Page 4 - SAMENA Trends - January 2020

EDITORIAL SAMENA TRENDS

Connectivity for Everyone: New Funding and Financing Approaches

For Telecom Operators, current times point to be overcome. Nonetheless, for the purpose
to a certain level of uncertainty, rife with of drawing attention to the intended core issue
disruptions, requirement of re-thinking here, it is the need for accelerated investment
business models, and re-defining the that demands the limelight.
operators’ multi-dimensional role in the digital
space. While on one hand, digitization has been There are clear gaps that need to be filled
reshaping the industry landscape in multiple when it comes to providing connectivity
ways, with the telecoms sector expected to with affordability and at reasonable internet
experience tremendous digital disruptions in speeds. In order to fill the connectivity gap,
times to come; one the other hand, we still hear most definitely, gaps in funding and financing
of connectivity not being present everywhere, communication infrastructure development
leaving billions still without broadband first need to be filled. Traditional business
connectivity and not being able to benefit models for providing telecoms services have
from the trillions of dollars operators have come and can go only so far; connecting the Bocar A. BA
Chief Executive Officer &
already invested in developing infrastructure next billion will be substantially more difficult Board Member
and bringing technology coverage. Combined than it was early on when the telecom/ SAMENA Telecommunications
this bitter reality with the telecom business’s ICT landscape was comparatively simpler. Council
overall slow growth -- greatly reduced EBITDA Traditionally, service provisioning has been
and cash flow margins, considerable shift in driven by revenue and quick return-on-
competition dynamics in the communications investment approaches, due to which it has
market, and data having become central to not been practical and financially viable for practices in service provisioning
the core operations with its own share of operators to reach into far-flung areas. Even that have, in some ways, also
opportunities as well as challenges -- and we where USF models (which require the private hindered connectivity availability
have a major concern to address as Industry. sector to contribute) have been implemented --due to either cost factors
to bring connectivity to hard to reach areas, involved or due to insufficient
Rebuilding market position in the age of these have not been issue-free, both in terms customer awareness, or even
digitization and 5G is crucial for business of transparency and efficient utilization. due to lack of initiatives by the
sustainability and for fostering innovation, Governments, by themselves, lack revenues, Industry that create relevance
and thus all efforts should be exerted toward models, expertise or even structures to among potential end-users in the
capturing the full digital potential, including for substantially fund development of networks use of broadband.
enhancing profit margins. At the same time, that are required to connect everyone. Even
however, realization demands that we do keep international financial bodies known for Surely, there is a need to rethink
in mind that in most of the SA-ME-NA region funding development projects are also unable current business, financing, and
and in other parts of the developing world, to fund every major ICT project across every investment models. In doing
many hard to reach areas where broadband needy areas. The result is a gross insufficiency so, the focus should not only
connectivity has yet not arrived, do remain an of funding. be on making infrastructure
untapped profit-margin area for the discerning available but also on addressing
investor. This is despite the costs involved to So as the once not-so-visible issue has finally gaps in the meaningful use of
get there. sprung to surface and the Industry, including connectivity provided.
premier global ICT development agencies,
The primary issue in the still-persisting recognize financial and funding gaps as being As Industry, we have a daunting
connectivity gap is that not only are there still a serious concern -- which must be addressed task ahead of us. And SAMENA
one billion people still not covered by mobile both in terms of infrastructure availability Council looks forward to
broadband networks, but also that a hefty 2.7 and catalyzing meaningful connectivity for assisting in fulfilling this task
billion potential users, who do have technology the purpose of including everyone into the with all its resourcefulness and
coverage, are unable or unwilling to use it. The growth of the digital economy -- it has become commitment to facilitating the
latter in itself is a major issue of perception pertinent that we also look at the current Industry and its leaders.
and “technology relevance”, which also needs business models and certain network operator

4 JANUARY 2020