Saturday, September 29, 2012

Pan-Arab Carriers' Platform will Challenge OTTs

Matt Smith reports to Reuters that "Middle East telecommunications firms are discussing the idea of creating a pan-Arab online platform that would earn them more revenue from their networks by challenging Facebook and other Internet behemoths of the West .. Behind the proposal is a frustration shared by telecommunications firms globally: as they spend heavily to build networks, data traffic on the networks is increasing rapidly, but the firms essentially only make money from charging for access to their networks - a low-margin business".

Osman Sultan (pictured), CEO of du says: "OTT players...we can't share their gain and they won't share our pain .. 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",

".. common language and culture shared by the world's more than 350 million Arabic speakers, plus the webs of affiliated companies which Gulf operators own across the Middle East and North Africa, could make the project viable".
Pedro Oliveira (pictured), partner at global management consultants Oliver Wyman says "In the Gulf, Saudi Arabia, Bahrain and Kuwait have multiple telecommunications firms providing Internet access, and some of them may be the most vulnerable to becoming "dumb pipes". Such companies might cut access fees to their networks in an effort to win market share .. If one operator takes this approach, then others in the same market may be forced to follow as they lose revenue and market share and struggle to keep on investing in their network .. It's a race to the bottom."

See "Middle East telcos mull alliance in Facebook fight" - here.

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