Leading edge

Wataniya Telecom has been transformed into one of the most technically advanced networks in the Gulf and Alex Ritman considers how, despite its small domestic market, the operator is bidding to become one of the leading operator brands in the region.

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By  Published  October 31, 2006

Kuwait's population may only stand at 2.5 million, but the country's two mobile operators — MTC and Wataniya Telecom — have approached the development of the market as if it were 10 times the size it actually is.

Wataniya, the second operator that launched more than a decade after incumbent MTC, has not sat idly in its position behind the dominant Kuwaiti operator.

While it too has been making serious waves on the regional scene through its Wataniya International arm, Wataniya in Kuwait has been keen to make a serious bid for domination in its home market, having embarked on a course to attract business users.

One of the major focuses for Wataniya has been customer service, emphasised through its campaign known as the 'Red Carpet' policy.

With this strategy, the operator is bidding to provide a level of service and customer satisfaction second to none in the region.

Based around a state-of-the-art call centre, Wataniya customers — both business and personal — are guaranteed 24/7 access to support and services.

“It's about customer service - our philosophy is that every customer is a VIP.

That's the centre of our new strategy,” says Jukka Paasivaara, Wataniya's director of sales.

“Everybody talks about customer service, but we have put it at the focal point of our development.

Our strategy is to be a service provider, and not just a technology provider.”

Paasivaara points to the investments in customer service already made as evidence that there is action behind Wataniya's words.

“We have a 24/7 call centre, as well as our retail operation on top of that, and we are training our people in what service provision is all about — focusing on the customer experience.”

He acknowledges that previously, telecoms operators had been far more focused on the technology than the services.

“We want to extend beyond providing a technically sound service.”

Last year, Wataniya entered a deal worth US$125 million with Nokia for the implementation of advanced technologies to enhance the operator's network.

Included in the deal was Nokia's High Speed Downlink Packet Access (HSDPA) solution, a software upgrade to the WCDMA network, permitting data speeds of up to 2Mbps in the first phase.

Nokia's end-to-end offering can enable advanced services such as push to talk, video calls and video sharing.

The deal with Nokia was upgraded in October, with the supplier awarded a contract to expand its HSDPA radio and core network, increasing its capacity and extending the network coverage to new service areas.

In addition to the HSDPA radio network, Nokia will provide Wataniya with a core network upgrade, including packet core equipment and the Nokia MSC Server mobile softswitch; as well as a range of services, including network planning, consulting, system integration, implementation, pre-launch optimisation, maintenance, and care services.

Deliveries for the contract have already begun.

Wataniya Telecom CEO and general manager Harri Koponen arrived in Kuwait in the second half of 2004, and immediately began a radical transformation of Wataniya's network in Kuwait.

Siemens had, up until then, been the main infrastructure supplier, but this network was subsequently ripped out and Wataniya brought on board Nokia and Ericsson as its equipment partners.

October this year also saw Wataniya enhance its partnership with Ericsson, with the Swedish supplier signing on to provide radio equipment and implementation services for the 3G/HSDPA network, enabling the operator to introduce a new generation of mobile broadband services including high speed internet access.

The HSDPA solution from Ericsson will enable peak download speeds of up to 14.4 Mbps once end-user terminals that support such speeds are available.

Users will, on average, be able to download faster than a normal 3G connection using existing PC cards, and up to 20 times faster than with a GSM/GPRS connection.

Wataniya is hoping that its infrastructure investments will propel it forward as Kuwait's premier provider of broadband internet connectivity.

The current sole fixed-line and broadband provider in Kuwait is the Ministry for Communications, which has been notoriously slow to react to demands for increasing bandwidth, often limiting supply.

While Wataniya has been jostling with MTC in the Kuwaiti mobile market since 1999, there have been political moves this year that could see the arrival of a third operator.

