turk-internet.com : Some vendors such as Cisco and Intel are also investing heavily in the Arab world. They are establishing huge operational centers. What is your opinion about that?
Husam Bodeur : Most of these places were long considered as the backyards of French and British systems. French operators and vendors had a sphere of influence from Morocco in the west to Lebanon and Syria in the east. But the Gulf States are open to all, especially with all the necessary trade and business climate in Dubai.
Equipment suppliers had to move their business/product development experts and sales teams to where the money is after the burst of telecoms bubble in the west. That happens to be the Gulf region. Almost all vendors have a strong presence in the region now. This also explains why Etisalat takes the lead among others because Dubai leads in attracting all these suppliers and technology companies to build their regional centers in Internet City and Media City down there.
turk-internet.com : In the past there were big names as vendors. Now some are getting even bigger.. What is going on at the supply side? What are the chances of small vendors?
Husam Bodeur : You might think I am too stuck with the collapse of telecoms bubble but everything we do in telecoms since then has to do with that burst. The rules of the game are changed. So are the players. Chinese newcomers are only adding salt to the injury.
Almost all vendors had to write off large losses and lay off thousands of people. The ones that took less risk, that had more political protection, or that made smarter deals are recovering faster. So fast that they see the opportunity to go after and acquire those that are still fragile.
Consolidation of vendors, their markets and technologies are typical after such shocks, and it is the same economical story in other sectors as well.
Every shock brings up new opportunities but not only in the form of consolidation at the high end.. There are also opportunities popping up at the lower end for small vendors and new names. Small companies could serve operators in a more flexible, more focused and less expensive way.Sometimes it starts with one product and/or one client. So I think the competition at the lower end is as fierce as Alcatel-Lucent merger above.
turk-internet.com : Who is determining the trends? How is the relation set up between the end users and providers of services or technologies?
Husam Bodeur : Typically, the end user determines the name of the game with complaints about the solutions in the field. But there are many cases the service providers and even vendors did come up with things out of the blue.
The name of the game in recent years is spreading CapEx into OpEx. Chinese vendors are good at providing this feature, thanks to their government support. So are Japanese, but they are a bit slower and not as aggressive and innovative anymore.
I think one way to save the clients from large initial investments and establish a longing relation thru OpEx is to go beyond the traditional in-house services. Physical ownership is the largest and often unnecessary cost item. That was the exposure most vendors, operators and major clients had during the collapse. Since then, there is already a trend towards out-tasking where the operation is transferred to others outside and out-sourcing where the end use carries only legal responsibility and subcontracts the operation. The problem with these is the lack of control on actual cost and optimization for the highest quality of service.
This is where the newest trend, net-sourcing, steps in. It is possible with today’s securituy features to share resources and enormous fixed costs at a remote location. f you ask me, EMC is the best example on this with their “Information Lifecycle Management” strategy in out-tasking, out-sourcing, and net-sourcing. Now, Microsoft and even Google are working on making applications available on the net.
Bringing telecoms, Internet and media together as one big converged network based on IP, Cisco is ignoring the classification of services such as cable, ADSL, BWA or satellite, based on the access technology. They now name their target market as Experience Providers, as opposed to good old Service Providers. This is, in my opinion, the wake-up call for regulators all around the world. I kow FCC is already working on it but EU is quite behind.
turk-internet.com : What do you think of the new players from China and India?
Husam Bodeur : I think these two countries found their niche markets.. China on the manufacturing side and hardware, India on service side and software. Manufacturing equipment and selling against established vendors require deep pockets and the Chines government is not shying away. We are also working with Chinese vendors and observing that they can match most in quality but definitely surpass all in prices and financing capabilities.
Software services, on the other hand, are knowledge intensive and the seven technology institutes of India provide only the best of the best to do just that. With close to 4 million programmers, India is leading the world in global outsourcing of software services and also out-tasking as with the call-centers.
turk-internet.com : Any last words on trends?
Husam Bodeur : Yes. We need to look at the broader picture. The number of mobile subscribers in the developing world is four times bigger than the number of computers. There is a huge need to lower the cost and spread the infrastructure to masses. We’re talking about basic telecoms services both to sustain mobile services and to accommodate the growth of other communications services.
A somewhat similar observation can be made for broadband in the developed markets which host 80 percent of all the computers and 70 percent of all Internet users in the world. We see broadband in rather richer regions, cities or even selected neighborhoods.
Whether in developing world or in the more developed one, the point here is the same. Infrastructure is an expensive thing. It could take a giant like Global Crossing down in a matter of months. It may be the bad news for the vendors but they will also realize in the long run that the best is to share the infrastructure. It is for the good of all involved. And it is doable if the regulators can put their act together.
Who is Husam Bodeur?
Mr Bodeur is managing telecommunications projects of Calik Group under CETEL A.S. Within the past few years, he has led CETEL through major privatization projects including TurkTelekom in Turkiye, AlbTelecom in Albania, UTG in Georgia, and KyrgyzTelecom in the Kyrgyz Republic, and initiated alternative service projects in Turkiye, Turkmenistan and Kazakhstan.
Following a brief period of teaching in Selcuk University in Konya, Turkiye, Mr Bodeur joined the Undersecretariat for Defense Industries and worked with major aerospace and communications companies in the US, Europe and the Middle East, with technical and contractual responsibilities as systems engineer and project manager.
Mr. Bodeur’s hands-on experience in telecommunications comes from working with J.P. Morgan Securities in New York as an analyst in Equity Research for Latin American telecoms, and with the Development Economics Group of the World Bank in Washington DC as a consultant in both privatization and greenfield projects in Africa, Central and Eastern Europe and the Middle East .
Mr Bodeur received his BS degree in Electronics Engineering and MS degree in Telecoms from Hacettepe University in Turkey. He also holds MPA and MIA degrees from Columbia University in New York, with specialization in international finance and economics of infrastructure programs in telecommunications and other utilities.