MISSION REPORT on the Strategic Management Workshop of ITU / BDT

MISSION REPORT on the " Strategic Management " workshop of ITU / BDT

Part II Forecasting

Amman, Jordan, 4 – 7 December 2006

By Mr. Christian CARRIERand Dr. Rashad HURANI

To:Mr. Khalil Aburizik, ITU/ BDT, Cairo
Mr Mario Maniewicz, ITU/BDT/HRD, Geneva;
Mr. Jean-Claude Faure, ITU/BDT/HRD, Geneva

AObjectives of the mission

The objective of the mission was to support a 4-day workshop in Amman on the Part IIof Strategic Managementfor24participants from the Arab region. This workshop was dedicated to forecastingand was addressed to decision-makers and senior managers from National Telecommunication Administrations, Regulators and Operators as well as other ICT players involved in designing corporate strategies and contributing to their implementation. The Part I of Strategic Management was held in Cairoin December 2005.

The objectives of the workshop were:

• to develop a capacity building process for managers and officers in the Telecommunication operators;
• to get local experts acquainted with appropriate forecasting methods;
• to investigate the customers behaviour in a competitive environment;
• to present examples of estimation of new services penetration;
• to exchange experiences and points of view about the future demand for new services in the sub-region

BOrganisation

The workshop was organised by M. Khalil Aburizikof the ITU Arab regional Office and was hosted by the Ministry of ICT of Jordan. The workshop was held in Radisson SAS Hotel in Amman. A comfortable conference room and usual facilities were put at our disposal and allowed us to perform our tasks in the best conditions and contributed to get a fruitful workshop.

CParticipants

There were 24participants:

Participants were very interested by the methods used for determining the potential demand of new services and the evolution of ARPU in a rapidly changing environment. The diversity of experience and background allowed them to exchange relevant points of view.It was a valuable opportunity to exchange ideas about the restructuring of the telecommunications sector and the impact of new technologies.

DAnalysis of the performed activities

A country paper on Jordan Telecom was given by M. Mohamad Karmash. The lecture was very interesting to the participants since it described the actual situation in a competitive market (Jordan) from the point of view of an incumbent operator. The lecturer showed the challenges that face PSTN operator where fixed telephony prices are constantly decreasing and the fixed-mobile substitution is high

For most participants it was interesting to hear about the complex relations between operators, and between operators and the regulator- a situation still rare in Arab countries with limited competition so far.

Another country paper (Qatar) was presented by Dr. Hurani. The case of Qataris representative of oil-driven economies of the Gulf region, where the demand and the buying power are high for most telecom services. Qatar Telecom (Qtel) has been preparing for competition over the past few years; some interesting approaches undertaken during that exercise were discussed in the paper.

The Algeria country paper was prepared by Ms Nawal Ameziane, ENSET of Oran, Algeria. This paper presented the adaptation of the ITU business model to the local context in order to study the impact of the decline of traditional PSTN communications and the emerging new services for the incumbent operator in Algeria. Three scenarios have been investigated with different assumptions about the penetration of new services taking into account the competitive environment. The advantage of a contribution made by a University is to have the freedom to express various assumptions about the future that experts can not express even if they agree, because of the confidentiality constraints concerning such strategic studies in the private companies.

The possibility to present a country paper had been offered to all participants, which are always very keen to promote the image of their country and the role of their organization about the development of the telecommunications sector.Unfortunately, they have been informed too late about the opportunity to attend the workshop, although the invitation letter has been sent several months in advance. The process of selection of participants takes too long time in most of organizations, so that the selected personsdo not have enough time to prepare a country paper before attending the workshop.

Some participants were already aware about advanced methods like Balance Scorecard and Business Planning. Some operators can afford high level consultants for helping them about such methods, but they generally meet strong difficulties to implement these conceptual methods in a practical way. They need concrete guidelines that are especially designed for the telecommunications industry. They have difficulties to formulate the interactions between the targets and the initiatives of the Balanced Scorecard in consistent quantitative models. This explains their difficulties to link the results of the Balanced Scorecard with the budget and the management control, because the items that are generally put in the Balanced Scorecards are too vague and not easy to be translated in figures. It is also difficult to cascade these items through the different layers of the company and to distribute the objectives and the resources among the working units. The reporting systems of their companies rarely provide them with the appropriate input data they need to implement the recommended methods. The issues concerning the regulatory obstacles for the diffusion of converged services and the decline of revenue of traditional traffic were the subjects emerging and designing some scenarios about the penetration of services.

Most of participants recognise that they are specialised in a narrow field of activity and they do not know what are the key indicators characterising the strategy of their company. This workshop was an interesting opportunity for them to be aware about the strategic objectives to investigate when a scenario is designed.

EOpinions and comments expressed by the participants.

Participants have liked

• Organisation was good, instructors were excellent
• The case studies that have been presented (Suntel, Algeria, Qatar)
• Discussions among participants during the working groups
• Experiences from instructors about issues faced by participants in their countries;
• Points of view from other participants

Participants did not liked

• Operators are reluctant to present analysis and case studies, they are very sensitive about confidentiality of data in a hard competitive environment.
• Some participants were not committed to time schedule.
• Some participants have some language problems

Participants recommend:

• Every participant should prepare a paper on one of the addressed issues before coming and present it during the workshop
• More emphasis on practical exercises
• Arabic language should be used
• More case studies are requested.

Participants are more interested in the practical implementation of the methods rather than the theoretical presentation of such methods. When theoretical presentations are shortened, practical exercises are then disturbed by the time-consuming individual explanations to the participants who did not assimilate the theory.

Some participants who did not know the Balanced Score Cards have considered the practical exercises about this method as interesting. A concrete example based on a real case study is necessary to have some more useful practical exercises on the Balanced Score Cards.

FRecommendations for further activities

Case studies are necessary to provide participants of future workshops with workable guidelines, but real case studies are too difficult to expect in the future because of the high sensitivity concerning the confidentiality of data and strategic scenarios. It is consequently recommended to carry out some case studies with typical set of data characterising some countries of the region.

For instance, three types of country could be selected and a case study could be carried out for each type:

• a small size country with a high level of development
• a small size country with a low level of development
• a large size country with a medium level of development

For each case study:

• initial data would be an approximate average of the real data of the related countries taken from public sources, and the other data could be determined by common sense;
• a Balanced Scorecard would be set up with a concrete list of targets and initiatives;
• forecasting methods would be used for determining the evolution of the subscribers demand and the evolution of ARPU.
• The SUNLAND business model would be used to investigate and compare the envisaged scenarios;
• Practical guidelines would be given to implement the strategy by cascading the objectives and resources among the working units.

These materials would be available on the website of the ITU Regional Office in Cairo and could be used for distance learning as well as future face to face workshops.

We hope that ITU may allocate some resources to undertake these case studies with volunteer operators of the region. A letter of invitation could be sent to the telecommunications organisations to set up a team of volunteers to support the ITU experts.

Moreover, it would be important to put on the website of the ITU Regional Office in Cairo some pedagogical materials that any manager in the region could use for his or her own training in self service. A special attention should be given to some basic knowledge such as the finance for non-financial people or marketing for non-marketing people. Some presentations about the new services would also be appreciated.

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