STC: Leading from the front of the pack
Saudi Telecom Company (STC) has appointed a new VP of wholesale. Jason McGee-Abe heard from Alan Whelan about STC’s vision to propel the carrier to new heights
What are STC’s main wholesale areas of focus in today’s increasingly digital market?
In general, international wholesale carriers are facing substantial pressure and challenges that arise from the convergence of the telecoms and IT industries and the related trend of digitisation in addition to the decline of voice revenue driven by the OTT applications. The telecoms industry is functioning in a state of transition and needs to evolve towards new business models and service portfolio in order to unlock the new wholesale growth drivers in the digital transformation era.
Data centres are becoming an increasingly important element of the overall business strategy of many telecoms companies. In 2017, STC Wholesale focused on the enhancement and monetisation of its MENA Gateway data centre - through the signing of strategic long-term agreements with international Tier 1 content providers. This development continues to gain momentum. Jeddah, with its strategic geographic location and the expertise of our data centre partners, will make MENA Gateway in Jeddah an important hub for many key carriers and industry players, as it will enable the provision of optimal peering arrangements, IP connectivity, hosting/colocation and value-added services, including cloud computing and content delivery.
It is very clear that traditional wholesale margins have been in persistent decline over the past few years, and this has put substantial pressure on carriers to accelerate their rollout of new services. The explosion of data traffic is offering vital alternatives to the wholesale business, in addition to the emergence of new demand channels from retail providers of various stripes (cloud providers, MVNOs, OTTs, MNCs). Therefore, operators must transform their business in order to survive, and STC has engaged in the last two years in a massive transformation program in all areas - including in the wholesale business.
STC’s wholesale business unit serves a number of functions. It is regarded as a customer facing unit which serves other licence operators and international enterprises, and at the same time it serves all other STC businesses for all of their international requirements and needs. We also operate all of STC’s international infrastructures – including STC’s participation in the various submarine projects and consortiums, border crossing facilities and international points of presence (PoPs). The wholesale unit today has eight general managers that look after three business segments - global data services, carrier voice services and national wholesale services.
To what extent are you provisioning 100Gbps IP transit connectivity in the Middle East, and with whom?
Through our partnership with Tier 1 internet providers, STC has significantly enhanced its internet global backbone connectivity through peering and IP transit arrangements. These partnerships are being further leveraged by the activation of 100Gbps IP Transit connectivity which improve our ability to meet growing market demands with excellent QoS and reduced latency which has tremendously improved the customers experience rating and reflected positively on customer loyalty, higher retention and increased revenues.
Update on your CDN offering in the Middle East
STC has collaborated with top tier IP services/content providers to enable terabyte level CDN caches and streaming close to our customers in the region. In addition we have to our own content aggregator subsidiary (Intigral) in the region. Our latest submarine cable systems, Tier 4 data centres and cloud facilities add further reliability, redundancy and diversity to our CDN offering in the region.
STC is establishing international IP related PoPs for interconnecting with partners/providers globally, thereby offering optimal top tier service levels to our customers.
How is STC embracing new technology to differentiate itself from other players?
STC has embraced the new App model of business by incorporating such features into our networks as on-demand provisioning and activation, made simple via software-defined networking (SDN) and network function virtualisation (NFV) technologies. These technologies and trends have been enabled through our latest deployments of fully protected mesh Nx100G optical facilities based networks and our 4G/5G mobile networks deployments. Customers’ demands for services flexibility and optimal pricing are being achieved by incorporating such new technologies in our services offerings.
In addition to SD-WAN, cloud-based XaaS offerings, our portfolio includes SDN/orchestration-based optical transport network (OTN) and Ethernet services and solutions. We are working with industry-leading developers and innovators to build APIs to our information rich corporate data providing opportunities for B2B, B2C and B2G type of big data/analytics and AI apps.
How has SEA-ME-WE 5 enhanced STC’s offering?
The SEA-ME-WE 5 submarine cable system, with its advanced 100Gbps technology, enhanced STC’s efficient connectivity with the lowest latency and further enhancing the network diversity and resilience. STC is currently engaged in advanced discussion with other parties in relation to other projects such as Africa-1.
What carrier opportunities will you leverage from the Kingdom’s 2030 Vision. How has this shaped STC’s DARE strategy?
The Kingdom 2030 vision has identified certain programmes that support national leadership in industry and financial markets, strengthen national identity and bolster national culture, arts and entertainment. One of these programmes is motivating more than 100 national companies that have promising chances in regional and international leadership and working on enhancing their statuses in a way that positively reflects on the Kingdom’s image and economy. Based on this STC is worked hard during the past few months and adopted a three-year strategic plan (2018-2020) called the DARE strategy that focusing on deliver shareholder value and support KSA’s Vision 2030 (D Digitise STC, A Accelerate performance of core assets R Reinvent customer experience to world-class standards and performance of core assets and E Expand aggressively scale and scope. As part of this strategy our Wholesale objective is to be the premier regional hub for global and carrier services, providing bandwidth and connectivity for the efficient movement of bulk data traffic throughout the region, enabling regional and global clients.
The Ministry of Communication and Information Technology signed an agreement with STC to execute a broadband initiative, how is STC deploying this?
In line with MCIT’s efforts to realise Saudi Arabia’s Vision 2030, and the associated initiatives of the National Transformation programme 2020 dedicated to the ICT sector – which aims to develop this vital sector and inspire the digital infrastructure through high-speed fibre-optic broadband services to all urban areas in the Kingdom, STC is executing the agreement to expand the deployment of fibre-optic broadband services to houses and vital government facilities in all the urban areas of the Kingdom.
The signed agreement is part of the ICT sector plan to expand the deployment of fibre-optic broadband services to houses and vital government facilities in all the urban areas of the Kingdom. The number of targeted houses in high-density urban areas is estimated at 405,000 houses, which will raise the percentage of coverage from 44% currently to 80% in 2020, while the number of targeted houses in the urban areas is 1,730,000, raising the percentage of coverage from 12% currently to 55% in 2020.
What will you be announcing at Capacity Middle East?
With the recent establishment of an STC node in datamena, STC is pleased to announce to its tenants that it is offering the fastest route from datamena to Europe. This is only possible through STC’s extensive node network in Europe and its nodes are linked over terrestrial protected connectivity and border crossings to datamena. Connections to datamena are also protected with a submarine path for added diversity and redundancy. Our newest submarine cable (SEA-ME-WE 5) adds huge capacity and the lowest latency to Europe. Using this route customers can expect low latency in the 70-100ms range depending on which city in Europe they are connecting to.
STC has also signed an agreement welcoming PCCW Global as the latest tenant in its MenaGateway data centre. With this hosting, PCCW Global will have access to the Saudi and regional market taking advantage of Jeddah’s unique location. Menagateway, with access to multiple submarine cables with short distances to Europe, Asia, and Africa, is truly a gateway to the MENA region.