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Shrinking the size of the business world in the Middle East & Africa

August 19, 2014 • Opinion

Mark McCallum

Mark McCallum, Head of Global Services for Orange Business Services, Africa.

For the thousands of international and domestic businesses operating in Middle East and Africa (MEA), the region has moved from an emerging market to that of a high-growth market. Certainly from a telecoms perspective and according to new research from Analysys Mason, telecoms revenue in North Africa and the Middle East is set to grow by 27% to over 96.4 billion USD in the next five years.

In Africa, the opportunity is defined around rapid economic growth, new democracies and urbanisation. In the Middle East, although economic growth is well established, we are increasingly seeing new markets opening up to competition. But as varied as these regions may be, there is a fundamental and common issue – the need for consistently good infrastructure. We are increasingly seeing businesses operating in these regions demanding increased cost-effective communication technologies to help ensure macro-economic growth translates into tangible business opportunities.

High connectivity in developed markets has in many ways “shrunk” the perceived size of the business world by enabling multinational organisations (MNOs) to conduct business internationally, but with the same ease as doing so locally. However for businesses operating in high-growth markets such as those in the MEA region, the business world can seem very large in the absence of robust infrastructure.

MNOs have traditionally struggled with reliable telecommunications support across such a wide region. Yet in an age where distance is no longer a barrier to customers, it is no longer acceptable to have nuances within a brand across different regions when the key to success is demonstrating a uniform and consistent service globally.

There are a myriad of challenges to organisations aiming to achieve this consistency including remote or offshore sites and limited availability of terrestrial coverage and energy supply levels. There are also issues around the patchwork of providers and local regulations which are often complex and lack a streamline approach. Another challenge is the uncertainty of delivery or service level agreements and erratic security and compliance procedures.

However before tackling such challenges, organisations and network providers alike must recognise that high-growth markets require tailored and smart approaches to account for variability as well rapid change. Growth opportunities in MEA, for example, are rapidly moving beyond the largest urban areas, into attractive second and third-tier clusters, driven by rising incomes and burgeoning industries, such as automotive and consumer products. As a result, we are increasingly seeing MNO’s seeking network operators that not only provide a secure, robust network but a partner that will help navigate compliance, regulation, security and service levels when dealing with customers, suppliers and authorities.

Consider the case of Kordsa Global, a Turkish-based fabric and cord producer which has expanded its operations globally and currently employs 4,500 people in countries as far apart as Argentina, China and Germany. It benefited from a fully managed global IP Virtual Private Network to link its 11 sites around the world to ensure high availability and performance of business critical applications. End-to-end connectivity has given Kordsa a stable, reliable infrastructure with 24/7 monitoring, reporting and troubleshooting support, as well as the ability to rapidly deploy value-added services such as data and video.

Delivering robust infrastructure to the region is crucial to the region’s economic growth and we are already seeing positive progress in projects enabling this. For instance, in the past few years we have seen the implementation of submarine cables projects such as LION2, have helped connect businesses in North Africa, enabling them to grow and operate on an international basis.

The ACE submarine cable has been operational since December 2012 and will extend as far as South Africa for the second phase, provides connectivity to broadband internet in Africa and will add extra capacity to existing international networks. The ACE contributes  to the development of multinational companies present in Africa by improving connectivity between the local subsidiaries and their global networks, allowing  them to develop added-value services in areas such as Unified Communications, IT and customer relations.

Challenges still exist in delivering connectivity at a price that makes it attractive for organisations and local Internet Service Providers and other service providers to develop – but the trend is undeniably upward providing telco providers continue to support the provision of a network infrastructure that supports the whole region and not just geographically and politically suitable markets.

The strong network infrastructure that has already being implemented is the first step in helping “shrink” the perceived size of the business world for organisations operating within the region. The next step will be to build upon this success to help organisations capitalise on the opportunity and innovate new solutions to help these organisations leverage the network.

Mark McCallum, Head of Global Services for Orange Business Services, Africa

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