Convergence and operations

by david.nunes
Mickael GhosseinIssue:Africa and the Middle East 2008
Article no.:11
Topic:Convergence and operations
Author:Mickael Ghossein
Organisation:Jordan Telecom Group
PDF size:260KB

About author

Mickael Ghossein is the Jordan Telecom Group CEO, where he led the integration of its fixed, mobile, and Internet businesses, re-branding them as the Orange brand. Prior to this position, Mr Ghossein served as: the Executive Vice President of Jordan Telecom Group; CEO, Mobilecom (now Orange Personal), CEO of Orange Reunion; Commercial Chief Officer of Mobilerom; and Marketing and Communications Chief Officer of Mobilerom (France Telecom’s subsidiary in Romania. Mr Ghossein also worked for France Telecom, EGT and Thomson in France and Iraq. Mickael Ghossein graduated in Engineering (radio) from the University of Valenciennes Institute Superieur Electronique Nord ISEN (telecommunications), and University of Lyon (Masters in Electrotechnics Automatisation), in Marketing from HEC Paris, IFG Paris in Products Marketing and in Sales from Learning International.

Article abstract

Convergence provides subscribers with better, more – and more advanced – services at a lower price. It helps operators by facilitating new service rollouts, simplifying operations, reducing costs and increasing their competitiveness. Bringing modern, converged, telecommunications services to Jordan entails a series of challenges. Fixed line and wholesale business units, mobile units, administrative support, Internet service providers and content-oriented business units need to be combined under a single umbrella to prepare each individual operation for integration within a single company.

Full Article

The Middle East is witnessing an extensive telecommunications revolution. With high levels of telecom investment and a great deal of competition in the market, an operator needs strength and exceptional innovative skills to succeed in the region. Convergence provides an important advantage, and is high on the agenda of any ambitious telecom player. The main advantage of convergence is the ability it offers to provide the customer with better quality and improved services at attractive prices; this results in a stronger, more competitive, operator. It is clear that convergence is a key differentiator in today’s competitive marketplace. The recognition of the needs and benefits of convergence has led operators to study the idea of combining independent companies that offer different telecom services such as fixed, mobile and Internet. Since independent companies have separate systems for almost everything – separate networks, platforms, customer service, and billing systems – combining everything on a unified platform to achieve convergence is a challenge. When pioneering to achieve excellence a technology partner with strong experience can help an operator cope with the problems of bringing world-class technology and services to their market. Partners with heavy investments in research and development, can help implement state-of-the-art integrated networks to offer all that is new and innovative in telecommunications. Operators need a well-defined strategic plan to pull together separate operations and services under one structure and build an integrated operator in the region. Fixed line and wholesale business units, mobile units, business units, Internet service providers and content-oriented business units need to be combined under a single umbrella to prepare each individual operation for full integration as a single company. Bold decisions such as housing all of the new group’s different data and telecom services under one structure can help differentiate the converged operation from potential competition. For example, customers who already have a mobile line might find it easier to get Internet service from the same source. In addition, given the new group’s internal synergies, complementary services not available from the competition can be provided for subscribers. Effectively incorporating convergence in the new group’s commercial offerings requires a lot of hard work. An infrastructure has to be ready that integrates all the network, marketing, and customer servicing changes, as well as all the many other aspects of the organisation needed to operate the converged services. In Jordan, the economic and social setup also poses a challenge. Jordan is a country of more than 5.62 million people, to which one can add roughly 1.5 million expatriates coming mainly from Iraq, Egypt, Syria and Lebanon. It is a young nation – some 37.3 per cent of the population is less than 15 years old. The country, which lacks an abundance of natural resources, has a telecom market value estimated at a range of JD850 million to JD1 billion; one Jordanian Dinar is worth approximately US$1.40. The telecom scene in Jordan is highly competitive; there are four mobile operators, two fixed service companies, and three WiMAX providers. In this market, VoIP is also getting a high share of the telecom market. Introducing the concept of integrated services to the population – efficiently communicating the changes being introduced – requires a great deal of education. This calls for comprehensive advertising, public relations and direct marketing campaigns to reach out to the different segments of society. Awareness campaigns, including public road shows travelling to different parts of the country, are ideal to introduce new brand names and the concept of convergence. Although convergence offers many promising prospects, some operators are still hesitant about adopting the concept. However, it will not be long before all operators realise that they have little choice in the near future. Worldwide industry trends herald the advent of convergence and most new platforms reach the market already ‘unified’. Although some operators have yet to embrace convergence, this has not stopped the convergence trend from swelling. By incorporating the shift locally, an operator will automatically pave the way – in truth, make it necessary – for other operators in the market to follow suit. Operators should be encouraged to converge because it helps them increase their revenues by increasing the services they sell, diversifies their business and increases their traffic and revenues. Furthermore, operators obtain operational cost saving by sharing the same infrastructure, platform, and maintenance among all the converged networks and services. Above all, convergence helps to produce new services that attract new subscribers and reduce churn rate. A number of forces drive voice and data convergence; most important, is the rising need to enhance services for increasingly demanding customers. Another force is increased competition, which both causes and is caused by deregulation, unbundling, competitive access, and mergers. Moreover, voice prices are universally decreasing as bandwidth offerings witness an unprecedented boom and flat (directly connected, generally IP) networks become available. It is important to remember that the cost cuts that are possible through convergence, through streamlining technologies, allow operators to reduce the tariffs of their services and appeal to a wider audience. The wider access by all levels of society that this makes possible change social models as well as the way business is done throughout the world. The shift in access availability promotes worldwide social and economic integration and interdependence. Hikes in oil prices continue to upset economies around the world, encouraging people to rationalise consumption of energy and cut costs. In many parts of the world, companies with operations in different countries have set up integrated systems to communicate with each other in order to reduce the need to travel, cut costs and cut energy consumption. There is a growing trend to deliver a wide range of services to where people are located rather than have them travel to the service. This trend is one of the reasons we are seeing a boom in Internet traffic and transactions. The rise in oil prices, which has hastened the growth of this trend, can be seen as a catalyst for convergent services. Society is shifting in a direction that will make integrated services more appealing. Tomorrow will bring substantial changes in communications. Today we have telephones, PCs and TVs; tomorrow we will have multifunctional devices with integrated network interfaces. Today voice dominates the networks, but looking ahead data will dominate. Similarly, public networks and the Internet are separate today, yet in the future, we will see a global ‘network of networks’ that consolidates all the currently separate network services. The same applies to today’s dedicated applications; tomorrow will see more applications designed for almost universal use available on the Web. There is no need, though, to look to the future to reap the benefits of convergence. The present offers many examples, and more come out every day. Livebox, for example, is a smart convergent product that combines fixed and Internet services, and there are operators that offer WiFi and live radio. Mobile money transfer is another example of a convergent service offering; it gives people, especially those without bank accounts, a low-cost way to send money to others within their country or even abroad. With convergence, subscribers can benefit from a one-stop shopping experience that operators with converged networks and services can provide. Research is needed to support the growth of converged services – a need for researchers, marketing specialists and network engineers to work together to design and market new products that meet the needs of Jordan and other countries in the region. Multinational business and technology partners can provide important support in this regard. Research that probes customers’ needs and leads to effective segmentation of user groups according to their needs will help engineering teams apply their expertise to the design of convergence-enabled services that meet the requirements of each sector of Jordanian society. Finally, operators in the region should gear up to face the dynamic changes the telecom industry is undergoing. They need to study convergence and the changes it is bringing. Convergence is a major global trend; it is the future.

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