Samsung to boost Saudi mobile business

Samsung Electronics is set to massively expand its presence in the Saudi Arabian mobile channel sector, having finalised deals with new Saudi distributors.

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By  Michael Thorne Published  August 7, 2006

Samsung Electronics is set to massively expand its presence in the Saudi Arabian mobile channel sector, having finalised deals with new Saudi distributors. It is also planning an all-out assault on the Central African markets. These plans follow the launch of the company’s latest ultra-slim range of handsets, which it claims will help establish it as a leader in mobile design and technology. Speculation is rife over the possibility of Samsung entering into agreements with UAE-based telcos Du and Etisalat, while other reports suggest that the Korean vendor may establish a research and development facility in the UAE. In an exclusive interview with ECN, the VP of sales and marketing for Samsung’s Mobile Division, Kwangbae Roh, said the massive growth of the company’s business in Saudi Arabia had forced it to appoint new distributors servicing the market. “Our general strategy is to work with a single distributor in each country,” Roh explained. “In the case of Saudi Arabia, we already have one loyal Samsung distributor but we required further partners to capitalise on the country’s commercial potential. We are currently finalising deals with key channel distributors and plan to reveal further details later this month.” Roh also explained that the Central African markets would be key to Samsung’s strategy going forward, as it looks to identify new markets for its products. Samsung plans to roll out its full product range in these markets, spearheaded by its burgeoning entry-level handset range. “The African markets hold huge commercial potential, especially Nigeria,” he said. “There are approximately 40 countries on the continent that we believe could benefit our business. We’re now seriously considering our options in terms of how to best target these markets. We expect to have a basic operational structure confirmed before the end if this year.” Roh said the company may open offices in Lagos, Nigeria, and Khartoum, Sudan, to facilitate the company’s African expansion. He also revealed that Samsung was considering establishing R&D facilities in the Middle East, although he was reluctant to reveal details. “We may potentially establish a research facility or an assembly line in the region,” Roh said. “We don’t have a time frame in mind, but the region figures prominently in our business plan.” Roh also hinted of the possibility that Samsung may enter into deals with cellular service providers in the Middle East. A number of sources have suggested that vendors, including Samsung, have already begun bidding for contracts with the UAE’s second telco, Du. At a recent press conference in Dubai, Samsung’s senior vice president, MEA, Ihnchul Chung, fuelled this speculation, admitting that Samsung was in discussions with both Du and Etisalat. “Du, together with Etisalat, would like to see greater initiatives [with vendors] in the future,” he said. “We can expect some kind of marketing approach and are discussing this with [these parties] at the moment.” Samsung is forecasting an increase in sales of 20% in the Middle East and Africa in 2006, and predicts sustained growth in coming years. “We sold 7.5 million handsets in the Middle East and Africa last year and are targeting 10 million this year with a projected revenue of approximately US$ 1.7 billion,” Chung said. “We expect to launch three new mobile handsets each month for the remainder of this year across the Middle East, and we expect to sell one million Ultra handsets in the MEA within the next six months.”

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