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India's Tata sees its multimillion-dollar investment bearing fruit in Middle East

Vaneet Mehta, Associate Vice-President and Regional Head for Middle East, Central Asia and Africa at Tata Communications
(Image credit: Tata Communications)

India’s Tata Communications sees the Middle East as a growth market as the margins are high.

“With regional organisations embracing digital transformation and having a digital-first mindset, it makes the region a ripe market for growth,” Vaneet Mehta, Associate Vice-President and Regional Head for Middle East, Central Asia and Africa at Tata Communications, told TechRadar Pro Middle East.

“We have been in this region for more than 15 years but we did not have the license to operate as it was a regulated market,” he said.

The Indian company recently won a “Type B” telecom license in Saudi Arabia to offer carrier-agnostic services such as internet connectivity, public/private cloud, cybersecurity, borderless mobility and more such services to the enterprises in the Middle East.

There are several types of licenses available in the Kingdom.

A full-fledged telco license would allow obtaining of spectrum and numbering, setting up network infrastructure/facilities/mobile towers, and selling mobile services.

Since these do not align with its regional strategy, Mehta said that Tata Communications chose the “Type-B” license to expand its enterprise business.

“With the license, we will be in a position to buy and sell internet access services in Saudi Arabia, arranged with any local licensed carrier. This helps us serve our enterprise customers better by being carrier-neutral and carrier agnostic for them. They can enjoy a much richer, holistic and integrated solution from us, with a greater variety of services to choose from, at much more competitive prices,” he said.

Before this, as a foreign carrier, he said that Tata Communications jointly provided global solutions with or channel local requirements through its locally licensed partners in the region but limiting them from offering end-to-end solutions such as data centre services, local internet access, etc.

Tata Communications offers more than 65 kinds of services in India and other parts of the world.

“We can offer these services in Saudi Arabia now. Most of the telecom operators are already our partners and will continue to work with them in buying, selling and in partnership perspective. 

“There is a big gap and that is the gap we want to fill.  In the UAE, we can now directly offer our carrier-neutral services to enterprises,” Mehta said.

Moreover, he said that Saudi Arabia is the largest enterprise market in the Middle East.

Saudi to open up telecom sector further

“The anticipated upcoming new telecoms licensing regime is likely to suit the emerging new technologies and telecom services and will attract increasing foreign investments in the country.  Hence, from a timing perspective, we believe that we are in the right place at the right time with the right offerings,” Mehta said.

Saudi Arabia has three national operators — STC, Mobily and Zain — while Etihad Atheeb Telecom (GO) and Integrated Telecom Company (ITC) as fixed-line operators.

Saudi Arabia’s telecoms regulator Communications and Information Technology Commission (CITC), which has offered MVNO licenses to Virgin, Etihad Jawraa and Lebara, is inviting two more bids for MVNOs this year to increase competition and drive innovation in the mobile communications sector.

Saudi Arabia has set an ambitious target to connect 3.5m households to ultra-fast Fibre-to-the-Home (FTTH) broadband networks by the end of 2020, according to ITU.

To enhance service offerings and increase customer take-up of fibre networks, the Communications and Information Technology Commission (CITC), the telecoms regulatory authority of Saudi Arabia, has championed an “Open Access Initiative” to allow all of its six telecommunications companies to offer FTTH services in every household.

Tata Communications has been active in the Kingdom from 2004 in conjunction with a local partner, for an internet exchange node which would be used to provide services to customers in the Middle East and Gulf region.

In 2009 and 2010, Tata Communications, in partnership, developed the Saudi Arabian segments of the TGN-Eurasia cable system and the TGN-Gulf cable system respectively.

The TGN-Gulf cable system connected Oman to UAE, UAE to Qatar, Qatar to Bahrain and Bahrain to Saudi Arabia.

The TGN-Eurasia cable system connected Mumbai with Marseille in France, passing through Egypt, with a dropped pint in Jeddah, Saudi Arabia.

The company owns and operates the world’s only wholly-owned subsea network that encircles the globe and around 30% of the world’s internet routes travel over Tata Communications’ network.

 “We have invested millions of dollars into this region with our submarine cables and saw growth coming out of this and now, with big OTT players’ active in this region, we see Middle East growing multi-fold in the coming years as large corporates are attracted to this part of the world, especially in Saudi Arabia and the UAE,” Mehta said.

Apart from Saudi and the UAE, the other growth markets for the company are Oman and Qatar.

The company’s regional headquarters in the UAE cover more than 75 countries. It has teams in Saudi Arabia, Oman, Kenya and West Africa.

However, he said that Tata Communications will not bid for MVNO licenses and its right to play is around MVNE (mobile virtual network enabler) and that is where its strength is.

“We help MVNOs deliver a broad range of differentiated mobile services via our scalable mobile virtual enabler platform. We offer autonomous products and services so the MVNOs can quickly adjust their strategy and adapt to market changes,” he said.