Social networking sites such as Facebook and Skype should contribute to the billions of dollars worth of telecommunications infrastructure needed to access their sites, the CEO of Ooredoo Oman has said.
Greg Young told Arabian Business websites and mobile phone apps such as YouTube and Whatsapp put a substantial amount of pressure on telecom providers’ infrastructure at the same time as robbing them of traditional revenue from text messaging and voice calls.
However, such sites have not contributed to the huge, and ongoing, cost of providing the necessary infrastructure.
When asked if they should, Young said: “I do. I do.
“They certainly drive up usage and they also in some cases change usage patterns and that’s one of the challenges we have because we have to plan our network. If you have a large surge in YouTube activity, for example, in a particular area at a particular time of the day, we have to build our networks and adapt our networks to reach that capacity.”
Ooredoo Oman, which was rebranded from Nawras last week, has invested about 30 percent of its revenues into upgrading infrastructure in the past two years.
The decision saw the company, Oman’s second-biggest mobile operator by market share, record an annual profit of 33.1 million rials ($85.99 million) last year, from a high of 50 million rials in 2010.
The investment has begun to pay off, with a 23 percent rise in the 2014 half-year profit.
Young said the significant use of social media and other sites drove up data revenues, making each reliant on the other for profits.
Ooredoo Oman expects data services to account for more than half its consumer revenue within two years.
However, social media websites, which are often free or available at a minimal cost, were “avoiding” contributing to the infrastructure that gave customers access to their sites, he said.
“They will continue to do that but there’s a growing trend from other, larger telecommunications brands and entities to really bring to the table [tougher negotiations],” Young said.
“We have grown and generated additional business as a result of these companies, but likewise without our telecommunications structure many of these would not exist. I tend to think of it as we have to co-exist in a harmonious and a mutually profitable way because if we can’t continue to invest in the capacity of our networks they’re not going to see the growth; they’re going to see customers that are dissatisfied with the quality of service when they’re accessing their applications.
“And that’s a very, very important matter that really is facing all telecom operators and these applications because many of those applications really are driving significant demands in capacity and very, very different usage patterns.”
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