Archive

Archive for August, 2011

Why waste a perfectly good monopoly?

August 31, 2011 1 comment

In general, telecom operators in the MENA region have a very sweet deal. They are either operating as monopolies, comfortable duopolies, or are in markets where the incumbent was heavily entrenched before deregulation kicked in. They regularly rake in massive profits and many have stockpiles of cash. Yet, what are they doing with this cash? Where is the feedback loop that is taking this cash and injecting back into the economy to drive innovation and support the development of new ecosystems? In competitive markets, telcos have tried to innovate with mobile operating systems, mobile payment mechanisms and mobile content distribution. Unfortunately in MENA, most seem to be content to just upgrade their networks to faster speeds using technology developed elsewhere. Don’t get me wrong, telcos in the region have done much to increase access to information and allow people to connect, but they have in general failed miserably in making an impact that is proportional to the billions they have collectively made in profits over the years. Where are the Arabic operating systems? Where are the unified payment mechanisms to enable e-commerce? Where are the funds for launching mobile and online startups? So far, the combined score for telcos in MENA is, at best, a C-. Only they can change this for the better, if they ever decide to move beyond increasing short-term dividends to shareholders.

Advertisements