Major Gulf telecom operators in the Middle East have gained a new lease of life by actively investing in in-house enterprise technology expertise through both partnerships and acquisitions of start-ups, according to research conducted by GlobalData, a leading data and analytics company.
Ismail Patel, Research Analyst at GlobalData, comments: “A recurring feature across all operators in the Middle East is that they are divesting away, wherever possible, from less profitable ventures and ploughing savings into next-gen enterprise tech. Telcos in the region now have a new lease of life beyond being just connectivity and entertainment providers, as they seek to justify their investments into 5G networks through various partnership initiatives and cloud and IoT solutions that would not have been possible even a few years ago.”
GlobalData analysis has aggregated and analysed examples of such strategic divestments, capex, and investments. Such cases include Ooredoo pulling out of Myanmar as it sharpens its focus on growth areas; Zain consolidating most of its non-consumer services under its ZainTech brand and adopting an integrated enterprise strategy for all its units; and stc spinning off its data center business to fund in-house expertise through partnerships with the likes of Nokia and Telefónica. In line with international trends, tower sale-and-leaseback has also been a popular strategy, which is adopted by stc, Ooredoo, Omantel, and Zain.
Rob Pritchard, Senior Analyst at GlobalData, observes: “This refocusing of strategic intent reflects the broader trend for telcos to offer more value-added services and absorb or share the cost of investing in new 5G and broadband infrastructure.”
Patel concludes: “2022 saw double-digit growth in the operators’ enterprise business segments wherever reported: 28% for Zain Group and 14.5% for e&. The latter is confident it will double its enterprise revenues from 2022 to 2025. GlobalData expects this business realignment by the telcos and revenue shift to B2B to continue into the medium term, with more tech launch announcements, partnerships, and collaboration between Middle Eastern operators and their international counterparts, smart tech solution firms, and network vendors.”
