Developing new revenue streams is a main concern for all of the telecom operators

Telecom operators are not only facing increased network costs to meet demands for faster broadband, but the top players are cutting into remaining revenues with their own free internet voice calling and free messaging services, delegates heard at the Middle East World Telco Summit in Dubai.

Pressed for suggestions yesterday on how telecom operators and internet giants such as Yahoo, Google and Skype can find some middle ground, experts seemed to be at a loss to suggest a magic bullet that would solve the impasse.

Both sides of the dilemma joined a panel discussion yesterday morning which noted that voice and SMS services provide $850 billion (Dh3.1 trillion) in revenues annually to global telecom operators of an industry worth about $1 trillion.

Andrew Hanna, corporate communications officer of Viva Bahrain, said it's no secret that internet companies that make billions on networks owned by someone else are cutting "into existing revenue streams. We understand there is going to be cannibalisation."

Great inventors

He didn't buy into the premise that over the top (OTT) players should be pressured into sharing ad revenues in exchange for being allowed to operate on telecom networks.

"Either you play along or customers will go to someone else," Hann said.

Asked if growing competition that offers free texting will kill off the golden goose of SMS revenues for telecom operators, Othman Sultan, CEO of du, replied: "How, and when, is the story."

He likened telecoms to great inventors of the super information highways which were followed by telecom cars (a metaphor for telecom services such as SMS introduced in the mid-1990s.)

The dilemma began, he said, when over the top players started building shops (revenue-earning websites) on the virtual roadside that attract high traffic. Those small shops have now turned into mega malls with demand for better roads.

"Developing new revenue streams is a main concern for all of us," Sultan said.

Ahmad Nassef, vice-president and managing director Middle East of Yahoo! was asked how his company feels about sharing revenues on the virtual roadside with the telecoms who are constantly maintaining and upgrading their electronic highways.

Partnerships

"We do it all of the time," Nassef told delegates. "Globally, we have some partnerships…we're a content player very open to partnerships."

With quality digital content, providers such as Yahoo draw high traffic. "We offer operators a way to monetise together," Nassef said.

Mohammad Gawdat, Google's vice president for emerging markets, compared mobiles to toothbrushes and noted that everyone will benefit if someday the mobile is as common as teeth cleaners.

He told delegates that over the top players are "attractors who bring users to you [the operators]."

Medhat Amer, CIO of Mobily, the etisalat-owned telecom operator in Saudi Arabia, said after years of absolute dominion over their own network, the arrival of the game-changing iPhone and voice protocol providers ‘became scary' because in effect, they had the ability to bypass traditional telephony services.

To fight back, Amer said Mobily launched its own internet voice calling app called Roamtalk — based loosely upon other services such as Skype — and after some success on PCs, moved the app to the Apple Appstore mobile market where it has taken off.

© Gulf News