Capital growth

Over 30 years Etisalat has serviced the UAE with the latest in mobile technology, growing to become one of the region’s great success stories. James Bennett talks exclusively to chairman Mohammad Omran.

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By  James Bennett Published  December 10, 2006

|~|Omran,-Mohammad-200.jpg|~|Expansion plan: Etisalat has projects currently underway in the UAE capital Abu Dhabi and has its sights set on further overseas expansion.|~|Over 30 years Etisalat has serviced the UAE with the latest in mobile technology, growing to become one of the region’s great success stories. James Bennett talks exclusively to chairman Mohammad Omran. It’s six o’clock in the evening at the Arab Strategy Forum in Dubai and Mohammad Omran, the chairman of the UAE’s largest telecoms operator Etisalat has just finished giving his expert analysis during one of the event’s panel sessions. Time is short and I need to pin him down for an interview. Luckily I know I’ll recognise him when I see him. And in front of me is the reason why. There he is, surrounded by hordes of reporters eagerly trying to nab a few soundbites for the following morning’s business pages. Fortunately for Arabian Business as soon as I mention where I’m from he turns full tilt and agrees to give me as much of his valuable time as I need. But it’s not until we walk out of the seminar room door that I realise the interview might not take place after all. “He’s my responsibility, I look after everything he does,” booms a stern voice suddenly. I look up startled and there is another familiar face that I can’t quite place in the heat of the moment. “I look after his diary and to get an interview with Mr Omran you must go through me first. You cannot have any time with Mr Omran,” continues the imposing figure dressed in dark national robes. The chairman then strategically intervenes, simultaneously giggling to himself and leaving me feeling slightly confused. “Don’t worry about him, he’s only the richest man in the UAE,” he smiles. I then realise who has just fooled me. It is the richest man in the Emirates, his name Abdul Aziz Al-Ghurair; his title CEO of Mashreqbank; his fortune, US$6.9bn; and his rank 77 on the latest Forbes list of global billionaires. Seconds later we are all laughing together, but on a serious note Omran realises time is precious and there is a lot to discuss. Down to business. Highest on his agenda is Abu Dhabi’s astronomical growth and its huge expansion plans over the coming years – something the telecoms giant has experienced side by side with the emirate during its 30-year existence. The capital is a key centre for Etisalat with 60% of the business owned by the federal government (40% shareholders), its headquarters located in the heart of the booming city and its shares listed on the local stock exchange. Omran says this importance and relationship is set to grow even more with the increasing changes in infrastructure and property development Abu Dhabi appears to be announcing almost every 24 hours. But Etisalat’s expansion will have to more than match the city’s if the company is to maintain its home market dominance. “A lot of change has taken place in Etisalat and in the capital in 30 years and we have been an active partner in developing the telecom network in the city. We need to take into consideration that it is the largest in the UAE and that it has a lot of areas that need special services. Take the western region, for example, there is a lot of moving sand as well as very long roads. With this we have to develop a special network to cover mobile users and residential areas.” If I were to say that the company’s progress over the past few years has been staggering, it would be an understatement with Etisalat spreading its communications wings to Afghanistan, Sudan, acquiring the third licence in Egypt for US$2.9bn, a 26% in Pakistan Telecom and establishing a two year-old stranglehold of the Saudi Arabian sector under the brand name Mobily. However, the home market still remains core to the business, as does its firmly routed principles that were established three decades ago. “Our coverage in Abu Dhabi, Dubai and the other Emirates is always one standard and always the same anywhere across the UAE,” he says. “This was advocated by our board a very long time back in the eighties when they decided that any settlement of six houses or more should have the same service as in a main city,” Omran adds determinedly. Despite ensuring that Etisalat has delivered a consistent product over a long period of time, Abu Dhabi’s massive expansion plans cover a large section of its 200 islands and will almost certainly pose a series of huge challenges to the chairman and his staff over the coming years. Omran, however, says he is ready to face them head on. “The only issue is that Abu Dhabi is very large and we have to invest differently to maintain that coverage. Over the past few years there has been a lot of development and it is increasing all the time. This is especially the case with the development of the new islands. “This will need specific solutions that we are working on with those bodies that are developing those areas. We will need to provide the latest technology based on a fibre optic network and definitely based on an IP-based network in order to have not only mere telecom connectivity, but also services like smart