KARACHI: A new era of cut-throat competition is opening up for telecoms in Pakistan, except this time the throats they have to cut in order to survive may well be their own.
For a number of years, revenues that the telecoms earn from voice and short messaging has been declining sharply, while data usage from smartphones has been growing. Data packages cannot pay for the massive hardware investments made by the companies, so the search for new business models to carry the industry into the future of communication and connectivity is on.
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Most recently, Jazz (the company formerly known as Mobilink, which acquired Warid), has placed a high stakes bet on a new application that it believes will become the next generation of communications in Pakistan. Known as Veon, the application is designed to get to know the user with time, and with the help of an artificial intelligence engine, it can become predictive and fulfil the users requirements even before those requirements have been entered into the system.
The new application, launched early in October, racked up one million downloads as of Oct 31, in the first three weeks of its launch. But it raises powerful questions, for both the provider and the user. First amongst those is privacy. How far does the responsibility to protect customer privacy, and constitutional freedoms such as free speech, now fall upon the service provider with the introduction of these new applications?
The other big challenge that the move into hosting communication platforms throws up is to the business model of the telecom itself. Surprisingly, Jazz has decided to keep Veon, a platform developed by its own parent company for global rollout, open for anybody using any telecom service.
This platform is where the company future revenue stream is supposed to come from, rather than the more bread and butter provision of telecom services such as voice, messaging and data. But the bulk of the company’s investments are still in its hardware. What does this mean for the future revenue stream of the company?
In a wide-ranging conversation about the move into the next generation of communications, Jazz President and CEO Aamer Ibrahim told Dawn that there is a big idea at play here: where is telecom now in its journey from when it began? Today “the customers’ loyalty is no longer with the service provider,” he argued. “It is with social engagement platforms and handset manufacturers,” he said. “We are becoming more and more irrelevant as service providers.” He likens living off revenues from the provision of telecom services to trying to live off the tolls from a road.
“Now the OTTs, as we call them, the over-the-top players, are coming to steal our lunch, because people cannot live without applications like Whatsapp or Facebook, but they can throw my SIM and put someone else’s SIM.” The new revenue stream that the company is staking is future on, therefore, will come from the targeted ads that this platform makes possible.
But how much of the responsibility to protect customer data now devolves on the service provider with this move? “None,” he answers initially. “We have responsibilities to ensure that we do not give access to our customers’ data to the wrong people, information about who has the SIM, who they called, what website they went to, that data we hold sacrosanct. But once you paste something on Facebook, let’s say, then it is outside of my control.”
But with Veon, his company is evolving beyond just being a service provider and towards hosting a platform as well. Does such a responsibility, to protect customer data, come with that role?
“Yes, I would say a greater responsibility comes compared to a typical telecom service provider,” he agreed. “We need to think deep and hard on what is our changing responsibility towards our customers”.
Published in Dawn, November 1st, 2017