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This study is aimed at 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 the internet or phone, cables or airwaves, and wires or wirelessly.
The primary objective of this paper is to develop a clear analysis of Telecommunication companies, their operations, and the 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 to 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 a voluminous amount of information. This information includes both public and private information, statistics, and other delicate information, which, when gets to the wrong hands, maybe tragic. The study will also promote maximum service delivery and customer satisfaction.
Emirates Telecommunication Company was established in 1976. It was established as a joint-stock company between two partners, including a local partner and Aeradio, limited a firm domiciled in Britain. In 1983, the ownership composition was changed when the UAE government acquired a sixty percent stake in the firm while forty percent of the shares were sold to the public. The government published a federal statute enabling the company to provide both wireless and wired telecommunications services in the country as well as other countries in 1991. The firm was granted the right to license for manufacturing, importing, owning, and the use of telecommunication devices. The federal law gave Etisalat both control and regulatory powers that fostered its development in monopolizing 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. Etisalat is headquartered in Abu Dhabi; the company has two more offices in Dubai and Sharjah in the Northern Emirates.
Etisalat became famous for its effort to distribute the Fibre-to-the-home (FTTH) network in the United Arab Emirates, where penetration of telephone is ranked to be among the leading around the globe at 200%. By 2009, this program reached 85% of households in the UAE. It positioned UAE’s capital at the number one country in the world with Fiber coverage. Today, Etisalat provides services such as 4G Internet mobile access, Broadband Internet services, internet access in 3G mobile, pre, 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 using an already existing account or purchase prepaid cards. ISDN Internet services and dialup are billed on an hourly basis, while residential and domestic cables and DSL connections are billed every month, and the rate is fixed on the internet speed of the different plans.
Etisalat also operates a group of non-telecom businesses, including; consultancy and training services, manufacturing smartcard, and providing payment solutions. Others include data clearinghouse services, peering/voice data transit, call center, management of facilities, cable TVs, and services for laying submarine cables. These activities offer support to the operations of the company and provide support to firms in the United Arab Emirates. In 2013Etisalat 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 the UAE and 1over 16 countries across the Middle East Countries. It is the world’s leading telecommunication group in the 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 the Middle East and North Africa regions to succeed in achieving such a high-class technology. Etisalat Group has captured significant market share as it expands across Africa, Asia, and the Middle East. The most notable include 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 the government-owned most telecommunication companies 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 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 to the rapidly 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 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. Telcos must adapt by investing and developing suitable solutions to the challenges faced stay afloat.
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:
Policymaking 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 the UAE where the government has major shares in the telecom industry, competition is usually low; this is a disadvantage for 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. It, therefore, 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.
The 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 to invest in these sophisticated technologies, which are very expensive.
Mergers and Acquisitions- with rapid changes in technology, some telecommunication companies are left behind due to their outdated technology; this has resulted in merges of some companies while bigger companies acquire others.
In conclusion, telecommunication companies must realize that people are changing their ways of communication. There is, therefore, a need for them to improve their technology 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