Nº 10 2012 > ITU Telecom World 2012 | Special report
Dubai welcomes ITU Telecom World 2012
ITU Telecom World 2012 was inaugurated by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, in the presence of high-level government leaders, industry captains, regulators and international experts.
Welcoming participants to the event, Dr Hamadoun I. Touré, Secretary-General of ITU set out his vision for the role that information and communication technologies (ICT) will play in facilitating delivery of the United Nations Millennium Goals of creating long-term sustainability.
“A promising and dynamic future lies before us,” said Dr Touré, adding that “mobile broadband, M2M, optical fibre and social networks define today’s networks. I foresee the least-wired regions becoming connected thanks to the miracle of wireless… I call upon you to be courageous in setting this brave new broadband world. Operators need to invest in infrastructure, governments and leaders must dream big. I would like to say that the leadership of Dubai has dared to dream big.”
Mohamed Bin Ahmed Al Qamzi, Chairman of the United Arab Emirates Telecommunications Regulatory Authority, described how the country had moved ahead, first to third-generation (3G) then to fourth-generation (4G) mobile communications, noting that providing better services was not simply about giving consumers the latest technology, but aimed to equip the national economy with the tools and people required to compete on the global stage.
Ahmad Abdulkarim Julfar, Chief Executive Officer (CEO) of the Etisalat Group, described how “ICT will tilt advantage towards the next global superpowers, because the ability of nations to compete has been based on technology.” He made the observation that increasing competition and growing risk were putting pressure on markets and margins, while over-the-top (OTT) players were requiring more infrastructure and consumers were demanding richer services. “A data tsunami is happening”, he said, adding that the right business model for collaboration would have to be found within that ecosystem.
Sheikh Abdullah Bin Mohammed Saud Al-Thani, Chairman of regional mobile operator Qtel Group, echoed those views. “Our ability to make the huge investment required depends on profitable networks”, he said, stressing the responsibility of governments and regulators, as well as of companies, for investment. All partners should work closely together to tackle concerns about international data roaming, to ensure that customers are not disappointed.
Forging the future
Setting the scene for the Leadership Summit, moderator Stuart Sharrock explained that the ICT industry was experiencing a major transition: revenues of traditional service providers were declining, demand for services was rocketing, traffic growth was phenomenal — and in many cases new global players were offering OTT services, at the expense of traditional telecommunication companies. All that was happening within the context of a major shift in consumer usage, as instant messaging and social networking increasingly replaced voice calls. “Voice is no longer cool,” he said, adding that “The decline of the voice model, which has served well for the past hundred years, means that a new model must be created, a new mechanism of communication and an industry structure serving that mechanism for the next hundred years.”
Dr Touré highlighted the importance of broadband networks and technologies as the enabler of that future. “We are living in the information society, and our next goal is the knowledge society, where everyone has the right to access information, to use information, to share information and to create information”, he said, calling for the creation of the right regulatory and legal environment in order for broadband — and the knowledge society — to flourish.
The need for the private sector to participate in the regulatory process was echoed by Eiichi Tanaka, Vice Minister for Policy Coordination at the Japanese Ministry of Internal Affairs and Communications, who referred to the close cooperation between government and business in dealing with the aftermath of the earthquake and tsunami that had struck Japan in 2011. Private-sector companies had provided database lists and information services, raising the matter of privacy and “how security can be maintained in close cooperation with the private sector, which manages the networks”, he said. “Rapid advances in communications call for reliable, high-speed networks to access, consume and respond to social and economic content”, said Mohammed Namadi Sambo, Vice-President of Nigeria. Investment in the ICT sector in Nigeria has seen astronomical growth, with over 105 million active SIM cards and over 45 per cent of the 165 million people in the country having used the Internet as of December 2011, according to Mr Sambo.
President Ikililou Dhoinine of Comoros called for the public and private sectors to come together not only to exchange views, but also to channel investment into the ICT sector in developing markets as the key to creating employment, wealth and well-being.
