecom Solutions at AfricaCom

Timeline Global Telecom Solutions BV is exhibiting at AfricaCom taking place on 12-14 November 2013 in Cape Town, South Africa

Peter Booth is the Managing Director of Timeline Global Telecom Solutions BV with more than 25 years international experience in the telecom industry.

Reused Telecoms Equipment
The Telecoms Equipment Reuse Market is a well-established industry that has been in operation for more than 40 years. The trade of Reused telecoms equipment is freely active between OEM’s, End Operators, Service Companies and Trading Companies and has increased with the multivendor service offerings.

There are some basic principles to be considered in the trading of Telecoms equipment which include Hardware, Application Software & Licensing, Trade Restrictions and Title of the equipment.

Hardware is the physical unit and can include micro chipsets of varying complexity, where these microchips set have embedded programing (Firmware) set at the time of manufacture and is not user accessible, configurable or replaceable as per any other hardware item at component level. This renders the Firmware an integral part of the physical unit in which it cannot be added too, changed or removed without physical intervention at component level, unlike the Application Software which is system loadable and configurable.
A change at component level, including firmware would be to modify the specifications of the original unit, thus impacting original Part number and revision designated to the unit. If this was required, it can only be done under agreement with the OEM, otherwise it is a breach of their IPR as per any software licensing breach.

Used / Reused Hardware is sold between parties excluding any software licensing, where the purchasing party commits to indemnifying the selling party of any claims related to licensing breaches for the future use of the Hardware.

This is not limited to Telecoms equipment but all devices and products that we encounter in our daily lives.

The Application Software is a user loadable and configurable package that has a particular market and user features / functionalities. The Application Software is loaded and stored on a media device (e.g. Hard disk) in the central system and is downloaded to network nodes while they are powered and connected to the network. If a new Node or module is connected to the network, it will need to be downloaded and configured with current core Application Software (typically automatically) for the node to operate within the network. E.g. a Used Base Station is moved from one network to a new network, the Base Station Application Software is downloaded from the central BSC upon commissioning.

Application Software is governed by an End User Agreement / License from the OEM that is normally part of the Frame Supply Agreement. The Application Software typically sold on system and/or capacity basis known as the “Right To Use” (RTU) License (e.g. RTU per 1000 subscribers or RTU per Transceiver). It is therefore the responsibility of the End User to ensure they have the required OEM Application Software Licenses / RTU.

The Application Software / RTU is not a product that is traded within the Reused Telecom equipment market. This is taken into consideration when an offer is made for the Hardware only sale / purchase of the reused equipment.

The OEM traditionally has placed commercial restrictions on Application Software by licensing it to a single End Network but with the advent of large Group Companies owning multiple networks, the Group companies now included in the Frame supply contracts the Right to transfer the Application SW / RTU to another Group company where the group company has control and can maintain the license usage conditions. The trend is for Group Companies to make it mandatory for OEM’s to allow internal Transfer of Application SW, including previously purchased Licenses or be excluded from new supply opportunities, use the Operators purchasing power to break the OEM’s commercial model.

New or additional Licensing is only needed for Hardware where the existing license limit is reached. Thus for the case of Spare Parts Replacement / Exchange or Repair Avoidance (largest reuse activity), no additional license is needed for the hardware when one unit is replaced by another regardless of its source.

Trade Restrictions due to governmental or UN sanctions need to be adhered too per product type, country of origin and financial payment process regardless of another OEM commercial agreements or License arrangements. Though broad restrictions can be in place for some countries, these do not always include basic telecoms equipment and each situation should be reviewed on a case by case basis.

Equipment Title is an import issue to clarify prior to any sale / purchase of equipment. This should not be mixed with licensing obligations or restrictions as these are to separate legal matters.
The Selling party needs to ensure that they have the full legal tile to the goods and that here is no other financial obligations restricting them from disposing of the asset.
  • ·         Does the seller have the full legal tile to the equipment?
  • ·         Are all loans or other payment obligations relating to the equipment meet?
  • ·         Are all Tax related matters settled (e.g. import duty exemption but payable if re-exported)

In a network upgrade or swap out, it can be that the operator signed as part of the commercial agreement that the OEM, that the OEM takes the responsibility to de-install the equipment and return it to a central warehouse (recommended that the installation party is responsible for the physical de-install & return of equipment to a central location). In such chases it can be that the commercial agreement can included that the OEM takes tile of the equipment (buy back or trade-in discount). The operator needs to ensure that they understand such arrangements for managing the removal of the asset from their own balance sheet, the adjustment in book value and that the asset is no longer available to sell gaining additional cash return.

Recycling – In the event that equipment is recycled, then there is no reuse of the equipment and as such no on-going Application Software licensing requirement.

 Find out more: meet Timeline Global Telecom Solutions BV at AfricaCom, visit Stand P4. Visit the website: http://www.timelinegts.com/