Telecom operators and content providers such as free-to-air (FTA) broadcasters should find a way to co-exist in the market, as convergence pushes their businesses together. This was the prevailing view of a panel discussion at the Arab Advisors Media & Telecommunications Convergence Conference, taking place today in Amman, Jordan.
According to Sam Barnet, COO, MBC, content providers offer strong branding and special skills that are useful to telcos. He also said while some operators choose to go along the path of content creation, he believes that this is a mistake.
"I think we should be friends; we have different capabilities and different skills. Our focus is on content, branding and the market," Barnet said. "Are there any areas we will compete on? In terms of aggregation, I think there's a temptation to go direct from the content source, rather than going through an aggregator like MBC. That is a mistake," he added.
But not all operators share the same conviction in co-operation, with many CEOs pointing to telco operators' traditional intransigence to working with others.
"These are two global industries who have been dancing around each other without a great success," said Ross Cormack, CEO, Nawras, the Omani mobile operator.
"In the mobile industry, we tend to feel like we own customers. One of the fundamental truths is the way we describe ourselves. We've always called it data and [typically,] we've been very defensive. We don't want to be bit-pipe providers and it has minimised the value we can add."
Both du's CEO, Osman Sultan, and his counterpart at Batelco, Peter Kaliaropoulos, said operators and providers should work together. But Kaliaropoulos said eventually operators needed to consider when to enter the content creation space. He also referred to a recent research paper from Booz Allen Hamilton which predicted that 3% of operators' revenues in the future will be derived from content.
"We need to coexist - we are part of the same ecosystem - but I believe we need to partner with people whose core business is the creation of content. But should telcos, especially smaller ones, take a gamble in investing in content creation? Do we want to be leading edge and risk a lot of investment or do we want to focus on taking content from a range of providers and deliver it as quick as we can?" Kaliaropoulos said.
Mickael Ghossein, CEO, Jordan Telecom Group, also sounded a warning to content providers, saying should providers not keep up with the pace of the industry, operators would go it alone.
"Media companies need to work fast for the operators, otherwise the operators will decide to create their own business space," he warned.
Most of the panelists did, however, agree that for the moment, the telco sector was undergoing a massive transformation, whereby much work needs to be done to establish workable business models.
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