Dr Reza Jafari, Chairman and CEO of e‑Development International, highlighted the importance of considering children, consumers and environmental change, along with industry and regulation. “Dynamic, complex and multi-stakeholder ecosystems must have the consumer at the centre of the business model, must be driven by collaborative innovation and must embrace transformative, complex leadership styles”, he stressed.
Innovation is a key factor behind the explosive growth of the ICT industry. With more than 6.3 billion mobile subscriptions and 2.3 billion Internet users, the default access mode to broadband services was mobile, according to Ulf Ewaldsson, Senior Vice President and Chief Technology Officer of Ericsson. “Disruptive forces are changing everything”, he said. “For the normal smartphone user, voice is just noise. Business models have to change to create value in telecommunications and to provide a platform for network innovation”.
Osman Sultan, CEO of Dubai-based operator “du”, recalled that mobile telephony and social networking had changed the telecommunication industry through serendipity rather than strategic planning. “We do not know what the future will look like — but as leaders we are obliged to try to figure out some guidelines”, he said. Infrastructure would increasingly become a national asset, he predicted, as was happening already in countries such as the Republic of Korea, Australia and Qatar. Global governance would be necessary to allocate scarce resources and facilitate emergency and disaster relief.
Romain Bausch, CEO of SES, stressed the importance of open standards and collaboration. Satellite technology had an important role to play in the convergence era of telecommunications, provided that spectrum was allocated fairly and governments were encouraged to invest on a technology-neutral basis. He added that telecommunications can be efficient if industry players take into account how different infrastructure can complement each other.
Innovation in the telecommunication ecosystem
Different definitions of innovation set the scene for a very animated debate on the future of services, applications, carriers and business models in the ICT sector. Peter Bruck, Chairman of the World Summit Award, commented that innovation had moved from infrastructure and speed to applications and knowledge, and we need to understand what this means. Stressing that the single most important factor in successful innovation is localization, he said that “being grounded in a community, in a culture, and in the needs of the people there, is the only way to make innovation work. Zuckerberg’s Facebook grew directly out of the specifics of his environment, a US dormitory with strong peer groups and a tight community.”
Yaw Owuso, founder and Managing Director of Ghana-based Gateway Innovations, provided an example of localized innovation in Ghana — a mobile app that allows consumers to check an identity code on medication to establish whether it is genuine or fake.
Mr Bruck’s plea to the telecommunication industry and would-be entrepreneurs in general was to make innovation relevant to the local community. He recommended starting by developing ideas locally, then addressing regional needs and finally scaling up globally.
Didier Fass, Associate Professor at LORIA Nancy University, defined innovation as “a dream rationalized by creativity”, while Dr Ali Jazairy, Head of Innovation and Technology Transfer Section at the World Intellectual Property Organization (WIPO) quoted Eleanor Roosevelt: “The future belongs to those who believe in the beauty of their dreams.”
Funding the future
Successful broadband deployment depended on a mix of public and private funding, according to Eli Noam, Professor of Finance and Economics at Columbia University in the United States. Government subsidy tended to be the key mechanism for developing markets. Leading-edge investment was also dependent, to a degree, on government intervention since it was often viewed as too risky for private investment. In between was the mainstream, which was usually self-funding. A good example was mobile wireless in metropolitan areas where consumer interest was enough to attract investment.
As Luis Enriquez, a consultant with McKinsey, pointed out, the telecommunication industry returned 10–20 per cent of its revenues as capital expenditures creating future benefits — the highest percentage among all industries. “Operators need to work pragmatically with governments. For the regulator, this is not about free markets. If you do not include incentives, you do not get investments,” he said.
Another consultant, David Lewin of Plum Consulting, suggested that governments seeking to maximize telecommunication revenues should: invest to complement what market players were doing, without crowding out competition; evaluate demand-side measures; invest in affordable basic broadband for all, before seeking to fund next generation at higher premiums; invest in and support a mix of technologies — fibre in cities — satellite in rural areas; and avoid setting unrealistically high minimum speeds for broadband.
