Convergence to Istanbul 2009

Event Highlights

SAMENA Telecommunications Council’s
"Convergence to Istanbul 2009"
November 4-5, 2009, Turkey

An opportunity for all stakeholders to assess the pace at which the marketplace is advancing and how evaluating organizational assets and goals has become inevitable, SAMENA’s Convergence to Istanbul 2009 conference was held in Turkey on November 4th through November 5th.

Convergence to Istanbul was organized with support from Turk Telecom and Nokia Siemens Networks. Keynote speakers from around the region, including from the markets of Turkey, Saudi Arabia, Pakistan, Bahrain, UAE, Lebanon as well as from the mature markets of UK, Germany, France, Sweden and Italy, shared with an audience of equally diverse regional representation business insights and market experiences.

Of particular interest to the audience of regional telecoms industry was the SAMENA annual awards ceremony, designed to acknowledge regional telecom organizations and executives who have made tangible contributions in their home markets and in the markets of the region. The ceremony was attended by a prolific gathering of executives from within and outside of the SAMENA region that included some of the most regionally and internationally renowned experts and opinion-makers.

During Convergence to Istanbul, SAMENA’s International Roaming Rates Group was also launched. This new working group, designed to operate as a consortium of telecom operators for developing a consensual approach on reducing international roaming rates, would work in unison with SAMENA’s Regulatory Committee.

Key addresses during the opening session of Convergence to Istanbul were delivered by Dr. Tayfun Acarer, board chairman and CEO of Information & Communication Technology Authority, Turkey; Dr. Paul Doany, CEO, Turk Telecom; Mr. Wilson Varghese, CEO of Kalimat Telecom; Mr. Bosco Novak, CMO, Nokia Siemens Networks; and Mr. Matthew Glynn, Head Telecom Practice, MEA Region, DLA Piper.

Panel speakers of Convergence to Istanbul included:

DWT – Mr. James Smith, Of Counsel
CAP GEMINI – Mr. Ozan Kirtac, Country Director, Turkey 
SONUS – Mr. Abir Hnidi, GM, UAE
NSN – Mr. Hendrik Jan Steneker, Head of ME Integration Line, UAE
PTA - Dr. Mohammed Yaseen, Chairman, Pakistan
PTCL – Mr. Sikandar Naqi SEVP, Special Projects, Pakistan
Value Partners – Mr. Riccardo Monti, Chairman, Italy
Alchemy International – Mr. Justin Connor, Chief Legal Counsel, UAE
iTel SAL – Mr. Fouad Dandan, CEO, Lebanon
TRC Jordan – Mr. Al Ansari Al Mashakbah, Director, Jordan
STC – Mr. Hamoud Al-Kussayer, VP, Saudi Arabia
TRA – Mr. Alan Horne, General Director, Bahrain
ZAPP – Mr. Imad El Kurdi, CFO, Romania
NexGen – Mr. Ghazi Atallah, Managing Director, UAE
SmartWorld – Mr. Mustafa Kaddoura, CTO, UAE
Devoteam – Mr. Osama Ghoul, Managing Partner, UAE
NSN – Mr. Marc Veelenturf, Head of SMC Sales, UAE
Intelsat – Mr. Shahrokh Khanzadeh-Amiri, Managing Sales Director, UAE
Detecon – Dr. Kai Grunet, Partner, Germany
Cordys – Mr. Stefan McKenzie, Director, UK
Value Partners – Mr. Marco Ferrara, Director, Turkey
Wi-Tribe – Mr. Philippe Berard, Group Director, Qatar
Booz & Co. – Mr. Hilal Halaoui, Partner, Saudi Arabia
Alfa Mobile – Mr. Samer Salameh, CEO, Lebanon
Value Partners – Mr. Santino Saguto, Managing Director UAE
Inmarsat – Mr. Samer Halawi, VP-ME and Asia Pacific, UAE
Telcordia – Mr. Graham Cobb, Director, Ser. Delivery Marketing, UK
NAGRA – Mr. Ivan Verbesselt, SVP Marketing, Switzerland
Davis Ross Group – Mrs. Samiah Bahsoun, VP- Broadband Solutions, USA
Booz & Co. – Mr. Ghassan Hasbani, Principal, KSA
Nawras – Mr. Ross Cormack, CEO, Oman
Omantel - Dr. Amer Al Rawas, CEO, Oman
Turk Telecom - Dr. Paul Doany, CEO, Turkey
Mobinil – Mr. Alex Shalaby, Chairman, Egypt
Orange Jordan - Mr. Philippe Vogeleer, CSO, Jordan
Etisalat – Mr. Ahmed Bin Ali, SVP-Corporate Comm., UAE
du - Mr. Hatem Bamatraf, SVP Technology, UAE

