Adapting to the transforming telecoms industry
This article summarises the keynote delivered by Karim Djouani, head advisor for strategy, innovation and R&D at Groupe Télécom Algérie, at the CMS annual Technology, Media and Communications Conference 2018.
Groupe Télécom Algérie is a state-owned telecoms company operating in the emerging market of Algeria, north Africa, which wants to evolve and find the best way to adapt to the transformation taking place in the global telecoms industry.
Operating in a country five times the size of France, the group wants to improve its capacity, connectivity and quality of services to the local economy while becoming more competitive and diversifying by providing services internationally. Our ambitions are large. The main objective of Algérie Télécom is to become the data hub for Africa - we want to connect Africa. We already have a cable under construction from Algiers to Abuja in Nigeria and we have other cables that run from the east and west.
There is still much to do, however, and when understanding the scale of change underway at Algérie Télécom it is important to appreciate the context of the group’s operations.
Algérie Télécom was a fixed line company that was officially created in 2002. We are both lucky and unlucky in that we have no fixed network competitor and we own all the fibre, more than 200,000 km, in Algeria. A mobile business launched in 2004, and it faces some competition from two private mobile companies. This was followed by the creation of a satellite company in 2006. Algérie Télécom also has shares in two small companies that are involved with product development and services. In 2016, in order to open Algeria to the external market and better manage its international links and capacity, Algérie Télécom Europe was created and is located in Valencia in Spain.
The complexity of running a public owned company is immense as it is subject to strict rules which can create problems for businesses that want to become more agile and constantly bring new services to customers and companies. Before embarking on its transformation strategy, there was little to no connection or collaboration between the six or seven companies that make up Groupe Télécom Algérie. Each of the companies had their own complex hierarchical structures including, for example, their own human resources and procurement teams. Decision-making was slow and cost control was extremely difficult.
In order to change, the group had to “reinvent” what already exists outside the country. The first step involved working on the structure of the group to make it more agile. Algérie Télécom now has group central functions covering areas such as human resources, procurement, regulation, research and innovation among others. This has not only improved the operation of the company but most importantly its cost control.
Since the reorganisation of the group, the expected turnover increase is about 10 per cent, with a 20 per cent increase in operational savings. There are also other strategies underway to improve management, internal communication, the retention of human capital, skills development, marketing, and monitoring of the group so its decision-making is based on the right information.
We are also exploring how we can improve our capacity, connectivity, and quality of services through partnerships and collaborations with both global players and innovative start-ups.
Currently our approach is for software-defined networks. We are creating a lot of Proof Of Concepts (POCs) with global telco partners, as we try and migrate to becoming a software-defined operator. To improveon connectivity and capacity, we are building new data centres as well. The first Tier 4 data centre will open in 2019 with the objective of supporting the internal economy and providing services to companies outside the country. We are open to collaboration and working with solutions providers so we can do business sharing because we know we will never be able to provide professional services to dedicated businesses without the help of the main players globally.
The idea is to be one of the leaders of the digitalisation of Algeria and there is strong demand for that to happen, however, we cannot do it on our own. The Algeria market is huge and we need an ecosystem of support from international and local partners.