Lebanese Telco Touch Expands its Reach with Startups

Lebanese Telco Touch Expands its Reach with Startups

After indulging in an era of global expansion, telecom operators around the world today are finding themselves having to deal with pressing challenges. Most of these challenges have come as a result of cross platform messaging apps stepping into the market, such as WhatsApp, Viber and Tango, providing low-cost services built on telco’s capital-intensive infrastructure.

Additional elements such as saturated markets, reduced profitability and additional investments requirements to cope with the demands od data are also playing a role in limiting any scaling these companies might be looking into. Competition is only increasing. With the rollout of Google and Facebook (Google project FI and Aquila, Facebook’s solar powered drones) to shortcut telecom carriers all together.

To mitigate these challenges, telcos are trying to improve their digital positioning and are investing heavily in online content, fintech, e-commerce and Internet of Things. In many cases, working with startups.

Global operators such as AT&T for example, founded AT&T Foundry innovation centers, fast-paced and collaborative environments where AT&T teams work with startups and developers to deliver the latest apps, products and services.

Similarly, Telefonica has launched Wayra, a large-scale accelerator for digital startups with a portfolio of 330 startups across Europe and Latin America.

The situation in Lebanon is not so different despite the context of high regulations in the sector and the unique management model, as the only two operators in the country are still public but managed by private companies.

With 96 percent mobile penetration in Q4-2015, and 87 percent of smartphone penetration, the market is nearly saturated. Lebanese operator Touch, with a 53.82 percent market share, is actively looking to diversify its core offerings (voice, SMS and data) and looking for innovative value-added services. As part of this, it has been partnering with local startups to stay ahead of competition.

“We have clear evidence that we can’t keep selling only voice, SMS and data, we have to look at adjacent revenue streams. We have the customer profiles and the billing relationship to do so,” said Nadim Khater, chief commercial officer at Touch.

Telcos have the potential to engage a lot with entrepreneurs and have a lot to offer, such as location, database, SMS, direct operator billing, which are elements needed by startups trying to scale in this industry. “We are very good at selling minutes and megabytes, but we are exploring new revenue streams; we are looking for partners with digital content and services,” Khater said.

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