Professor Noam said that “A few years ago, it looked as if competition would always help create investment. But now, the sophistication of the market means that sometimes competition drives revenues down, resulting in a lack of investment and a lack of innovation.”
Zheren Ma, Head of Corporate Strategy at Tencent Technology, China, saw declining revenues at telecommunication companies coupled with fast-rising data consumption as creating conflict with the huge need for capital expenditure. “Many services have become extremely cheap or even free for many users, as new players rely on the massive use of data — which is sucking the revenue out of the traditional industry players. It also means that nowadays or in the near future, Google or Facebook, for example, will know more about a specific individual than any government”, he said.
Those trends have shifted value towards collecting and analysing data rather than providing services. They have also created challenges, because data security has to be balanced against consumer desire for free services.
Protecting the future
Implicit trust in the ICT sector is a cause for concern, said moderator Reza Jafari, Chairman and CEO of e‑Development International. “Where else would people so willingly provide a company with their family photos, the name of their mother and their home address?’’ he asked.
Companies and sites have been rapidly building valuable databases of detailed information on a scale never previously imagined. But the world of big data has been difficult to regulate and monitor, agreed panellists, not least because it is not always clear who is holding the data.
“You may be interfacing with an operator in one country, but you may have no idea what actually happens to the data you are providing them with,” said Christian Salbaing, Deputy Chairman of Hutchison Whampoa (Europe) Ltd.
“We all know that new technologies — like cloud computing and big data — are not a dream. They are coming and changing our everyday lives”, said Ming Xu, Vice President of ZTE Corporation, calling for more investment and research on new technologies and on where and how they converged.
Mohamed Al-Ghanim, Director General of the United Arab Emirates Telecommunications Regulatory Authority, said “The World Conference on International Telecommmunications in Dubai in December 2012 will be an opportunity to put these issues on the table. We need a global solution to these problems.’’
Rais Yatim, Malaysia’s Minister for Information, Communications and Culture, pointed out that data protection and control could have a significant effect on how future generations live their lives, setting the boundaries of what societies find acceptable and unacceptable.
Communicating the future
Moderator Klaus Leisinger, Chairman of the Novartis Foundation for Sustainable Development, challenged the panel to define a new leadership model and a new perspective on social responsibility in response to the opportunities and risks of the telecommunication industry today.
Keeping in mind the long— and short-term interests of society, establishing customer-centric models and treating employees fairly were ways to maximize shareholder value, according to Khalid al Ghoneim, CEO of Saudi Arabia’s STC Group.
Roberto Saracco of Italy’s EIT ICT Labs commented that, if left to the private sector, investment would be concentrated on revenue-generating hubs where large customer clusters were located. “Investment in infrastructure must be done — at a social level — by government”, he said, “Given the economic benefits of broadband, you can think of government investment in it as a way of subsidizing economic productivity.”
Balancing the competing interests of government, private-sector players and end users would never be easy. But as Mr Leisinger concluded, partnerships, dialogue and dilemma sharing were vital to creating a level-playing field, where competition and collaboration were balanced in what he thought would be “enlightened self-interest”.
Commenting on the debate on communicating the future, John Davies, Vice President of Intel’s World Ahead Program, said that new business models and the need for private-sector funding are the defining themes. The industry is moving from providing voice and data services to managing and profiting from data services. One idea was to provide tiered services, with basic entry to health care, education and government services, in tandem with higher cost access to specialized services.
A workshop for Young Innovators, run by Dr Hassan Zeineddine, Professor at the American University in Dubai, focused on management of the entire business process online. Another workshop on understanding investor expectations to create successful social enterprises was led by Laina Greene, mentor of the Young Innovators Competition. Finalists had the opportunity to pitch their winning projects from their stands in the Innovator Space, and take part in lectures in their workshop room.