The discussions during the conference’s first day revolved around SAMENA’s deliverables to members, including the awards ceremony, which was held at the conclusion of the day. SAMENA noted how the industry has treaded a fairly tough path only to stand triumphant. According to Booz & Co., after the downturn, glimpse of hope is apparent and several trends, including the commoditization of telecom services, have emerged. These trends are being driven by standardization of technologies, among other factors. Most operators in this region have sound financial backings and thus it is time to invest. They can carry out scale investment, which comprises merger and acquisition related endeavors; scope investments; and investments in infrastructure expansion.

Operators must understand that the time to change and prioritize is now, in order to reach business efficiencies. Companies have to partner wisely, set goals and decide how they want to achieve them.

Turk Telecom’s CEO, Dr. Doany, in his address, stated that archaic regulations are stifling innovations, as they are a remnant of older times. To drive innovation and to find new revenue streams, Turk Telecom is now investing in Turkey’s health sector, which requires much investment from both ICT technology and financial investment perspectives. According to Turk Telecom Regulatory Authority, the Turk market will experience full telecom "convergence" within the next ten years. While “convergence” was termed an enigmatic phenomenon description or definition of which differs among any two people, its reality is gradually materializing, driven by regulations, competition, customer trends and technology evolution.

A note on brand innovations and content creation was delivered by du of UAE; the company would later be revealed as the lead for running SAMENA’s Content Committee. During the content discussion, content piracy issues in the Middle East were discussed by Showtime. Pay TV is now gradually gaining acceptance among telecom operators, which are deploying it to raise ARPU. Undoubtedly, Pay TV is a value proposition, which telecom operators can offer and should look into. On a related noted, experiences of operators, working in tough climates and facing both service related (including content) and infrastructure related, were shared by Kalimat Telecom of Iraq.

The gathering in Istanbul brought several experts from Nokia Seimens Networks as well. The company, a valued member of SAMENA Council, had held its ThoughtShare Efficiency Forum a day earlier, on November 3rd. One of LTE’s (3GPP long term evolution) primary promoters, Nokia Siemens Networks highlighted that telecom industry has never faced dearth of opportunities, as there exist too many. However, evaluating the best ones is the biggest challenge that companies, at large, face. Furthermore, several companies are struggling with ways to drive down costs. While many want to expand the scope, some simply lack the experience necessary for making better decisions.

SAMENA’s regulatory advisor, DLA Piper, advised that new operator paradigms have emerged, which have also had a drastic impact on supplier-operator relations. That is to say, both operators and suppliers need to think of each other as “partners” now and develop symbiotic relationships that can provide both parties strategic and financial advantages. Linear decision-making—and this applies to most everything in this age—can no longer be applied, since complex interdependencies now govern how companies do business; everything is linked with everything else. Providing a financial perspective to the gradually-improving downturn, Credit Suisse commented that, contrary to belief, capital is available for companies. However, access to such capital depends on a given company’s position in the value-chain.

Drawing a perspective on fixed-line revenue erosion, Nokia Siemens Network noted that just as there are man y opportunities, there are as many ideas, but which cannot be executed; many businesses struggle in deciding what business models to follow. A PTCL perspective, provided by Mr. Sikandar Naqi, who was representing Mr. Walid Irshaid, Group CEO of Etisalat run PTCL and Ufone, revealed that large fixed-line incumbents have had to become much creative in creating as well as personalizing revenue-generating services. To explore new revenue streams, PTCL has begun providing 3G wireless broadband over its WLL network in Pakistan. This was further complemented by a note from Sonus Network’s Abir Hnidi that more fixed-line operators are now embracing disruptive technologies to reduce opex and to introduce new services. Also, migration to NGN is needed. Plus operators (such as PTCL) and vendors (such as Sonus) are showing some understanding of the fixed-line issues, including customer management.

