Industry Thought Leadership

Embracing the All-Digital Future

February, 2018
Ziad Shatara
CEO

Umniah

The world is heading toward an all-digital future. It is a transition that is occurring much faster than anyone had anticipated a decade ago, and one that has and will continue to redefine many of the long-established pillars of countless industries. Today, whether you are a start-up operating from a garage or a multi-billion dollar corporation, it stands truer than ever that you either go digital, or go home.

Despite the virtually limitless potential offered by this imminent future, many businesses remain reluctant to embrace the modern digital revolution. Change is never easy and comes with its fair share of risks, but the past decade has demonstrated that standing still is perhaps the riskiest approach in this day and age. In 2009, Finnish phone manufacturer Nokia was the world’s 5th most valuable brand according to Interbrand, and it had maintained its market share lead for more than a decade, but its failure to embrace the digital age dismantled the entire brand within the span of 18 months. Even a titan such as Microsoft could not keep the brand alive, nor could it keep its own Windows Phone platform viable for much longer simply due to being too slow to adapt.

Over the past few years, the telecoms industry has felt the pinch of this transformation. Increasingly dwindling revenues, ever-shrinking profit margins and the global shift away from voice and SMS services have been clear symptoms of a radical change. We have gotten used to perceiving this transformation as a challenge, when in fact it carries with it a treasure trove of opportunities. In this day and age, innovation is not only inevitable but is a gateway to an even more sustainable profitability.

For decades, operators have stuck to old habits, grasping to a fading business model that is only yielding lower profits and diminished valuations. Meanwhile, over-the-top services (OTTs) and other digital platforms are shimmering in the stock market, with low capex business models that draw in investors by the droves and result in ever-growing valuations. This is what operators need to embrace, and fast. According to a survey conducted by Tyntec, a US Inter-Carrier Vendor incorporated in London, 35 percent of operators have successfully generated revenue through OTT partnerships, while around 55 percent have already partnered with OTTs.

We have all heard of the many buzzwords that signify the digital world of tomorrow. Big data, the Internet of Things, cloud computing, and countless others. Even the longstanding foundations of the global economy, national currencies, are today standing speechless before the likes of Bitcoin and other cryptocurrencies, which demonstrates the sweeping nature of the digital shockwave.

Most operators face uncertainty over which direction to take when rethinking their existing business models. For example, in the height of the digital revolution in 2013, 43 percent of operators were considering offering their own messaging platforms to compete with OTTs – a number that has since dropped to 5 percent. This demonstrates the need for a direction that does not force operators to venture into unexplored territories but to leverage on their existing strengths.

Ideally, the first step operators should take is to transform the customer journey within their existing business models from a conventional to a pure digital one. Such a process takes time but ultimately establishes a solid digital foundation into which other services could be easily integrated. And once a healthy and evolving digital foundation is established, leveraging on OTT partnerships to generate revenue becomes a much easier undertaking. The scope of partnerships is consistently expanding, spanning digital communication services like social networks and broadening to include possibilities in content (music, video, books, etc.), utility services, travel, online shopping, gaming and countless others.

In the enterprise market, opportunities also abound for operators in fields such as cloud computing, security and the Internet of Things. An operator leveraging on its expertise in these fields to create viable OTT services within its own business model will have a competitive advantage in the market, particularly if it offers localized services tailored to its operational environment.

As an operator based in one of the most competitive markets in the world - Jordan, Umniah learned long ago that adaptability is its strongest asset when navigating the increasingly complex realities of the digital world. This is why we have been working proactively to adjust our business model to meet the demands of our changing landscape, implementing aggressive and forward-thinking strategies to transform the customer journey into a purely digital experience and creating a versatile platform for mobile payment. We have also reinforced our efforts to establish frameworks to enhance our understanding of our customer data in order to build well-rounded databases for use across multiple expansion strategies. Last but not least, we have been hard at work to develop strategies that specifically govern future partnerships with OTTs, with a focus on both advertising and commissions as potential revenue streams.

Change is in the air, and it is much more exciting than it is threatening, particularly if the telecoms industry meets it with open arms and an open mind. The beauty of the digital market is its reliance on progressive growth, which means that new ideas can quickly evolve to become long-term successes. Unless mobile operators adopt an innovation-first approach, their only avenue will be a wholesaler model, which — while somewhat viable — is ultimately wasted potential.

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