Undercover operator

Wataniya International was established as an independent company from its Kuwait-based operation at the end of July 2004, and unlike many of its Gulf counterparts, has been relatively low-key in its investment strategy.

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By  Tawanda Chihota Published  May 31, 2005

|~|Haleem200.jpg|~|Haleem: Wataniya International’s targets are markets that possess under-serviced mobile telecoms sectors.|~|Wataniya International was established as an independent company from its Kuwait-based operation at the end of July 2004, and unlike many of its Gulf counterparts, has been relatively low-key in its investment strategy. Ahmad Haleem is the man at the helm, and he explains why funding investments on a case-by-case basis at the operational level rather than at the holding company level is paying dividends. Wataniya International's second-floor office space in Dubai Media City is virtually empty apart from the offices of senior executives and consultants. It is not going to remain this way for much longer, as the company continues with the preparation of workspaces in anticipation of further staff additions. At this point however, the company comprises some 20 staff, and CEO Ahmad Haleem is keen to point out that Wataniya International is not involved in the day-to-day running of its three operational mobile investments outside of Kuwait, rather it offers strategic support to all five foreign investments, and analyses the merits of further opportunities from this hub in Dubai. Wataniya International is a free zone limited liability company and is an independent legal entity, whose shares are 100%-owned by the National Mobile Telecommunications Company (Wataniya Telecom). It is a stakeholder in four GSM licensees in Tunisia, Iraq, Algeria and the Maldives, and has a stake in a trunked radio licensee in Saudi Arabia. “We are primarily focussed on GSM and our objective is to try and find opportunities that show a return (on investment),” comments Ahmad Haleem, CEO of Wataniya International. The strategy appears on course, with operations outside of Kuwait accounting for over 50% of Wataniya Telecom Group's total revenues for the quarter to end-March 2005, despite the Kuwait operation remaining the main source of profitability within the Group. ||**|||~|Haleem200.2.jpg|~|Haleem views his company as being cautious, but quick to move when an opportunity is identified.|~|Unlike other more high-profile operators in the region, Wataniya International believes its strength lies in its ability to create value on a localised basis, with each of its operational investments required to attract funding on its own potential. “It is not our strategy to publicise targets,” retorts Haleem. “We try to do the right thing in the market that we're in. We are not trying to push our name.” As a result of the company's moves to treat each market it has invested in on its own merit, Wataniya International has not attempted to export its successful brand name in Kuwait across to the other investments. The company holds a 50% stake in Tunisiana in Tunisia; a 40% stake in Iraqi operator Asia-Cell; a 71% stake in Nedjma in Algeria; a 38% share of the Public Telecommunications Company in Saudi Arabia and a 100% stake in a GSM licence in the Maldives, acquired at the beginning of this year. None of these operators carry the Wataniya name as their brand. “Wataniya is not a product. What we do depends on the collaborations that Wataniya has made, but this is not the brand,” Haleem explains. Despite investing in markets in which established incumbents already existed, Wataniya International has had a strong showing in each of its market in so far as building up market share and growing the entire base for communications, both fixed and mobile. In Algeria, for example, Wataniya International's Nedjma network launched commercial services at the end of August last year, becoming the country's third GSM player behind Orascom Telecom's Djezzy operator and Mobilis, the mobile unit of the state incumbent. At the time of Nedjma's market entry, there were an estimated 1.5 million mobile subscribers in a population of 32 million. Market penetration has since swelled to 19% according to Haleem. “The government operator (in Algeria) at that time (of Nedjma's market entry) was not really serious about expanding mobile services and Orascom was having an excellent time of that because they were basically alone in the market, despite the fact that there was an incumbent government operator,” recalls Haleem. “If you look at the market, the entry of Wataniya extended the market and the government decided to join in and so what you now have is excellent market growth.” ||**|||~||~||~|Haleem describes investment in Iraq as a high-risk, high-return game in which its northern Iraq-based operation has been able to build up a subscriber base approaching 700,000 users in just over a year of operations. The operator is looking to extend its service coverage to Baghdad this month, and other regions of the country by the end of the year, though the situation regarding the extension of the country's three, two-year licences remains unclear. Awarded by the US-backed Coalition Provisional Authority in 2003, the current licences are set to expire at the end of this year. “We know they (the Iraqi telecoms authorities) are going to come up with a process for long-term licensing, we just don't know what it is yet,” Haleem explains. Given the imminent launch of Saudi Arabia's second GSM licensee Mobily, the Saudi market has received a large amount of investment interest, not least from Wataniya International. In March, the company signed a management agreement with the PTC to manage the operations of its digital trunked cellular (push-to-talk) network. It also acquired a 38% stake in the 15-year build-operate-transfer licensee and is undaunted by operating in the same market as two well-funded GSM operators. “Everyone does most likely own a GSM handset but GSM is not necessarily the most economical thing to have for their business, whereas our offering is unique and we are not necessarily competing with GSM there,” Haleem says. From the scope of the Saudi market, Wataniya International also picked up on the investment opportunity in the Maldives, the small island nation in the Indian Ocean that has a population of less than 350,000. While other regional operators such as MTC Group passed on the opportunity, deciding it did not fit into their investment guidelines, Wataniya International sees potential for the investment to offer further growth opportunities. “Maldives is one of the opportunities we looked at, but decided not to invest in it following a review,” MTC Group's chief strategy officer, Marwan Alahmadi explains. For his part, Haleem remains convinced that the investment in the Maldives should prove to be a sound one. “The market that is challenging from the GSM perspective is the Maldives. It has a small population but last year there were over 600,000 tourists who visited,” he comments. The GSM900 licence in Maldives is held 100% by Wataniya Telecom and is set to launch in August, with Wataniya pledging to make an investment of US$40 million in network development and island-wide GSM coverage. Incumbent operator Dhiraagu had approximately 134,000 subscribers at the end of March 2005, representing a mobile penetration rate of approximately 38%. With six licences, including its Kuwaiti operation, Haleem perceives his company as already being a sizeable one and going forward, expects to be guided by the opportunities that present themselves. “We do not believe in getting another licence for another licence's sake, so our concern right now is growing the existing companies,” Haleem says. ||**||

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