phones.” Omran is more reserved, however, when it comes to discussing the amount of investment needed to keep up with the UAE capital's growth. With billions of dollars needed investment is no longer guesswork for modern-day regional companies and the chairman has instilled a strong forecasting system for every city in the UAE as well as every location Etisalat now covers globally. “We review it [the investment] every year,” he says carefully. “And we have periodic forecasts for every city in the UAE, while in Abu Dhabi we have a special team that will forecast the need over the coming years and this is reviewed periodically so that we have updated information. Based on this we design our network to cater for such needs.” Careful expansion planning and budgeting, strategic acquisitions and forecasting is part and parcel of Omran’s huge responsibility in a company that was ranked 140th in the Financial Times Top 500 corporations in the world in terms of market capitalisation. Not only outside the oil sector it is also one of the largest contributors to development programmes for the UAE federal government. But despite understandably referring me to his COO on the subject, Omran is reluctant to talk about the biggest homegrown challenge he and the company will face at the beginning of next year – the launch of second telecoms operator du that is promising cheaper calls and better connectivity. “2007 will definitely be a big challenge for us,” he says raising the tone of his voice as if to get the point across. “We like challenges and we welcome the opening of the market. In earlier statements I have said that the UAE was perhaps late in opening the marketplace. But in opening the market you give the customer more choice and everyone can excel in offering their best services.” On the subject of du CEO Osman Sultan and his team offering cheaper calls Omran says the one thing that constantly changes in the telecoms sector is price, and that Etisalat has changed its prices and pricing structure “for the better”. One of the ways it plans to achieve that is to charge by the second. However, Omran adds that price is “not the only element needed by the customer”. “We always accommodate this element, but there is also quality, type of service, and change in service needs and the importance of meeting this need is always changing. We have to stay on our toes.” And that is exactly what Omran and his business has done throughout the years that Etisalat has been in operation. From bringing fixed line services to the UAE in 1976 to introducing Blackberry handheld wireless email devices in 2006, the business has been at the forefront of technological change and advancement over three decades. The chairman, however, says the major turning point came when Etisalat became the first telecom operator in the region to introduce a mobile phone service in 1982. “There have been many key points but the important thing in the company is that we work to become a leader and that means accessing the latest technology. Launching mobile services was a major thing because I remember our first forecast in 1982 was that 5000 mobile lines would be enough for three years. Now we can install 5000 in one day.” Today Etisalat has over five million customers with 2006 proving to be a huge success with growth levels reaching 30% and, according to Omran, market growth in 2007 is set to “rise even higher”. He warns however, that Etisalat will have to watch its back with du chomping at the bit to grab a slice of the Emirati telecoms pie. “We shouldn’t forget that there will be another operator there next year and they will take some market share. But we always work to be in the lead.” Despite the UAE telecoms market limiting its liberalisation to two government-owned companies to form a duopoly, Etisalat has not rested on its laurels, pushing the boundaries of change and investing heavily outside its traditional marketplace. Its Mobily business in Saudi Arabia, for instance, has made great strides in the two years it has been running, claiming to have the country’s largest number of 3G subscribers, expanding its GSM and GPRS network under which it aims to cover 90% of the Kingdom by the end of this year and increasing its customer base to close to five million. Is Etisalat then the telecoms equivalent to the all the equally all-conquering property giant Emaar? Omran is impressed and calls the comparison “flattering” but secretly, and without telling me, knows the business is on the right track. You can just tell. So where next? The obvious choices must be a further concerted push into Africa, and to strategically grab some of the Chinese and Indian telecom markets. The chairman of the board doesn’t disagree, well, not with all the suggestions at least. “We are becoming very well-known in the region and with the new logo and the Reach campaign we introduced earlier this year we intend to use it across the world and in our expansion,” says Omran. “China we haven’t studied much but India we are definitely watching. The valuation for another existing operator is still very high. We are watching it and when the time is right we will go.” And as other journalists suddenly realise I have taken more of Omran’s time than they would like, they begin to re-circle him and pester him with questions. Next time I’ll definitely find him more easily.||**||

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