Etisalat 'Gold' partner with Cisco

ABU DHABI // Etisalat moved further into the IT services market yesterday, deepening its role as a reseller of products from Cisco Systems, the networking and communications company. Etisalat's strategy is part of a broad industry shift in which telecommunications companies are looking to diversify their revenue streams. As the effects of competition and deregulation erode the profitability of voice calling, operators are trying everything from selling music and films to offering corporate IT services.

As the first telecoms company in the region to become a "gold" level partner of Cisco, the national operator will have access to better products and pricing plans, while benefitting from Cisco's marketing programmes and promotions. Abdulla Hashim, Etisalat's vice president of enterprise solutions, hopes to see his unit, which looks after the company's 200 largest customers, earn 20 per cent of its revenues from corporate IT services by 2010.

In overseas markets, which saw increasing liberalisation and competition earlier than the Gulf, large operators are already well into the transition to becoming diversified services businesses. "The same thing is happening all over the world," said Jean-Herve Jenn, the president of Convergys International, a technology services company. "The market matures and there is a huge impact on pricing. Soon, voice [calling] services are no longer all that matters."

Convergys, which works with Middle-Eastern operators such as Saudi Telecom and Telecom Egypt, helps telecommunication companies to upgrade their billing and customer management systems to enable a wider variety of products and services to be offered. Reinhard Haupt, the sales director for CM4all, a company that sells internet-based services to telecommunications companies, said operators needed to focus on offering new products that have a viable market of paying users.

Advertising-supported websites such as Facebook, YouTube and Google have made modern customers accustomed to high-quality services being provided free. "It is difficult to get them to pay for these kind of services," Mr Haupt said. Instead, he believes, the companies should try to market add-ons to mobile connections that they are positioned to deliver. A secure online storage area where mobile users can upload photos and address books directly from phones is one such example.

But making the shift from being an operator of a telecommunications network to the marketer of an online service competing with companies such as Google and Yahoo, comes with its own challenges, most agree. "We have seen few successful business models where operators get a cut of the content business," said Mr Jenn. "Culturally, they are network people, not media people, so it has been quite difficult for them to make the transition."

tgara@thenational.ae