Table of Contents
This study is aimed creating a good understanding of telecommunication companies and challenges facing their operations. Telecommunication refers to the interchange or exchange of information by different kinds of technologies via electromagnetic systems such as the internet, telephone and radio networks and computer networks. The two main types of telecommunication are wireless and wired telecommunication. Telecommunication systems are used for communications such as phone calls, text messages, emails, downloading or viewing pages from the internet. A telecommunication company is an organization that develops infrastructure that enables data either video, words or audios to be accessible to all parts of the world. Telecommunication companies therefore make communications possible globally, whether through internet or phone, cables or airwaves and through wires or wirelessly.
The main aim of this study is to develop a clear understanding of Telecommunication companies, their operations, and challenges facing these industries. The study is also concerned with the future of telecommunication companies and the trends in this industry. A better understanding of these companies will enable us appreciate the efforts of these companies in ensuring that we can communicate with one another from any corner of the world. The case study of this research is the Emirates Telecommunication Company (Etisalat). This study is also vital since these companies deal with voluminous amount of information. This information includes both public and private information, statistics and other delicate information which if gets to the wrong hands may be tragic. The study will also promote maximum service delivery and customer satisfaction.
Emirates Telecommunication Company was established in 1976 as a joint stock- entity. The two partners included a local partner and a British company called Aeradio limited. This composition changed in 1983 when the United Arab Emirates Government had 60% shares in the company and the 40% shared by the public. In 1991, the government published a federal law which enabled the company to provide telecommunications both wired and wireless in the country and also with other countries. This gave the firm the right to give out license for manufacturing, importing, owning, and using telecommunication equipment. The federal law gave Etisalat both regulatory and control powers hence fostering its monopoly in the telecommunication industry in the country. An increase in exchange lines was experienced in 1998 and this was a major sign of the company’s growth and development. Emirates Telecommunication Company has three regional offices. Its headquarters are in Abu Dhabi with the two other offices in Dubai and Sharjah, in the Northern Emirates.
Etisalat became famous for its effort to distribute Fibre-to-the-home (FTTH) network in the UAE, where telephone penetration is ranked among the highest in the world at 200%. By 2009, this program reached 85% of households in the UAE. This positioned UAEs capital at number one country in the world with Fiber coverage. Today, Etisalat provide services such as, 4G Internet mobile access, Broadband Internet services, 3G mobile Internet access, pre-paid and post-paid dialup internet services. This company also controls a system of Wi-Fi hotspots (iZone), in locations including restaurants, sheesha cafes and shopping malls. iZone is accessible by either purchasing prepaid cards or using an existing account. Dial-up and ISDN Internet services are billed per hour while domestic and residential cables and DSL connections have a fixed monthly rate depending on speed.
Etisalat also operates a group of non-telecom businesses such as training and consultancy services, smartcard manufacturing and payment solutions, peering/voice data transit, data clearing house services call center, facilities management, cable TVs and submarine cable laying services. These activities support the company’s operations and provide support to organizations in the UAE. IN 2013, Etisalat introduced free national High Definition Calls across the UAE. Better IT services were later provided when Etisalat launched its first cloud service in the United Arab Emirates. Globally, Etisalat has offered its services in about 14 countries outside UAE and 1over 16 countries across the middle East Countries. It is the world’s leading telecommunication group in emerging market, with a market worth of $40.3 billion. Today Etisalat boasts of a portfolio of brands such as Etisalat Misr, Mobily, Ufone, Maroc Telecom, PTCL and Etisalat Afghanistan. In 2018, Etisalat made a major step up in the telecommunication industry by launching the first commercial 5G wireless connection in the UAE. It became the first telecommunication company in Middle East and North Africa regions to succeed achieving such a high-class technology. Etisalat Group has captured significant market share as it expands across Africa, Asia and the Middle East, most notably in Egypt and Saudi Arabia, where the introduction of innovative mobile broadband services has changed market dynamics and provided affordable mobile internet access for millions of people. Etisalat has also embraced Corporate social Responsibility throughout its market’s regions.
