Show of strength

The opening up of the region’s telco services next year means Etisalat faces competiton for the first time in its history. Mohammed Hassan Omran reveals how the giant intends to hold on to its customers

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By  Peter Branton Published  October 1, 2005

|~|omran-2body.jpg|~|Mohammed Hassan Omran is confident that Etisalat’s quality and variety of services will retain its market lead. |~|Next year, Etisalat — the UAE’s incumbent telco — faces competition for the first time in its history. It is a development that should not surprise the firm, as it believes it is doing enough to prepare its staff and infrastructure to offer a superior service to that of the new competitor. Etisalat chief executive, Mohammed Hassan Omran, speaks about the company’s current focus and the “ammunition” it possesses to keep the competition at bay. This year’s Gitex must be of particular importance to Etisalat given the entrance of a new operator next year. We have been at Gitex every year for many years now and we are going to be present at this year’s event with increased strength. We are ready for the new era of competition. We are ready to work and show our commitment to our customers in this new era. When you say Etisalat is ready for the entrance of competition, what has this involved in terms of preparing the network and the mindset of Etisalat employees? First of all, for a long time Etisalat has been operating as if there was already competition in the market, because we know that if we do not deliver to the market, when the new operator does in fact arrive, there will be strong competition. Now, as this time is approaching, we have put even more focus on certain things, among them are the legal issues in the mobile communications sector and the internet. In respect of mobile services, a few months ago Etisalat reached the four million subscriber milestone and although that represents a penetration rate of 100%, which is very high in international standards, we still feel that the UAE market is still growing and we are pushing more and more to add more subscribers and more satisfied subscribers. As to services, which is the [most] important thing, we are giving Wasel prepaid subscribers the option to convert to post-paid. This will allow them easier roaming and more regular payments because with Wasel you have to pay in advance. So this is an area that we will be announcing at Gitex or even before Gitex. What do you believe the main areas of competition will be when the new operator is launched? I think the main element of competition will not be the pricing. Pricing is going to be adjusted from time to time but this is not the important thing. It is services that are important — the quality of services and the variety. That is the area that will see real competition in the market. Are you confident of Etisalat’s ability to compete effectively in offer of services? Of course, though we are in no doubt that there is a new operator that is trying its level best [to attract subscribers], but we have a lot of ammunition also. On the fixed-line front, what developments are taking pl-ace there? Where does the operator stand with regards to its NGN (next generation network) plans? I call it the “revival of the fixed network.” Fixed networks all over the world have witnessed some kind of slowing down over the last several years and this includes the UAE because of mobile services taking over. Fixed lines have reached saturation point in many countries, not only in the UAE. But now [we are aiming to generate] mo- re usage on the fixed lines [and] are deploying an NGN, which can offer voice, data as well as video. We intend to introduce it on a larger scale in the UAE, especially in the new areas of developments where we are going with new networks. With the new technology and NGN, where you are able to offer the customer triple play, this will revive the usage of the fixed network. At Etisalat we are in a better position because we own e-vision (the cable television broadcaster) and e-vision will be used to provide the video service. So the NGN will be able to deliver high-speed data and voice. And we have that intention. Our aim is to expand e-vision using DSL because it is cheaper than fibre. We are experimenting using DSL [for television]. This is the way we have to develop the market. It will not only be for internet. With broadband connectivity at home — you should be able to use it for online gaming, home shopping and other services. Now regarding NGN, we established a small network earlier and we are expanding it. Especially in new areas we are expanding by installing NGN and I expect that before the end of next year a big portion of the network will be based on NGN. What do you think about the rate of growth of data services in terms of their impact on overall service revenues? Data picks up when there are enough applications there. We have witnessed some applications coming but need many more to come, including gaming and quoting economic reports that are time sensitive, like stock market quotes and so on. We see the market for data developing in the UAE in both 2G and 3G environments. And how would you describe the state of 3G services in the UAE? 3G is now running in areas in Dubai and Abu Dhabi and some other cities. We haven’t expanded it fast because there are two elements that are needed to roll out 3G — terminals and content. We see more terminals coming with better functionality and lower cost, as well as more content. We are evaluating the next wave of wireless technologies like HSDPA and we aim to experiment with it sometime later this year and introduce it soon after that. With broadband coming to the mobile, it becomes like a complement for the fixed line. People will watch videos at home and then on their mobile. BT has also introduced the merger of mobile and fixed where when you go home you can use the home network with your mobile… so we are looking at that also. In new developments in Abu Dhabi and Dubai we have started talking to them and our aim is to introduce it. What is Etisalat’s progress in the broadband space? We have over 50,000 residential digital subscriber lines (DSL). Our target is to move to more than 100,000 by the end of the year. By 2008, we aim to be among the top countries in the world in broadband. How do you view the development of Etisalat International’s rapid expansion in recent months? The only operation that has started business is our operation in Saudi. And that one is successful in all elements. First of all we achieved one million subscribers in less than 90 days after launching, which is a very remarkable achievement. The operator is achieving a better than expected average revenue per subscriber. All this is very positive for this region and very positive for our vision of international expansion. We have been evaluating several more markets and we will continue evaluating markets and wherever we see there is value for our shareholders and value for Etisalat, we will pursue that opportunity. Will Etisalat restrict its investment to the Middle East and Africa region, or would the operator consider investments further afield? Sometimes one thinks like that, but you know in the new world there are no real borders. That means we will be open for any good opportunity that adds value to our services, our name as well as our shareholders. Etisalat appears to have the financial capital to continue its rapid expansion, but do you believe it also has the human capital to support this expansion? I believe that human resources are the most important factors for this expansion. And I believe the region has a good capacity for such human resources, which we have used in Saudi Arabia for example. In Saudi Arabia we basically used the staff of Etisalat and built around it from Saudi Arabia and the region and we have taken back some of those resources after we established the right structure in Saudi Arabia, for example. This is something we do in every market because we do have the human resources and we are using them.||**||

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