13 February 2018 - Telecommunication Development Directions in Digital Transformation

Fuad AllahverdiyevBy Fuad Allahverdiyev

Chief Executive Officer of “AzerTelecom” LLC

Global telecommunication sphere is dynamically growing. The acting companies and different government regulatory agencies strive for broader development borders, long-term and reliable relationships between market players and customers. Meanwhile, the governments also pay more attention to the use of new technologies.

Mobile technology exceeding all boundaries, wider coverage of LTE technology, service virtualization, cloud technologies, Big Data and analytics development, IoT (Internet of Things) and M2M (Machine to Machine) conceptions, cyber security – today’s very significant issue dominate in the global telecommunication development. Telecom already penetrates into all possible fields, smart technologies become an integral part of human life. All these updates lead to the important growth in information and communication technologies. Here various business models are also provided.   

New development trends lead to digital transformation

As seen in the global practice, in the current dynamic development background the earnings of telecom companies are based mainly on innovative projects and such as FBB (Fixed Broadband Business), FMC (Fixed Mobile Convergence), Cloud technologies, MFS (Mobile Finance Services) and different applications. Thus, earnings from conventional services (fixed line, traditional cable TV and mobile communication) are gradually diminishing and replacing with Internet technologies, IoT (Internet of Things), new services like OTT (Over the Top – innovative multifunctional television), M2M (Machine to Machine), FinTech (Financial technologies), MFS (Mobile Finance Services). Under such circumstances new digital services become more developed services, so all companies are involved in the digital transformation process. Under new circumstance the integration and consolidation processes are going on in the market, operators enter the digital market segment, major market players grab minor players, large-scale holdings diversifying its activities are established. Telecom market analysts consider these tendencies as a right and natural process, and emphasize that this will continue also in the future and used in different regions of the world.

The issues such as customer-oriented telecoms, one-click services and social multichannel communication strategy become topical. That’s why the companies shall make changes firstly in their operation processes. Companies have to run business adaptation process based on regularly changing customer needs, improve the business models, become more easily accessible and capable companies providing multiple services with single package and of course, pay special attention to infrastructure building and upgrade.

At the moment the telecommunication is one of the rapidly developing sectors over the world. According to the statistical data, total income from the telecommunication services is expected to grow by 1 trillion 196 billion Euros in 2019. Researches show that Asia Pacific Ocean was the most rapidly developing region in telecom sector in recent years, in 2015 an income here was 375 billion Euros. According to the GSMA “Mobile Economy 2017” report, the world’s mobile subscriber base has reached to 5 billion in 2017, by 2020 this will grow to almost three-quarters of the world’s population or 5.7 billion people, mobile broadband connection to 73%. Asia will be the primary driver of this growth and only in India there will be 310 million new unique subscribers in the next three years. The report also indicates that total number of jobs directly and indirectly supported by the mobile ecosystem will be 30.9 million. Operator CAPEX by 2020 will grow up to USD 700 billion.

Reputable “McKinsey & Company” gives several interesting information with regard to the current development tendencies. Stated that the company managers have to take serious steps and pass through transformation processes to add value. According to the company researches, use of new technologies and digitization will enable companies to optimize business operations and reduce the expenditures, so that customers are satisfied, sales grow. There is less reasons for wireless operators not to take these steps or wait so far, since all required technology and management methods are already available. “Deloitte” also predicts with regard to the technological development. The Company notes in its “Technology, Media and Telecommunication Predictions 2018” report that in 2018 live streaming and events in online world, also content on demand in the digital platform will bring significant incomes.  

Local companies should not be outside the global development

Dynamic global telecommunication development’s effect is inevitable also in Azerbaijan, leading telecom actors in Azerbaijan – mobile operators, backbone providers, internet service providers, conventional and new generation cable operator televisions etc. shall not be outside these processes and have to use a development strategy in line with the new era requirements. In the upcoming period, the companies have to widen their client base, provide new innovative telecommunication services to socially active customers, propose products for the ICT development in the country, as well as products to be competitive in foreign markets. Azerbaijan has all opportunities to become a digital hub. This is evidenced by application of high technologies, organization of significant events in the country, vital government decisions made towards telecom development.

Recent measures and projects implemented towards ICT development will enable in country knowledge based economy development.  This will lead to more agile human and business. A new development strategy supported by the government in accordance with post-oil period requirements, sustainable and stable development vision in line with the new era needs will enable society and government stable development, use of innovations, business environment development and new investments along with creating a new telecom ecosystem in Azerbaijan.  

Large scale application of this strategy modifies the traditional telecommunication architecture, paves the way for updates and also enables a new digital behavior culture within the population.

About the author: F.Allahverdiyev has got more than 20 years’ experience in telecommunication, was a founder of different start-ups and several successful ICT companies. In various years F.Allahverdiyev was a head of telecom companies such as “Caspian Telecom”, “Ailə TV”, “Ailə NET”, “CONNECT”. He graduated from the Applied Math, Baku State University and “MBA Executive” program at the reputable Moscow State University named after M.V.Lomonosov. At the moment, F.Allahverdiyev is a CEO in “AzerTelecom” LLC, a backbone internet provider connecting Azerbaijan to the international internet network. The company provides services such as: wholesale internet, leased line, mobile backhaul, international transit, SIP telephony, FTTx, Corporate network and other advanced ICT services and applies the global telecom innovative approaches in the country.