Cashing In on Business: The Enterprise Opportunity for MENA Telecom Operators [REPORT]

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This report, published by Strategy&, highlights the growing opportunity for Middle East and North Africa (MENA) telecom operators to expand their business alongside a budding ICT market in the region.

As the report details, telecom operators have distinct advantages over competitors including established customer relationships, multi-platform network infrastructure, and reach, as well as having strong brands and access to capital. However, the report also outlines several challenges that must be overcome in order for telecom operators to capitalize on the market.

Download the report below to read more about how MENA operators can take advantage of a growing ICT market.

Executive Summary

The enterprise, or business, segment presents MENA telecom operators with a large potential growth opportunity. In other parts of the world—such as Europe—enterprises account for an average of 17 percent of telecom operators’ revenues. Although the business segment has yet to contribute that much for operators in the MENA region, the regional enterprise ICT market is sizable, and growing at such a rapid clip that it should come close to doubling within five years. The number of enterprises in the MENA region will increase, and so will their spending on ICT, until it approaches that of their peers in Europe and the U.S. The spending increase is driven by a sea change in mobility and cloud computing needs, as well as the desire for unified and collaborative services such as enterprise social media, as smart phones and tablet PCs have gained popularity.

Competition will be intense; business communication equipment vendors, ICT service providers and system integrators, and software and online companies all will seek to grab a share of the MENA region’s fast-growing enterprise ICT opportunity. Telecom operators, how­ever, have several distinct advantages. They already have established customer relationships, large-scale project man­agement experience, multi-platform net­work infrastructure, and reach. Telecom operators also have strong brands and access to capital.

Despite those advantages, MENA opera­tors will not automatically win enter­prise customers. Operators will need to change their service delivery approach and create a new value proposition. They will need to refocus efforts to capture the opportunity presented by the creation of millions of new small and medium-sized enterprises (SMEs) over the next several years. They need to expand their offering to lock in key accounts among large enterprises and leverage their incumbent position with government agencies to capture large-scale digitization opportunities. Operators also should benefit from con­verging consumer and enterprise offer­ings, leveraging consumer relationships to win enterprise business, and gaining new customers from business clients. If successful, regional MENA opera­tors will tap into a growth area, fueling substantial gains for years to come.

Key Highlights

  • The number of enterprises in the MENA region will grow at a 10 percent annual rate through 2014—creating almost 4 million new businesses.
  • Enterprise revenue accounts for an average of 17 percent of revenue among major European telecom operators; for some, it is as high as 25 percent. This suggests upside potential for MENA operators.
  • Enterprise customers are increasingly sophisticated in their needs, specific in their requirements, and quick in embracing new communication devices.
  • Mobile and converged communications, as well social media and cloud computing, are driving enterprise ICT demand.
  • Operators can leverage their strengths to grab share in the rapidly growing SME segment, lock in key large accounts and large-scale digitization projects, and benefit from converging consumer and enterprise offerings.

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