Ready for anything

Next year UAE incumbent operator Etisalat is set to face competition for the first time in its history. It is a development that does not surprise the incumbent, 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 officer Mohammed Hassan Omran speaks about the company’s current focus, and the ‘ammunition’ it possesses to keep the competition at bay.

  • E-Mail
By  the Gitex Times Staff Published  September 29, 2005

|~|ready1.jpg|~|The Etisalat team is ready for market liberalization, says Mohammed Omran. |~|Gitex Times: This year’s Gitex must be of particular importance to Etisalat given the entrance of a new operator next year. Mohammed Hassan Omran: We have been at Gitex every year for many years now and we are going to be present at this week’s event with increased strength. We are ready for the new era of competition in the UAE. We are ready to work and show our commitment to our customers in this new era. GT: 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? MO: 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 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 to 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 for services, which are the important thing, we are giving the large number of 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. GT: Does this mean Etisalat is going to permit prepaid Wasel subscribers to keep their same numbers as they move to contract subscriptions — along the lines of number portability? MO: Yes certainly, though the technical term is not called number portability because this refers to keeping the same number when changing operators. But it is right that the same Wasel number can convert to become post-paid. So maybe in a different language you are right, it is number portability within the two systems at Etisalat. GT: You’ve mentioned the fact that mobile subscriptions are still rising despite growing beyond 100% in the United Arab Emirates. When do you expect the growth to start slowing and when do you forecast market saturation to occur? MO: I have been working in the telecoms sector for the last the 28 years and I don’t see any scope for saturation. Why? Because up until now, most of the communication has been person-to-person, human being-to-human being. In the last few years, we have witnessed more data calls and that is only set to grow. I also expect machine-to-machine communications to play a larger role in the future. Machines being maybe your car or your home or whatever — I mean anything that can be given the ability to communicate with another machine. This is not something I expect just to happen in the UAE but everywhere, though the UAE is always ahead and I see that such developments can occur quickly in this area in the UAE as other things have done in the mobile business. GT: What do you think about the rate of growth of data services in terms of their impact on overall service revenues? MO: 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 United Arab Emirates in both 2G and 3G environments. GT: What do you believe the main areas of competition will be when the new operator is launched? MO: I think the main element of competition will not be the pricing. Pricing is going to be adjusted from time to time, as it is in every market, but this is not going to be 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. ||**|||~|ready2.jpg|~|From its base in the United Arab Emirates, Etisalat is looking to expand into other markets, especially as it has already enjoyed great success in the Kingdom of Saudi Arabia.|~|GT: Given what you said earlier regarding Etisalat’s state of preparedness, do you remain confident that Etisalat will be able to compete effectively in the offer of services? MO: 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. GT: On the fixed-line front, what developments are taking place there and where does the operator stand with regards to its NGN plans? MO: 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 in many countries, not only in the UAE. But now [we are aiming to generate] more usage on the fixed lines [and] are deploying an NGN (Next Generation Network), which can offer voice, data as well as video. We intend to introduce it in 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 many 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. GT: And how would you describe the state of 3G services in the UAE? MO: 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. GT: Do you think there is scope for prices to fall, or at least be rebalanced in terms of the cost of local calls compared to the cost of international calls? MO: When we were the single operator, there were major disparities, you are right. Part of it was the fact that we started by offering local calls free of charge, and for AED 15 per month, something like US$4 a month you are getting unlimited local calls, and this is of course is not the right direction when the market opens. We will work on rebalancing the tariff with the regulator, and this will take quite some time in order to be understood by the customer and within that rebalancing process we will also be looking at the cost of international calls. ||**|||~|ready3.jpg|~|Etisalat’s Mohammed Omran believes that the arrival of competition in the UAE’s telecommunications market will not lead to a price war. |~|GT: So what steps are actually being taken to develop this tariff-rebalancing programme? MO: It is complex, it is not that easy. We have started the study with several consultants and we have started the dialogue with the regulator and some time in the future such a thing will start, but always when we do that, we take into consideration how we can offer our customers better service without the negative effect of this rebalancing. We have to look [for] ways where we do not affect low-income people who are using it as kind of a security. We are looking at different kinds of solutions but it is a major issue GT: What is Etisalat’s progress in the broadband space? MO: 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 terms of broadband. GT: How do you view the development of Etisalat International’s rapid expansion in recent months? MO: The only operation that has started business is our operation in the Kingdom of Saudi Arabia. And that one is successful in all elements. First of all we achieved one million subscribers less than 90 days after launching, which is a very remarkable achievement. Currently, the operator is achieving very good, better than expected average revenue per subscriber. All this is very positive new for this region and it is also 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. GT: Will Etisalat restrict its investment to the Middle East and Africa region, or would the operator consider investments further a field? MO: Sometimes one thinks like that, but you know in the new world there are no real borders. That means will be open for any good opportunity that adds value to our services, our name as well as our shareholders. GT: What would you say to detractors that say Etisalat’s focus on external markets may be weakening it on the domestic market? MO: No. You see when we look outside [of the UAE] that does not mean we forget the local market. The local market is the main market for us and will continue to be our main market. We are focusing on the local market, we are looking at expanding [locally], we are looking at offering our subscribers better service, and we will continue to do that. GT: Etisalat appears to have the financial capital to continue its rapid expansion, but do you believe it also has the human capital to continue this rapid expansion? MO: I believe that human resources is the most important factor for this expansion. And I believe the region has 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 within 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 to the best effect. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code