“Incumbent telecom operators never participate in the innovation game”
Dov Bar-Gera has co-founded, built and successfully exited numerous start-ups in the field of telecommunications and technology, including WiMAX Telecom, SurfEU AG, RSLCom Austria and Airpage, the first private paging operator in Austria. He is now Group CEO of YooMee Africa, a regional 4G/LTE operator in West & Central Africa.
Dov will be a speaker at Connecting West Africa in Dakar, Senegal, on 9-10 June, sharing his experience on models to deploy 4G/LTE in West & Central Africa. Here are some of his views ahead of the event.
Connecting West Africa: What is YooMee’s position in West Africa’s market?
Dov Bar-Gera: YooMee Africa aims to enlarge its foot print in the region and to enter new markets. YooMee’s objective is to become the leading provider of high speed mobile internet access to the people and businesses in the region as we do already in Côte d’Ivoire and Cameroon. We offer a large variety of value-added services designed to improve the profitability of businesses or quality of life of YooMee’s subscribers. Our offerings are affordable, reliable, mobile wireless broadband internet connectivity, using 4G / LTE technology, with exceptional quality. The company is committed to help close the digital divide.
CWA: What services will enable telecom operators to generate revenue from data?
DBG: It is the key question: what are the revenue drivers in the coming 5 years in such a fast changing market? In a world driven by players like WhatsApp proposing free voice and video communication, a world where international business communication with video conference and document exchange is offered free of charge by Skype, users who are consuming 90% of the capacity for video, operators live in constant instability and uncertainty.
Pure players like YooMee Africa are growing thanks to this instability. We maximize the capabilities of the consumer to engage with the changing world and to enjoy the new offerings. YooMee’s job is to ensure fast, stable and top quality connection to the world wide web independently of disruptive new applications or services.
Over time, YooMee Africa will accelerate the arrival of these new applications into the markets and enable the business and residential internet users to buy all services from one provider.
CWA: Is 2015 a pivotal year for the region’s digital development and why?
DBG: The digital world in our region is unfortunately still away from the “pivotal year”. As long as telecom regulators are not confronting the incumbent operators with their abusive business approach, markets will not develop. Access to international capacities is controlled by a monopoly or a duopoly with absolute prohibitive prices. Fiber optic intercity capacities are not based on market prices but on installing barriers to the competition.
Once the political decision makers and the telecom regulation agencies will put the emphasis on competition and consumer advantages, we will be at the “pivotal year”.
CWA: What will be the impact of the digital transition on the telecoms and media sector?
DBG: The telecom sector will change dramatically. The disappearance of dial-in voice and the conquest of the consumer by VOIP will hit the bottom line of the MNO in the long term. Also the independence of the consumer from the classic phone number will boost the so called “provider jumpers” and reduce subscribers loyalty. To communicate over Apple’s Facetime or WhatsApp you do not need a phone number nor a mobile subscription. And you communicate at top quality for free.
4G networks will start to transport on-demand rich content and allow consumers to watch video content, movies, series or the news independently of the transmission time fixed by program providers. The buyer will insist to have a multi-screen environment that the classic TV stations can’t offer. The content must be adapted to a smartphone screen, a tablet and the TV at the same time. I doubt that the classic TV program operator has the understanding or the means to do so.
In the near future content will be delivered mainly through wireless and mobile 4G network operators. These operators will be the interface between the content owner and the consumer and will charge both sides.
CWA: What are the lessons learned from the first LTE deployments in the region?
The biggest hurdle and most expensive cost item remain the access to the international bandwidth. Otherwise, markets are ready to embrace the services of the newly launched 4G networks. YooMee is the proof.
In our region, consumers still do not differentiate between costs of entry and total costs of ownership. Consumer are still driven by a lower costs of the devices compared as by lower costs of monthly usage per megabyte. The price of LTE devices is still quite high as we are talking about a new technology with relatively small number of users compared with 3G.
CWA: What are the regulatory requirements for improving affordable access to high speed networks?
- License costs
- Regulation of the price of international bandwidth and access to submarine cable
- Issuing of 2.3 or 2.5 GHz spectrum to new market entrants and a smaller block of paired spectrum in the 700MHz for suburban areas
CWA: What are the communications needs of enterprise and how to meet them effectively to sustain economic growth in the region?
Fast internet and sufficient volume to introduce internet usage in many different sectors will contribute to a sustainable economic growth. The service quality YooMee offers to its business customers, has the goal to enable these customers to develop following applications: e-commerce by offering their own products and services to a large community by using the internet and having even a global reach; online payment capabilities like the PayPal application offered by YooMee to receive money from their clients and or to pay vendors; skip investments in unnecessary CAPEX like PaBX by using virtual VOIP switches; communicate with customers through high definition video instead of expensive and inefficient travelling.
The availability of real broadband internet will accelerate the introduction of these services and possibilities creating an unstoppable economic drive.
CWA: Are telecom operators facing a lack of innovation? How can services innovation be encouraged?
Incumbent telecom operators never participate in the innovation game. They are by definition followers and they are cash rich. As they are capable to understand that they have missed the entry but don’t want to miss the party, they will acquire the players that are already in the party.
Innovation is a cultural issue. A company is either an innovator or it’s not. To become innovation driven, market conditions must be adapted: access to funding even though the risk profile of innovation is higher, tax regulation must allow funding of innovation to be fully tax deductible, change of attitude to understand that -unavoidable – failure of an innovative project is just a step in the right direction.
CWA: In your opinion what are the most interesting debates to expect at Connecting West Africa this year?
How can regulators finally terminate the oligopolistic situation in international bandwidth resulting in major price drop for the business and residential consumer.
Another subject is the need to regulate very quickly issues like the introduction of MVNO in our region. •
Neolectum is proud to support Connecting West Africa 2015
9-10 June 2015 at Dakar, Senegal