Setting a date with mobile data

Amr El-Leithy, Alcatel-Lucent’s Head of Middle East, Africa, Turkey and Azerbaijan region talks to Comm. about the mobile broadband revolution taking place across the region; the likely winners from it; and what strategies service operators may look to adopt in order to better monetise the opportunities

Amr El-Leithy is Alcatel-Lucent’s Head of Middle East, Africa, Turkey and Azerbaijan

Comm.: What impact is the wireless data revolution having on the markets that fall under your responsibility?

AEL: Combining the mobile phone and the Internet is having a huge effect on the emerging markets of Africa and the Middle East. During 2012, the region not only witnessed the fast development of mobile broadband but the beginning of LTE rollouts by several operators. At Alcatel-Lucent we believe that access to communications is a basic right, and that it will contribute to enriching the economies of the region by bringing information to underserved communities, eventually contributing to promoting trade, health services and education.

Comm.: In your opinion, are operators in the region learning how to effectively monetise their investments in broadband networks?

AEL: Network operators are still looking for ways to best recover their investment in broadband networks. Growth will most likely come from customised solutions for non-traditional communication needs of individual consumers and enterprises, and operators offerings will have to be flexible. Monetisation models are still evolving and operators are joined by a multitude of other players in defining new models. An interesting alternative would be to charge OTT providers an interconnect fee.

Comm.: What additional advantages are set to be driven for service providers and end-users by the deployment of LTE networks in the region?

AEL: Alcatel-Lucent research on 4G service demand suggests there is interest in entertainment-related services among consumers and interest in productivity-enhancement services among enterprises. With these new services comes an increase in the capacity required of the mobile network and the need for a cost-effective delivery infrastructure. The move to high-speed Long Term Evolution (LTE) networks will foster these innovations and the development of services and applications.

Comm.: Turning to the Middle East and Africa, what are Alcatel-Lucent’s strategic advantages in the region?

AEL: We have a physical presence in several countries in the region. We have major hubs in Egypt, Saudi Arabia, the UAE, Pakistan, Morocco, Turkey, South Africa and Nigeria. We also have partnerships and close relationships with all the major operators and have deployed LTE networks with four service providers in the region.

We also have several on-going LTE trials and deployments and are number one in in the area of IP, having deployed IP in many countries in the region. We also maintain an Alcatel-Lucent campus in Egypt with satellites in Turkey and Saudi Arabia, with R&D facilities present in Turkey.

Comm.: Do you believe the price of 3G and 4G smartphones and dongles are falling at a quick enough rate in order to keep up with the demand for data, or do they represent a bottle-neck to its uptake?

The telecom industry is at the point where the availability of broadband wireless networks is overlapping with the availability of inexpensive handsets. Now inexpensive mobile phones are common, and smartphones will follow suit soon enough… which will result in developing countries experiencing a level of Internet access that has not been previously witnessed.

Comm.: How well do you believe service providers are partnering with OTT players, and ultimately what is the winning proposition or model for all telecom stakeholders?

There are a lot of discussions around this issue. Operators’ margins are taking a hit as more and more consumers use applications developed by OTT providers virtually for free, and these are services they would previously have had to pay the mobile operator for. The result is that those mobile operators are being paid less for carrying more traffic. The emerging trend is that mobile operators are now considering application-based charging as a solution to their data-carrying issues. The unlimited data plans of the past have generally started to become a rarity as mobile operators recognize that the cost of the plan does not meet the cost of supplying the data. There are clear benefits to application-based charging for both the consumer and mobile operators. Consumers can choose how they pay for their data depending on their lifestyle and operators will finally be paid the actual cost of providing and managing these data services

Comm.: How big a role is outsourcing and managed services playing in the development of next generation services?

In some markets, outsourcing is not taking off as it should be. Yet, outsourcing and managed services remain important for some operators that want to cut operating expenses and enjoy a smooth transition to all-IP service delivery.

Comm.: Any specific regional trends that you would like to highlight with respect to data uptake?

The region has one of the highest mobile penetration rates in the world; the rise of digital media consumption is phenomenal. This is evident in how consumers are becoming increasingly savvy and demanding the best value for data. This trend can also be witnessed through the rise in the number of smartphones and tablets being purchased.