22 March 2009
Middle East organisations are looking at subscribing to managed services in the telecom space, thereby reducing their capital expenditure.
"In these tough times companies don't want to invest millions of dollars in equipment and would rather pay a flat fee," Lionel Reina, Vice-President and General Manager of Orange Business Services in Eastern Europe, Middle East and Africa, told Emirates Business. "This includes equipment and services as a turnkey package, helping the companies focus on their core business. When business is good telecom and IT expenses are always considered at the end and are 10 to 15 per cent of the total cost."
Managed services is the practice of transferring day-to-day related management responsibility as a strategic method for improved, effective and efficient operations.
The real estate segment is a potential customer and would require such services in the long run.
"According to our research the real estate industry over the next 10 years is worth a trillion dollars. IT and telecom would be a significant part of this. A lot of national and large organisations would convert to IP-based and eventually managed services," said Reina.
In a difficult economic situation companies are looking at consolidating assets and Orange helps CIOs and CXOs in this regard, Reina said. "We are letting them know what are their assets and helping them to optimise them. Companies are not looking at cost cutting but more at consolidation. In the telecom space this will include services and simplify the way they handle or pay for them," he said.
Managed services help companies manage their infrastructure and also help them move to an IP-based network, thus decreasing cost over a period of time. A company can save 15 to 20 per cent of cost on infrastructure over a period of time. For example Orange is providing global telecom network for United Arab Shipping and also interconnecting Carrefour outlets across the Middle East.
"It's not about providing services but developing services over the network. A few companies are providing e-learning solutions on the network, helping employees get training while remaining in the office," said Reina.
Five years back the scenario in Europe was similar to today in the Middle East. But now Europe is 90 to 95 per cent IP based. "Regulations have to support managed services and operators are working on this to provide end-to-end services. We are working very closely with etisalat for the past seven years on network managed services," he said.
Organisations have been growing organically or non-organically through acquisitions in the region and therefore making it important to enhance infrastructure as they grow.
Historically Orange has worked on interconnecting airlines and banks. "Whenever there is an incumbent operator an interconnection is required with Orange. In the region, over the past five years, the business model has evolved as the telecom sector has grown strong. This has made us focus on enterprise managed and network services," said Reina.
While the business services division of France Telecom foresees managed services as the future, it has been working on modernising infrastructure with local telecom operators.
"Omantel developed its ADSL network in consultation with us to offer connections of up to 16MB for businesses. Even in real estate there are services that could be helpful such as broadband network and the first IP TV established at City Centre in Beirut," said Reina.
Orange started to focus on emerging markets two and a half years ago. "We believed the market dynamics were different compared to the rest of the world and what we have seen in the past 10 years is a boom. Enterprises have developed tremendously, launching new real estate projects and telecom operators have been launching projects based on regulations. These projects will eventually lead to IP transformation," he said.
Reina does not see the economic crisis affecting any telecom investments in the region. "While you see companies in mature markets struggling and looking to cut costs in all possible ways, in the Gulf it is the opposite. Here companies are investing more wisely while continuing the transformation of the telecom infrastructure and preparing for the after effects of the crisis. Dubai is in a growth mode as the GDP is set to grow by three to four per cent this year. Therefore, it is not a crisis but an adjustment," he added.
Middle East organisations are looking at subscribing to managed services in the telecom space, thereby reducing their capital expenditure.
"In these tough times companies don't want to invest millions of dollars in equipment and would rather pay a flat fee," Lionel Reina, Vice-President and General Manager of Orange Business Services in Eastern Europe, Middle East and Africa, told Emirates Business. "This includes equipment and services as a turnkey package, helping the companies focus on their core business. When business is good telecom and IT expenses are always considered at the end and are 10 to 15 per cent of the total cost."
Managed services is the practice of transferring day-to-day related management responsibility as a strategic method for improved, effective and efficient operations.
The real estate segment is a potential customer and would require such services in the long run.
"According to our research the real estate industry over the next 10 years is worth a trillion dollars. IT and telecom would be a significant part of this. A lot of national and large organisations would convert to IP-based and eventually managed services," said Reina.
In a difficult economic situation companies are looking at consolidating assets and Orange helps CIOs and CXOs in this regard, Reina said. "We are letting them know what are their assets and helping them to optimise them. Companies are not looking at cost cutting but more at consolidation. In the telecom space this will include services and simplify the way they handle or pay for them," he said.
Managed services help companies manage their infrastructure and also help them move to an IP-based network, thus decreasing cost over a period of time. A company can save 15 to 20 per cent of cost on infrastructure over a period of time. For example Orange is providing global telecom network for United Arab Shipping and also interconnecting Carrefour outlets across the Middle East.
"It's not about providing services but developing services over the network. A few companies are providing e-learning solutions on the network, helping employees get training while remaining in the office," said Reina.
Five years back the scenario in Europe was similar to today in the Middle East. But now Europe is 90 to 95 per cent IP based. "Regulations have to support managed services and operators are working on this to provide end-to-end services. We are working very closely with etisalat for the past seven years on network managed services," he said.
Organisations have been growing organically or non-organically through acquisitions in the region and therefore making it important to enhance infrastructure as they grow.
Historically Orange has worked on interconnecting airlines and banks. "Whenever there is an incumbent operator an interconnection is required with Orange. In the region, over the past five years, the business model has evolved as the telecom sector has grown strong. This has made us focus on enterprise managed and network services," said Reina.
While the business services division of France Telecom foresees managed services as the future, it has been working on modernising infrastructure with local telecom operators.
"Omantel developed its ADSL network in consultation with us to offer connections of up to 16MB for businesses. Even in real estate there are services that could be helpful such as broadband network and the first IP TV established at City Centre in Beirut," said Reina.
Orange started to focus on emerging markets two and a half years ago. "We believed the market dynamics were different compared to the rest of the world and what we have seen in the past 10 years is a boom. Enterprises have developed tremendously, launching new real estate projects and telecom operators have been launching projects based on regulations. These projects will eventually lead to IP transformation," he said.
Reina does not see the economic crisis affecting any telecom investments in the region. "While you see companies in mature markets struggling and looking to cut costs in all possible ways, in the Gulf it is the opposite. Here companies are investing more wisely while continuing the transformation of the telecom infrastructure and preparing for the after effects of the crisis. Dubai is in a growth mode as the GDP is set to grow by three to four per cent this year. Therefore, it is not a crisis but an adjustment," he added.
By Nancy Sudheer
© Emirates Business 24/7 2009
