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Digital services market thriving [Gulf Industry]
[January 02, 2013]

Digital services market thriving [Gulf Industry]

(Gulf Industry Via Acquire Media NewsEdge) In order to penetrate the Mena region's rapidly growing digital services market and overcome related challenges, telecom operators must build an entirely new capabilities system, a report said.

With the market for digital services in the Mena region set to grow 12 per cent annually by 2015, telecom operators can effectively tap into this growth potential by better leveraging their competitive advantages, added the report from Booz & Company, a top management consulting firm.

The company estimates that the market for digital services in the region will reach $35 billion by 2015, and properly prepared Mena telecom operators will be well-placed to meet this growing demand.

"The advance of digitisation is already evident throughout the region," explained Bahjat El-Darwiche, a partner with Booz & Company.

"In recent years, the fibre infrastructure that provides the backbone of digitisation has been extensively deployed, particularly in the resource-rich countries of the GCC." Concurrently, the Mena region's predominantly young population and the growing availability of smart devices and applications are driving customer demand for all things digital across principal market segments like: Consumers: Every day, there are 36,000 new Facebook subscribers in the Mena region and an ever-growing population of digital consumers that is quickly coming to expect access to a broad array of digital content and services.

SMEs: The Mena region's SMEs are adopting digital technologies and services to manage their primary operational challenges: anemic cash flow and the lack of in-house IT skills.

Large enterprises: Digitisation is transforming the business models of large enterprises in the Mena region. In effect, these organisations are increasingly adopting M2M-based solutions and various related industries are also turning to digital services to create competitive advantage in their markets.

Governments: Mena governments are equally recognising the longstanding benefits of digitisation. Some governments, including those of Qatar, Saudi Arabia, and the UAE, have recently launched large-scale digitisation initiatives that are focused on government operations, extending government services over the Internet, and public services, such as health, utilities, and transportation.

With conventional voice and data revenues stagnating, telecom operators are seeking new growth opportunities and digital services are an obvious solution – especially given the new market's close positioning to voice and data services and the already high penetration levels of mobile and fixed broadband service in the region.

"There are six adjacent service segments that Mena telecom operators can build digital portfolios around: M2M, applications and content, solutions development, cloud computing, systems integration, and managed services," said Louay Abou Chanab, a principal with Booz & Company.

Although the market for digital services in the Mena region is highly attractive, telecom operators will still have to face myriad challenges.

"They need to develop skills and business models to take advantage of these adjacent digital services opportunities. That also demands that they gain familiarity with the digitisation delivery chain," said Jad Hajj, another principal with Booz & Company.

(c) 2012 Al Hilal Publishing & Marketing Group Provided by an company

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