Local telecom firms focus on digital innovation to sustain revenue growth

• Local telecommunications companies have fundamentally shifted their business model from traditional providers of calls, messages, and packages to retailers offering a diverse range of smart devices and installment options, including phones, tablets, watches, and scooters.

• Institutions and governments have opened the door wide for telecommunications companies to engage in trading smart devices while investing in technology-focused startups and benefiting from the growth of digital payments (fintech).

• Contracts with a supplier network allow for profitable sales while retaining customers for two years, as the business model shifts from traditional networks to the broader digital intelligence landscape.

Some may recall the recent visits to telecommunications company branches, which primarily focused on obtaining a communication line, and if one’s ambition increased, there was the option to secure a special number—even at a premium price.

However, it appears that a fundamental shift has occurred in the business model of local telecommunications companies. They have evolved from traditional providers that simply sell calls, messages, and packages to retailers offering a wide range of smart devices and installment options. This includes everything from phones and displays to smart tablets, watches, and even scooters, the Al Rai newspaper reported.

To deepen the positive financial impact of expanding the customer base, cash loans have been provided to finance smart purchases through specialized platforms. What has changed in the work methodology of local telecommunications companies, and what is the impact of their adaptation to the outputs of digital transformation on their financial indicators?

The acceleration of future technology

To simplify matters and avoid complexity, the acceleration of future technology needs aimed at individual customers, institutions, and governments has opened the door wide for telecommunications companies to engage in trading smart devices while investing in technology-focused startups and benefiting from the growth of digital payments (fintech).

In short, they are investing in everything related to the outputs of the digital revolution for their customers, who are now connected to the Internet throughout the day.

To this end, telecommunications companies in Kuwait have expanded their business models from primarily focusing on increasing customer usage of calls and messages to a dynamic approach governed by new concepts, various operational tools, and profitability growth.

Leadership and financial benefits

In light of the continuous movement of digital data, sectors and production methods have been developed to achieve leadership and financial benefits, especially with the presence of 5G networks and the ongoing deployment of 5.5G networks, which aim to encompass trade, business, and marketing activities.

In parallel with the development of electronic systems and applied innovations, telecommunications companies have expanded their business models from traditional networks to smart networks. They are transforming from mere operators into eager suppliers and investors in digital transformation by providing technological services and applications that better meet the needs of different customer segments.

To enhance the operational experience, local telecommunications companies have adopted a strategy of selling smart devices to their customers, relying on a vast network of suppliers that offer smart devices at competitive prices.

This approach ensures appropriate profit margins from installment sales or by granting interest-free cash loans, allowing them to achieve dual benefits: diversifying their operating revenues while maintaining their market share by keeping customers within their base through contracts of at least two years.

To sustain their growth and profits, and after reinforcing their confidence in their success in the financial technology sector, local telecommunications companies have invested in technology startups and accelerated their efforts to launch digital banks.

They have also signed a series of memorandums of understanding with regional partners and several global technology and digital content innovators.

Intensification of business

Additionally, local telecommunications companies have intensified their utilization of advanced infrastructure and key assets—such as direct billing services, messaging, digital documentation, customer access, market knowledge, and data centers—to provide incentives for other players to join their platforms. This strategy creates cumulative financial value for their business from multiple revenue streams.

It can be said that local telecommunications companies heavily rely on enhancing their investments in digital innovation and everything related to the telecommunications revolution to ensure the sustainability of their revenue and profit growth in an increasingly busy and crowded digital world filled with services, applications, and modern technology. Therefore, the question remains about the trends in the budgets of local telecommunications companies and their capacity for revenue accumulation in the future.

Telecomm firms to play key role in setting up smart and connected cities

Deloitte expects telecommunications companies to play a significant role in the establishment of smart and connected cities, including the development of connected cars that assist in the transition to driverless technology.

According to the report prepared on technology, media, and communications, the 5G (and 5.5G) networks will facilitate vehicle-to-vehicle communication technology by reducing costs, lowering battery consumption, and improving response times for various machine-to-machine communication applications.

Consequently, telecommunications and automotive companies are testing communication between vehicles, which enhances optimism about the telecommunications sector’s potential—especially among large companies—to generate significant revenues.