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It’s an interesting time for the telecom industry right now, says Saudi Telecom Company (STC) chief executive officer, Dr. Khaled Biyari. Telecom operators have to deal with major disruption and the need for digital transformation. The industry will face many challenges in the coming years, Dr. Biyari believes, but those challenges can be met with innovative solutions if the industry is willing to embrace change.

Dr. Biyari has witnessed the telecom industry “going through tremendous change.” Drawing from his vast experience in the ICT industry that covers a broad spectrum of technologies and clients, he said the industry faces two options at this crossroad: either to be pessimistic or optimistic.

“I choose the latter,” he said. “It’s up to us how we address the challenges before us – regulatory challenges and many others. Ultimately, I think the fact that the telecom industry is providing the backbone for the new revolution means that there is hope for new opportunities.”
Dr. Biyari spoke in Dubai recently at Telecoms World Middle East, where he outlined his vision for the future of telecommunications. In his speech he referenced a study conducted by the World Economic Forum and Accenture, which assessed how digitalization in 13 major industries is transforming business and wider society. The study maintains that $100 trillion of value can be generated between 2015 and 2025 for the telecom industry and society simply by changing business models and trajectories.

Barriers to this realization include regulatory frameworks, infrastructure gaps and lack of public trust in new technologies – all of which Dr. Biyari touched on in his speech. But ultimately, if stakeholders are incentivized correctly, the vast majority of that $100 trillion value can be captured, according to the study.

Building on these findings, the WEF/Accenture study has identified some imperatives for business and policy leaders wanting to unlock the benefits of digitalization, which Dr. Biyari has implemented into his own company by embracing new digital business ventures.

“With the dramatic rise of digitization will come the connection of billions of devices in the near future,” said Dr. Biyari, “around 7 devices per person – and this brings with it significant opportunity for the telecom sector. However, this movement also presents a lot of challenges for us to be able to cater for such significant growth.”

Changing landscape of telecom
The telecom industry provides the connectivity, the access and also contributes to the millions of apps that are shaping the way businesses are run today, Dr. Biyari explained. There are many examples of how the industry is changing sectors, such as retail, which is dramatically impacted by the digital revolution.

Even if you look at automotive digitalization, again, he said, you see a huge shift in the way that automobiles are being manufactured to operate. There’s also a lot of potential for the electricity sector, he added, to save money simply by employing the services that the telecom industry provides.

“All in all, I think we need to rethink our business model, and that’s the core of my message today,” said Dr. Biyari, adding that the telecom industry is yet to exploit the full value that it’s capable of. “I think the whole idea is to be optimistic in terms of our ability to capture significant value out of what’s happening around us,” he said.

The problem, Dr. Biyari suggests, is that many telecom operators are still operating in a very traditional way. They provide traditional connectivity services such as voice and data – but not much else. Some operators have been able to increase their revenues by becoming service providers, he said, so not only providing connectivity, but also providing managed services, cloud services, etc. But very few operators are venturing into the digital space.

“The digital space can be expanded into services such as connected schools, connected hospitals, participating in the e-commerce value chain, and many others,” said Dr. Biyari. “I believe that the majority of the telecom industry hasn’t embraced this change, with just a few becoming real service providers.”

“As we move to become digital players, I think we need to realize that we have what it takes,” he added. “Very few industries have what we have, especially with regards to financial stability of the industry in general which has always been solid.”

Another avenue for potential revenue, he said, is monetizing data, because the telecom industry has “tons of information that has not been exploited.” Dr. Biyari said, “If you just scratch the surface, you will be amazed by how much value you can create by utilizing the data available to you.”

“If operators really start embracing digital, I think we need to evaluate our core business and redefine our structures,” Dr. Birayi suggests. “Current networks that were designed for simple SMS and data transfer, for example, will no longer be able to cater for the explosion of data usage that’s coming. Therefore, the industry needs to go back to the drawing board to rediscover network design and how the cloud idea can be used to make our networks more efficient.”

Customer engagement is another area where the telecom industry can do better, he said. Telecom companies need to ensure that customer experience becomes a major KPI (key performance indicator) for all executives across the board. That’s the only way the industry can be successful as digital players. The internet players have shown how customer experience can be tackled, and the telecom industry needs to learn from them.
On top of that, the telecom industry needs to invest in the right talent, Dr. Biyari said. It doesn’t matter how innovative your network is or how excellent your customer experience levels are, if you don’t invest in the right talent. The industry, he said, needs to invest in transforming the work environment so that digital talent becomes available.

Another issue the telecom industry faces, said Dr. Biyari, is regulatory restraints. The industry is heavily regulated, he said, and policymakers have a busy road ahead of them as it relates to ensuring that the aforementioned benefits (highlighted in the study) can be discovered.

It’s important for government to be involved with digital transformation initiatives, said Biyari. That’s the only way for major transformations to take place. He also believes that telecom’s relevance as an industry needs to push towards that because “at the end of the day, if this agenda becomes a reality to the decision-makers, then lots of things can unfold in terms of our ability to contribute to the digital economy.”

STC embracing change
Speaking from experience, Dr. Biyari said STC has been transforming over the last few years in terms of how services are designed and executed, and how the company relates to customers. Embracing change, he said, has shown “significant results” for STC. When the company started its transformation around four years ago, its market cap has since doubled. That came about by means of embracing change.

“We looked at what customers really want versus what we have, and then looked at how we could change internally to make sure that those wants could be met,” said Dr. Biyari, emphasizing the importance of spreading optimism to customers. “You need to be a catalyst with government and society to make sure that their objectives are met – not only looking inward, but also looking to society and making sure that you are impacting positively.”
For the Kingdom of Saudi Arabia, which is STC’s largest market, the company has been “very active” in ensuring that the right jobs are created, said Dr. Biyari, emphasizing his previous point about the need for hiring the right talent.

The company has also invested in different areas. For example, STC launched a crowdsourcing platform recently in collaboration with the Ministry of Economic Planning to enable people to bring forth their business plans to gain exposure, so that their ideas will be evaluated and potentially get funding.

As the exclusive sponsor of the platform, STC will enable those innovators access to its cloud and all kinds of support, said Dr. Biyari, and then down the line the companies behind those ideas will be hosted on STC’s incubator/accelerator for startups called InspireU. If they are successful, the startups will be eligible for some of STC’s $500 million Venture Capital Fund.

STC announced the establishment of STV in May, a technology venture capital fund that aims to achieve its strategic growth aspirations and to help realize Saudi Vision 2030’s technological ambitions by investing in new digital areas and by growing the digital innovation ecosystem in the region.

STC believes the Middle East is witnessing a digital transformation that is full of opportunities in the digital economy and digital industries, and that the future involves drastic changes that will disrupt businesses across sectors. The company has intentions to be a serious world-class player in the space today. STV stands as the largest institutional technology venture capital fund in the Middle East.

“We are very proud of this historic step by STC, which will be a pivotal turning point for the region’s technology ecosystem,” said Dr. Biyari. “Global telecoms have two choices: to either change or evolve into digital companies or to convert into a utility. We have elected to go down the first route.”

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