Helping a MENA-region telecom subsidiary enter the drone zone

The situation

A client of Strategy& was a subsidiary of an incumbent telecom operator in the MENA region and specialized in mission-critical communications and solutions. The client had primarily been providing Push-to-Talk solutions to mission-critical users but was suffering from volatility in its top line and hadn’t been able to sustain profitability. To reinforce its position as a mission-critical solutions provider, the client was looking to create new sources of revenue and growth.

Strategy& was engaged to help develop a comprehensive value proposition in the drone space, focused on drone-powered solutions. The client wanted to be positioned as a key enabler of the overall drone ecosystem. To provide these solutions, the client’s operational, organizational, and regulatory readiness needed to be more robust.

How we helped

We looked at the drone business from every angle. We estimated the potential market size of commercial applications and the business models that apply to this market. We evaluated drone-related regulatory frameworks in more than 15 countries. Our analysis of the drone market value chain highlighted different opportunities for the client in drone commercialization, drone commercial applications, and drone ecosystem enablement.

After assessing different opportunities, which we selected based on revenue and cost drivers, we recommended four plays for the client: 1) institute a drone operations center, 2) establish a mobile drone surveillance unit, 3) re-sell autonomous drone systems, and 4) set up a drone traffic control center. When our client’s management met with companies from different industries, we helped out with business development activities. We also lobbied with airspace regulators for the establishment of the drone traffic control center, through tools such as a white paper.

Results

We provided our client with a detailed implementation plan for each of the recommended opportunities, which included such items as a manpower plan, organization structure, systems and partnership requirements, and the like. We helped obtain permission from the civil aviation authority and the ministry of the interior to operate drones. We also presented our client with a strategy to generate US$94 million in revenues and US$28 million in EBITDA in five years from drone solutions.