Last year Zain Group established the Zain Digital Frontier and Innovation (ZDFI) business unit, which is charged with expanding the reach of the group into the digital space, and developing new innovative businesses and income streams. Emre Gurkan, the company chief strategy and business development officer, addresses the opportunities that the advent of smart cities, IoT and M2M will present and Zain’s role in the emerging ecosystem
Emre Gurkan is Zain Group’s chief strategy and business development officer
What does Zain mean when it says it would like to evolve to become a digital lifestyle provider?
The telecommunications industry has been an incredibly successful one, and we believe it shall continue to be, but we do have to note that it is changing, and we need to keep up with the pace of change, if not inspire it.
Today customers are using their mobile devices for much more than just voice calls, and value is being created through digital service offerings and applications. So while the business of providing communications connectivity has been our industry’s bread and butter, innovative telcos are also looking to deliver services beyond connectivity as this is where a growing amount of value is being created.
Much of the value that you are referring to has in fact been created by companies from outside of the traditional telecom industry, the so called over-the-top (OTT) providers. What is your view on the impact these types of companies have had on the telecom sector?
One must give credit to innovation from wherever it comes from. It is true that many of the data applications that are responsible for the growth in non-voice traffic being sent across fixed and mobile broadband networks were initially devised by Internet-centric developers and companies. As the telecom industry we have no problem with that, but given that we have paid and continue to pay billions of dollars every year for the roll out and maintenance of infrastructure, IT equipment, and spectrum we believe we should also participate in the value is creation.
In a word, partnership is the way I see our converged sector growing and prospering. I believe the various stakeholders have more to gain by working with one another collaboratively, and we at Zain are implementing such a strategy.
May you offer some examples of your collaborations?
We established the Zain Digital Frontier and Innovation (ZDFI) business unit last year, which is charged with seeking out opportunities in the areas of innovation; digital services; corporate venturing; and smart cities. Since its establishment, Zain has gone on to invest in three venture capital funds that are focused on early-stage and growth-stage digital opportunities in Central and Eastern Europe, Turkey, the Middle East, and Africa.
Earlier this we announced the expansion of our existing Partner Market Agreement with Vodafone, to deliver machine-to-machine (M2M) services to enterprise and government sectors across the region.
We also entered into a strategic collaboration with NeXgen Group, a leading smart city advisory and consulting services provider based in the UAE. This cooperation will enable us to join forces in advising governments and mega real estate developers in facilitating the deployment of smart city solutions across the region.
We have already identified substantial incremental revenue opportunities from the investment in smart city deployments in the Gulf region alone, and the strategic cooperation with NeXgen Group will initially focus on smart cities in key Zain operating markets.
In a fast-changing environment, partnerships are key to all stakeholders standing more to gain by working with one another collaboratively rather than pursuing individual pursuits
The cooperation will focus on delivering smart city technology solutions as a service and will include design and integration of applications including smart living, smart safety and security, and smart education.
How important is it to make the right plays in the digital field?
The reality of our sector is that data usage is growing at a much faster rate than we are able to monetise it. At Zain, we reported that for the first half of 2015 consolidated group data revenues (excluding SMS and VAS) witnessed a 10 per cent growth rate year-on-year, with data now constituting 20 per cent of the group’s total revenues.
We believe the contribution of data to our overall revenues will continue to grow, and what we need to do is look to offer services that are desired by our customers and maintain our relevance to the usage patterns that currently exist and will continue to emerge over time.