Increasingly, we see that markets are being driven by broadband and mobile equipped households. The Saudi Telecom perspective is that fiber investment is crucial, as, historically, regulations and financial limitations have kept fiber deployments at low levels. The Italian perspective, provided by Value Partners, included the need to meet challenges of providing services to large populaces. Capability of squeezing value to maximize traffic generating services was discussed. Operators need to start making money from network services and not just from the network. Whatever operators may create, pricing needs to be done smartly and according to the value of the content or service created.

On the issue of mobile roaming, we can either have enforced regulation, voluntary reduction or can form global alliances. However, we do need to keep in mind that, traditionally speaking, operators have been challenged by the need to balance what they pay as high license fees, required to win telecom licenses and operate a network, and what they charge their subscribers as high roaming charges. STC was quick to point out that having too high charges is wrong but so is giving roaming services for “free”. Pakistan Telecom Authority’s chairman, Dr. Muhammad Yaseen, while pointing out the need to lower roaming rates was also of the view that SAMENA could be utilized as a consultation platform to approach the mobile roaming matter. Incidentally, SAMENA had already planned the creation of a group to approach roaming rates, with large Middle Eastern operators taking the lead in discussions. As reaching a consensus on mobile roaming is inherently a complex matter, it is a challenge to devise one formula for all, when "we don't come from the same background", as pointed out by Mobinil’s chairman, Mr. Alex Shalaby.

Concerning the enterprise services needs, Smartworld pointed out that there is an impending need to do more with less. Enterprises are busy aligning themselves with customers by innovating; building better trust relationships; and managing the value-chain. Service providers need to do the same.  Nokia Siemens was of the view that service providers need to identify enterprise needs, which vary by vertical industry needs. Furthermore, it is a complex ordeal to serve large enterprises.

The industry faces tough challenges for the millennium, and thus there is a need to have a one platform that can do all. Both large and small enterprises can benefit from the agility and dynamicity in services as supported by Service Oriented Architecture (SOA) and Business Process Management (BPM).  We are now in the age where Web 2.0, cloud-computing and telecom IP convergence based VAS exist and are beginning to become more rampantly deployed. Throughout the industry, common perspective exists that the cloud is a major shift in the ICT technology. Evolution of the Internet, the Cloud is a major platform for innovation and which would make it feasible for services requiring “zero” programming to be offered, to excel in today’s market. Interestingly, as compared with dot.com, there exists a strong business case for cloud computing that can help drive ARPU for the service providers.

Broadband is another major element to prospective revenue growth for the service providers that was discussed during Convergence to Istanbul. With its growth having been triggered by inherent flexibility, ease and comfort in access, broadband has truly experienced an uprising in scale and scope. At this stage in industry evolution, operators and service providers are better able to assess and evaluate which technology, for example, WiMAX, HSPA, or LTE, are better able to meet their business needs and those of their customers. Further, operators are now asking of themselves to explore better vendor strategies. Mobile broadband is offering a strong value proposition and it is imperative that operators make a good use of this type of VAS. Furthermore, data traffic is rising, while revenues have been under stagnation for some time now.  Henceforth, being a mere “pipe”, as pointed out by Alfa Mobile of Lebanon, is not good enough a choice—though, ultimately, it would depend on any given operator’s own choice and how much it knows itself and its business needs as well as its aspirations.

The chief executive or their deputies, who participated in Convergence to Istanbul in the CEO Live session, raised several key points depicting both their awareness of their own market and their understanding about where the industry is heading, and how the emergence of a myriad of handsets and devices have visibly affected the business, consumer behavior, expectations, and operators’ business modeling. 

Executives reiterated that consumers have developed a much greater sense of freedom now than they did years ago, and cannot have that freedom compromised now. Thus, while companies strategize better, it is important to map what operators want to offer and what the customers want. As demands for data rise, so will the need to make that data securer with both speed, robustness and protection added to it.

