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Thu 5 Oct 2017 01:30 PM

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It's time for Gulf telcos to adjust to IoT or risk getting left behind

Opinion: In a world of increasing inter-connectivity, telecoms has a daunting challenge - and an historic opportunity, writes Bernd Debusmann Jr

It's time for Gulf telcos to adjust to IoT or risk getting left behind
People and things: Our interconnected future relies on the ability of telecoms companies to keep pace with change

As the world continues to embrace the Internet of Things (IoT) in daily life and business, the region’s – and indeed the world’s – telecoms companies are left with two choices: adapt or die.

Slowly yet surely, we are beginning, or at least trying, to grasp the implications of IoT and what it means for us all, as we move towards a world of networked and embedded devices, which by some estimates may reach 30 billion devices by 2020. Everything from cars and refrigerators to industrial machinery, hospitals and even entire homes will be connected, collectively forming part of what has been dubbed the “Fourth Industrial Revolution”.

At the forefront of this monumental transformation will be telecoms firms. They are the ones who shoulder the burden of designing systems, ensuring reliability and safeguarding privacy. Essentially, making sure everything works as it should.

Doing so, however, will require companies to re-think their business models and strategies to cope with the almost unimaginable amounts of data that the world of IoT will constantly produce.

As Saudi Telecom Company’s CEO Khalid Biyari says in this week’s cover story, telecom companies need to move past “traditional” ways of operating, in which they offer voice calls, SMS, and “not much else”. Very few, he argues, are operating in the digital space that makes IoT possible. Business as usual is no longer possible.

Nowhere is the importance of IoT more evident than in the UAE and Saudi Arabia, where connectivity forms an integral part of their government’s long-term plans to shift away from oil-based economies in the future.

Fortunately, in many ways, the region is ahead of what Essam Al Tamimi, founder of the Gulf law firm Al Tamimi & Company calls “the curve of change” in this week’s issue. “There is a very good understanding [of change] in the community here,” he says. “The UAE wants to be a part of that.”

Moving forward, telecoms companies will need to formulate careful decisions on what investments are required to make such a connected world possible.

Doing so, however, will provide them with enormous opportunities to generate revenue from new streams. As Biyari notes, so far telecoms companies have only begun to “scratch the surface” of the value that can be gained from mining and analysing the aforementioned deluge of IoT data.

This adjustment, however, will not be easy, and will require telecoms companies to invest heavily in training new generations of employees who are up to speed with the new reality. It will be a very drastic cultural shift, but one that telecoms companies will need to embrace with open arms.

A cultural shift among customers is just as important. The general public will need to be aware of how IoT works, and, notably, the real value it has for them as individuals – which goes beyond the “cool” factor of, let’s say, a connected watch.

For a look at the real potential value of IoT, one need look no further than Saudi Arabia, where, in a particularly rain-prone area in the south of the country, sensors have already been planted in the ground. These sensors – which are linked in to a highly sophisticated environmental analytics system – can be used to help predict floods, giving residents vital time to prepare. The value of IoT, in this case, goes beyond dollars and cents. It saves lives.

Given the myriad applications of IoT that have already been conceived, and the countless more that people are yet to think of, the future of the telecoms industry is not in the telecoms industry as it is currently understood.

With an ‘Internet of Things’, these businesses must become the ‘Telecoms of Everything’.

Bernd Debusmann Jr, Arabian Business senior reporter