Page 4 - SAMENA Trends - January 2020
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EDITORIAL  SAMENA TRENDS







         Connectivity for Everyone: New Funding and Financing Approaches






        For Telecom Operators, current  times  point   to be overcome. Nonetheless, for the purpose
        to a  certain  level of uncertainty, rife with   of drawing attention to the intended core issue
        disruptions,  requirement  of  re-thinking  here, it is  the need for accelerated investment
        business   models,   and   re-defining   the   that demands the limelight.
        operators’ multi-dimensional role in the digital
        space. While on one hand, digitization has been   There  are  clear  gaps  that  need  to  be  filled
        reshaping  the industry  landscape in  multiple   when it  comes to  providing connectivity
        ways, with the  telecoms  sector  expected  to   with  affordability  and at  reasonable internet
        experience  tremendous  digital disruptions  in   speeds.  In  order  to  fill  the  connectivity  gap,
        times to come; one the other hand, we still hear   most definitely, gaps in funding and financing
        of connectivity not being present everywhere,   communication  infrastructure development
        leaving billions  still  without broadband   first  need  to  be  filled.  Traditional  business
        connectivity  and  not  being  able  to  benefit   models for providing telecoms  services have
        from the trillions of dollars operators  have   come and can go only so far; connecting the   Bocar A. BA
                                                                                          Chief Executive Officer &
        already invested  in developing  infrastructure   next billion will be substantially more difficult   Board Member
        and bringing technology coverage. Combined   than it  was  early  on when  the telecom/  SAMENA Telecommunications
        this bitter reality with the telecom business’s   ICT landscape  was comparatively simpler.   Council
        overall slow growth -- greatly reduced EBITDA   Traditionally,  service provisioning has  been
        and cash flow margins, considerable  shift in   driven by revenue  and quick  return-on-
        competition dynamics in the communications   investment  approaches,  due  to which  it has
        market, and data  having become  central  to   not  been  practical  and  financially  viable  for   practices in service provisioning
        the core  operations with  its  own share of   operators  to  reach into far-flung areas.  Even   that have,  in some  ways, also
        opportunities as well as challenges -- and we   where USF models (which require the private   hindered connectivity availability
        have a major concern to address as Industry.  sector to contribute) have been implemented   --due to either  cost  factors
                                                to bring connectivity  to hard to  reach areas,   involved  or  due  to  insufficient
        Rebuilding  market  position in  the age of   these have not been issue-free, both in terms   customer  awareness, or  even
        digitization and 5G is  crucial for business   of  transparency  and  efficient  utilization.   due  to lack of initiatives by the
        sustainability and for fostering innovation,   Governments,  by themselves, lack revenues,   Industry that create  relevance
        and thus all efforts should be exerted toward   models,  expertise or even structures to   among potential end-users in the
        capturing the full digital potential, including for   substantially fund  development  of networks   use of broadband.
        enhancing  profit  margins.  At  the  same  time,   that  are  required to  connect  everyone. Even
        however, realization demands that we do keep   international  financial  bodies  known  for   Surely, there is a need to rethink
        in mind that in most of the SA-ME-NA region   funding development projects are also unable   current  business,  financing,  and
        and in  other parts  of the developing  world,   to fund every major ICT project across every   investment models. In  doing
        many hard to reach  areas where broadband   needy areas. The result is a gross insufficiency   so, the focus should  not only
        connectivity has yet not arrived, do remain an   of funding.                     be on making  infrastructure
        untapped profit-margin area for the discerning                                   available but also on addressing
        investor. This is despite the costs involved to   So as the once not-so-visible issue has finally   gaps in the  meaningful use  of
        get there.                              sprung to surface and the Industry, including   connectivity provided.
                                                premier global ICT  development agencies,
        The primary  issue in the still-persisting   recognize financial and funding gaps as being   As Industry, we have a daunting
        connectivity gap is that not only are there still   a serious concern -- which must be addressed   task  ahead of us.  And  SAMENA
        one billion people still not covered by mobile   both in  terms  of infrastructure availability   Council  looks  forward  to
        broadband networks, but also that a hefty 2.7   and catalyzing meaningful  connectivity for   assisting  in  fulfilling  this  task
        billion potential users, who do have technology   the purpose  of including  everyone  into the   with  all  its  resourcefulness  and
        coverage, are unable or unwilling to use it. The   growth of the digital economy -- it has become   commitment to  facilitating  the
        latter in itself is a  major issue of perception   pertinent  that we also look at the current   Industry and its leaders.
        and “technology relevance”, which also needs   business models and certain network operator



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