“Dumb networks” are neither required nor can exist in today’s age. What is required, are vertical offerings that can be tactfully created and provided to the customer. In many situations, networks may also find it more practical to better customize existent services instead of blindly creating new ones. A similar approach may be lent to the cause of broadband expansion, which can be further enhanced if operators invest wisely in the customizing their offerings. To make better use of network capacity, deals with virtual operators can also be made. Generally speaking, while alliance formation, especially in the shape of merger and acquisition, has been on a notable decline (by about 40%) globally, it has increased within the SAMENA region by around 25%. This is a clear sign that alliances formations and coming together of companies to work better in order to enhance business efficiencies are a need of the hour here in the SAMENA region.

Operators, being amidst the industry wobble, require assistance from governments. If the governments have objectives regarding the expansion of telecom services or have any other sector-wise aspirations, they should have to share in the costs of providing services. A view provided by Turk Telecom, all policies made by governments should have a greater purpose of saving and strengthening the telecom industry, and not just to “control” operators. Regulatory frameworks, arguably, as found in the EU, are archaic and while operators struggle to innovate and manage themselves better, government should also improve onto their regulatory regimes. We, collectively, must move toward following responsible growth patterns and, where applicable, need to address overbidding and other prices structures that may adversely affect the sector. Furthermore, in another view by Mobinil, while operators, given their roles and responsibilities, are willing to contribute to government funds to help support the creation and the expansion of ubiquitous telecom services for underserved and disconnected areas, governments should avoid interference in telecom matters.

The executives participating in the CEO Live session upheld that governments should revisit policies and regulations, so same mistakes or unnecessary complexities don’t arise in the future.

Among key highlights of the Convergence to Istanbul conference were the awards, which were bestowed upon organizations and individuals serving in the telecom industry of the SAMENA region. The award winners named included:

• Batelco and Saudi Telecom Company Best Telecom Deal of the Year
• Jordan Telecom Group Best Fixed-line Carrier of the Year
• Mobinil Best Mobile Carrier of the Year
• Etisalat Best Content Provider of the Year
• Etisalat Best Wireless Broadband Operator of the Year
• Etisalat and Turk Telecom Best Quality of Service Operator of the Year
• Batelco Best NGN Operator of the Year
• Turk Telecom and Jordan Telecom Group Best FMC Operator of the Year
• Etisalat Best FTTx/GPON Operator of the Year
• Huawei Technologies Best Innovative Technology Provider of the Year
• Telecom Regulatory Authority (TRA) Bahrain Most Progressive Regulator of the Year
• Engr. Saud Al Daweesh Outstanding Telecom Operator Leader of the Year
• Engr. Saud Al Daweesh Best 2009 SAMENA Pioneer
• Mr. Mickael Ghossein Best 2009 Architect

In essence, the Istanbul conference, a gathering of representatives from more than twenty countries, representing more than 400 million inhabitants from around the SAMENA region and beyond, saw a host of some major developments and initiatives that have been made at SAMENA. These include:

• The election of Engr. Saud Al Daweesh, CEO of Saudi Telecom Group, as SAMENA’s new chairman
• Acknowledgement of key regional organizations and individuals during the second SAMENA annual awards
• The joining of Mrs. Nayla Khawam, CEO of Jordan Telecom Group (Orange), as a director in the SAMENA Board of Directors
• The creation of SAMENA’s International Roaming Rates Group (SIRG)
• The creation of SAMENA Content Committee, to be headed by du, the UAE ‘s second telecom operator
• The SAMENA Regulatory Committee meeting, to approach a host of issues, including convergence, WiMAX, Mobile TV, and EMF health hazards from telecom networks
• The Submarine cable meeting

In the views of SAMENA’s CEO, Tom Wilson, “we have had an outstanding conference and dialogue this year in Istanbul. In addition to recognizing key players this year, we have been successful in further highlighting the needs of the industry and have held strong discussion sessions to help us evaluate things closely. We offer special thanks to Nokia Siemens Network and Turk Telecom, ICT Authority of Turkey, Telcordia, Inmarsat, Horwath mAK and ICT Dunyasi for helping make this year’s conference a great start for SAMENA in Turkey. This certainly will not be our last time here.”
SAMENA’s Convergence to Istanbul 2009 conference will be followed by the January workshop on FTTx and GPON in the UAE.