The telecommunication industry has seen various development and changes throughout the years. According to Kovacic (2014), Etisalat and Du are the two dominating telecommunication industries in the UAE. These two are government owned and ruled by the Telecommunication Regulatory Authority. Kovacs tries to evaluate how government policies impacted on the development of these companies and the telecommunication industry in General. Though most telecommunication companies were owned by the government in the past, private companies have come up strongly and are giving the government owned telecom entities a run for their money. According to Czarnecki & Dietz (2017), in the past, traditional—mainly government-owned—telecommunications operators were responsible for the technical realization of fixed-line and mobile radio communications. Their business model was based on long-term infrastructure investments that were financed through usage-based connection fees. Today, competitors of traditional operators do not necessarily require their own network infrastructure—such as, for example, Over-The-Top (OTT) providers. There are however several challenges facing these companies today. According to Ameen and Willis (2016), telecommunication companies are mainly faced with the challenges of high pricing, both of mobile tariffs and mobile phones and policing strategies. Munesh Jadoun (2020) states that the telecommunication industry is experiencing a transformational development phase to accustom itself with the rapid changing technology. A major development in this sector is the invention of ‘cloud’ in 2006. Jadoun (2020) further explains that in addition to these opportunities, telecommunication companies are experiencing several of challenges in this era. People’s ways of communication are changing, and this therefore requires telecommunication companies to reevaluate their delivery services to keep up with the rapid changes in communication. To stay afloat, telcos must adapt by investing and developing in suitable solutions to the challenges faced.
The main source of data collection used in this research was secondary data. Materials and documents on the telecommunication industries were reviewed and thoroughly analyzed including Etisalat’s e-documents. Thorough research and analysis and were done and contentious conclusions derived. The main source of the data collection materials was the internet.
This research established the various challenges and trends experienced by telecommunication companies today. The major challenges are as follows:
Policy making and Regulations- developing a transparent and efficient regulatory environment has become a major challenge to the telecommunication industry. Regulations which is done by the government at times cause disruptions and unbalanced market thus unfair competition.
Competition- in countries such as UAE where the government has major shares in the telecom industry, competition is usually low. This disadvantages the customers.
Pricing Strategy- high prices of tariffs and mobile phone handsets has
Government involvement- as seen in the case of Etisalat, the government has major shares in this company. This means that the development is slow due to bureaucracy in government procedures
Competitions from OTT Companies- OTT companies are mobile messaging apps. This is a serious threat because people are increasingly using message apps hence reducing valuable traffic from the telecoms’ text services.
Decrease in voice revenue- the communication industry is currently dominated by internet messaging rather than the previous voice and text
Developing 5G- 5G Networks is expected to improve not just the speed, capacity and latency of the spectrum and provide a browsing experience for users with less delay and unlimited connections. Telecommunications companies therefore are challenged with invest in these sophisticated technologies which are very expensive.
Mergers and Acquisitions- due to the rapid changes in technology some telecommunication companies are left behind due to their outdated technology. This has resulted to merges of some companies while others are acquired by bigger companies.
In conclusion, telecommunication companies must realize that people are changing their ways of communications. There is therefore need for them to improve their technology so as to cope up with the current market demands and competition.
To curb the challenges experienced, telecommunication companies should consider the following:
Ameen. N., and Willis., R. (2016). Current and Future Challenges Facing the Mobile Telecommunications Industry in the Arab World.
Czarnecki & Dietze (2017). Understanding today’s Telecommunications Industry. Retrieved from https://www.researchgate.net/publication/313012837_Understanding_Today’s_Telecommunications_Industry
Jadoun. M., (2020). Top 5 challenges & trends in telecommunication industry in 2020. Retrieved from https://www.racknap.com/blog/top-5-challenges-trends-telecommunication-industry/
Kovacs., A. (2014). Economic and Legal analysis of the United Arabs Emirates’ telecommunication Market