As the smartphone becomes the de facto standard for accessing the Web and over-the-top (OTT) services, it disrupts traditional telecom revenues. A new report from global management consultancy Arthur D. Little (ADL) and SAMENA Telecommunications Council (SAMENA Council) urges Middle East and North Africa operators to ride the OTT wave, and, in parallel, look for new revenue streams to grow sustainably.
In The OTT conundrum for MENA telecoms: Achieving sustainable growth in a digital world, ADL and SAMENA Council report that new digital disruptions will increasingly dictate new norms within the business. Building on SAMENA Council’s earlier initiatives to help bring telecommunications operators together, the report draws attention to accelerating the pace of adoption within the changing digital space. Insight from the report reveals that with slowing population growth, falling prices and regulatory changes, the environment will become harder to navigate. According to the analysis presented within the report, there is no agreement within operator circles on the approach towards providers of OTT services. The report urges operators to take the lead to initiate collaboration and partner with OTT players in messaging and voice, and make every effort to rebalance revenue towards more data. At the same time, the predominant approach for an OTT video content play is to have pan-regional scale. For companies to continue growing in a sustainable way, though, the report from ADL and SAMENA Council points at tapping into adjacent revenue streams such as ICT services and smartization, while increasing efficiency. A digital transformation might increase efficiency by 30%, whereas bad debt optimization might bring an EBITDA uplift of 1–2%. “The telecommunications market environment in many of the MENA markets will change,” said Karim Taga, Global Practice Leader in ADL’s Technology, Information, Media, and Electronics (TIME) Practice. “Operators around the region should quickly rebalance their revenue mix towards more data and explore opportunities around smartization and ICT. Radical transformation might become an imperative for many players in this digital age.” “The much-talked-about business transformation model for operators has to materialize now,” said Thomas Kuruvilla, Managing Partner of ADL Middle East. “A number of efficiency measures should be at the top of operators’ agendas in order to navigate the digital future. In this reality, policy-makers and regulators will need to be balanced between consumers’ interests, return on investment for telecom operators, and the revenue needs of state budgets.” “SAMENA Telecommunications Council feels that highlighting the market and growth dynamics of the MENA region will prove to be insightful for the telecom operators,” said Bocar BA, Chief Executive Officer of SAMENA Telecommunications Council. BA reconfirmed SAMENA Council’s recommendation to approach over-the-top services, an important fact of digital life today, with openness to collaboration and developing partnership among the key stakeholders. “The OTT challenge may be one of those rare opportunities through which we can realize true collaboration and understanding among telecom operators, OTT players, policy-makers, and regulators.” The full report can be found at: http://www.adl.com/MenaTelcoOTT
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www.adlittle.com Copyright © Arthur D. Little 2016. All rights reserved. About SAMENA Telecommunications Council SAMENA Telecommunications Council is non-profit telecommunications association that represents the business interests of telecoms operators and service providers of South Asia, the Middle East, and North Africa. It is a operator advocacy and regulatory reach organization that aims to promote collaboration and knowledge-sharing across 25 countries within the SAMENA region and beyond. Its membership also includes leading technology companies and other key market players. SAMENA Council is currently chairing ITU’s Chief Regulatory Officers’ think-tank, a global platform for discussion to identify regulatory areas of global industry interest and to foster co-operation between regulators and the private sector. Contacts: Sue Glanville/Cate Bonthuys Tel: +447715817589 / +447746546773 firstname.lastname@example.org / email@example.com