In April, the Kuwaiti cabinet approved in principal, draft legislation proposed by lawmakers to consider the economic and technical feasibility of a potential new entrant.

Both Wataniya and MTC have been understandably concerned about the potential of further competition.

According to Paasivaara, the market does not need a third operator and could suffer as a result.

“Kuwait currently has around 107% penetration.

How can (a third player) squeeze in?

Most likely the only way it could enter the market is through price.

It would lose.

Both MTC and us have deep pockets.

It would simply destroy the value of the two operators and decrease the size of the cake,” Paasivaara comments.

He suggests that the third operator would probably be required to build a third network rather than use the two already in place.

It has been suggested that the noncommercial reason for the third operator is that the profits generated would be owned by Kuwaiti pension funds.

“Pension funds would likely be the parties to invest considerable sums of money.

I don't think the structure of the ownership would attract regional or international investors.

It would be Kuwaiti investors,” Paasivaara continues.

Given that mobile penetration in Kuwait does exceed 100% mark, there does indeed appear to be little room for another entrant.

Wataniya's subscriber base grew from 946,000 at the end of 2005 to over 1 million at the end of 3Q06, hardly a dramatic rise considering its subscriber base stood at 847,000 at the end of 2004.

MTC remains market leader but has also witnessed a slowing in subscriber growth, witnessing a 9% growth in the year to end-3Q06 to 1.51 million, the slowest growing market within the operator's vast portfolio.

While Wataniya's customer base of just over 1 million may appear limited in comparison to other markets in the region, it is clear that through its infrastructure investments, the operator is hoping to dramatically increase the value of each subscriber.

Among those services already launched by the operator is a comprehensive business suite that Timo Everi; the now-departed director of marketing, said had not been seen in Kuwait before.

“There was no real corporate offering.

MTC offered discounts, but this was not a corporate offering.” Among Wataniya's 'Tools for Business' Mobility Service portfolio, are services including W-mail (mobile email access), W-connect (mobile PBX) and W-net (mobile internet access via a data card), which were launched through consecutive campaigns last year.

Also available is Push to Talk, which Wataniya is hoping will attract the attention of the mobile workforce users, as well as students and families.

In order to promote its new services and put across its 'Red Carpet' approach to customer service, Wataniya has also adopted a creative advertising and branding strategy remarkably reminiscent to those found in modern European telecoms markets.

In fact, the agency it has brought on board to manage the campaign is Helsinki-based Hasan & Partners, a Finnish agent ranked as one of the best in Scandinavia.

Everi actually served as executive creative director at the agency, but switched roles at around the same time the agency began its campaigns for Wataniya in 3Q04.

Given the Finnish links with respect to Wataniya's management, the operator's infrastructure suppliers, and its advertising agency, there have been questions raised whether Wataniya is being used as a conduit to support Finnish businesses and personalitioes.

Predictably, Wataniya management denies the claim, suggesting that Hasan & Partners was selected because of its ability within the mobile sector.

“It's very hard to find agencies globally that would understand that the telco industry is changing its strategies or that it needs to,” said former director of marketing, Everi.

“Knowing these guys already pretty well, we knew we had this communication.”

Everi claimed that Hasan & Partners was selected after a three-month study in Kuwait.

“This sort of agency doesn't exist in the Middle East. We can't spend too much time pitching with agencies.”

Hasan & Partners' approach was to create a brand that looked global rather than specifically Kuwaiti.

“We need a brand that could defend itself in the market against the T-Mobiles and Vodafones,” explained Everi.

Building a consistent brand from its domestic market outwards will be another challenge to overcome by Wataniya as it seeks consolidate.

“Everybody talks about customer service, but we have put it at the focal point of our development.

Our strategy is to be a service provider, and not just a technology provider”

“It's very hard to find agencies globally who would understand that the telco industry is changing its strategies or that it needs to”

“The way Wataniya acted two years ago in the Kuwaiti market was giving us problems.

We were getting worse”

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