Mar 01, 2016

STC CEO: Telcos Need to Review Business Models

The CEO of STC Group Dr. Khaled Biyari stressed the urgency to review the business models of telecommunications companies given that data usage by individuals has lately increased several-fold while voice services are contributing less to revenues of telecommunication companies.
Dr. Biyari made the call during his “Digital Strategies for New Mobile Phone Services” presentation, as part of the “Ministerial Programme” sessions held alongside the MWC between 22-25 February in Barcelona. Recalling the phases of the industrial revolution, Biyari fast-forwarded to what has become known today as the “Digital Revolution,” a term recently adopted at the World Economic Forum in Davos, which dubbed it the “Fourth Industrial Revolution” in the history of humanity. During his presentation, the CEO of STC referred to the change in the reality of dealing with the internet, especially with the development of the so-called “Internet of Things” that has led to the acceleration of devices connecting to the Internet. This has tremendously impacted the way business is conducted yielding radically different business models. He explained that the telecommunications industry has gone through two stages of transformation during past decades, with the first focusing on delivering voice services, while the second, which we are still experiencing, concentrates on delivering broadband services. With the increased penetration of “Digitization” in every aspect of daily life, it is imperative for all operators, worldwide, to review their business models to keep up with this increased demand and to sustain their business models.

Biyari highlighted four main factors he believes will drive future success; he summed them up as:

  • Pricing policy and quality of service delivered to clients.
  • Quality of products and services, as well as related partnerships and bundled content.
  • Technology and all that entails in terms of scalable network structures.
  • Regulatory bodies and their role in enacting regulations that encourage investment in the sector.

The CEO of STC Group concluded by comparing two regulatory models. The first model adopted by the U.S. focused on encouraging investment in infrastructure, which led to a boom in the telecommunications industry and a rise in service levels; the second model focused solely on increasing competition and lowering prices, which led to a deceleration in growth and low quality of telecommunication services. He stressed the necessity to build a regulatory framework that fosters investment, caters to the demands of the new digital economy which, to a large extent, depends on the ability of telecommunication companies to build the necessary infrastructure and offer high quality services at fair prices.

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