In Full Flight

Ross Cormack, CEO of Oman’s second operator Nawras, has had a lot to smile about since CommsMEA last spoke with him in September 2005. Since then Nawras has focused on building upon its market launch in an attempt to push past its already formidable 30% market share. Christopher Reynolds asks Cormack about Nawras’ current operations and plans for future expansion.

  • E-Mail
By  Christopher Reynolds Published  January 3, 2007

|~|corPicture-3i.jpg|~|Nawras CEO Ross Cormack is looking to attract new enterprise customers following the signing of a preferred operator contract with Oman’s Society of Petroleum Services.|~|Ross Cormack has good reason to be upbeat about the Nawras’ current operations, given the strong progress it has clocked since debuting on the Omani mobile telecoms scene in March 2005. His primary aim is to now concentrate on further removal of the barriers that prevent customers from switching to a new operator. Since launch Nawras has been careful not to adopt an overtly aggressive stance in the market, forgoing a price-war strategy, typically resulting in short-term gains as opposed to long-term loyalty. Instead, the operator is focusing on fresh branding, innovative distribution and new products and services. Nawras’ brand is something that Cormack has recently endeavoured to expand upon with the Nawras Goodwill Tour, which entailed 40 Nawras employees travelling across Oman in order to help improve underprivileged communities. The initiative is one that further cements Nawras as an Omani company according to Cormack, and provides a new and innovative channel through which to disseminate the operator’s brand values. “We have provided mini buses, we have bought computer centres, each time we go we end up with fantastic events and, by chance, it is probably the best team building exercise I have ever seen done,” says Cormack. It is this innovation and brand development that, according to Milan Sallaba, director of Mercer Consulting Dubai, has provided the main avenue of differentiation between Nawras and Oman Mobile. He believes the onus is now on Oman Mobile to focus on being more innovative, agile and commercially astute, if it wants to prevent Nawras from gaining a further foothold in the market. Sallaba suggests Oman Mobile leveraging its unique assets, including focusing on fixed mobile convergence, which would be hard to replicate by the entrant. Sallaba believes that the outlook and operational direction that Nawras has followed has allowed the operator to avoid the pitfalls some new entrants face in terms of eventual stabilisation and operation scaling. “The situation in Oman has been one of a monopoly with Nawras as a second player. So part of Nawras’ success is just being the alternative, which is always good. What it has actually been able to do well is to position itself in a very attractive manner, without having to destroy much value from a pricing point of view, just being slightly cheaper and focusing a great deal on customer services and branding,” Sallaba describes. Network coverage is still high on the agenda for Cormack and Nawras has used considerable amount of resources recently on establishing a national roaming arrangement with Oman Mobile, which allows Nawras subscribers to continue using mobile services in areas not yet covered by the operator’s own network. Cormack has also been quick to address customer demand for international roaming, though admits at first his company had some ground to gain in this area. “With international roaming we had to play catch-up, but we caught-up quickly. We started with five countries at launch, as of December 4 we reached 108 countries, that is 211 operators in 108 countries,” Cormack states. “That is many more destinations than Omanair travels to, or any local airlines, so the chances are wherever you go you are likely to have coverage there,” he adds. As well as gaining ground on international roaming coverage, Nawras has ensured prepaid roaming would operate on the same level as postpaid, with callback roaming allowing customers to send as well as receive SMS while travelling. Cormack has also ensured the transparency of roaming services, with customers able to access a dedicated web site that informs them what countries Nawras extends coverage to, the price of a local call in that country and the price of a call back to Oman. “All of this is intended to add to the comfort and utility of the services. We want to take away people’s discomfort with moving to a new operator, making it as simple as possible.” A major factor in allowing customers to move from Oman Mobile to Nawras as smoothly as possible was the implementation of mobile number portability (MNP), which was introduced in August 2006. With the introduction of the number porting system came a significant contract for Nawras with Oman’s Society of Petroleum Services (OPAL), which had stipulated the ability to port numbers in order for Nawras to be selected as its preferred mobile service provider. Cormack now places a great deal of emphasis on expanding into the enterprise sector and the OPAL agreement sees Nawras being recommended to over 200 companies. Mercer Consulting’s Sallaba believes the award of the OPAL contracts is an important development for Nawras as it associates the cellco with a prestigious set of companies, which in turn can support the operator’s brand and stimulate further growth. “The agreement essentially boosts Nawras’ presence in the corporate sector, in that it offers volume discounts, easy payment options, dedicated account managers, and other cost-effective products and services to OPAL members,” Sallaba explains. As well as MNP Cormack has been busy expediting international data connectivity for enterprise customers with Nawras’ business services and GPRS roaming capability, which allow customers to roam in both directions around the Gulf and major destinations in Europe and Asia. According to Cormack, part of the OPAL arrangement was to supply three base stations that do not currently have mobile network coverage and also to provide further coverage, as is required, for oil prospecting, or other geological projects. “That was one of the key differentiators that was very important for OPAL, it has many corporate customers, so it quite rightly made us jump a lot of corporate hurdles,” says Cormack Nawras’ recent corporate courtship does not, according to Cormack, mean the operator is any less focused on the consumer segment. A new distribution deal with the Oman Post Office has provided Nawras with an extra 94 distribution locations throughout the sultanate, bringing the total to 600. Nawras distribution is unique in Oman as it does not focus solely on operating its own branded stores but uses independent distribution consisting of two chains: one is the premium distributor that sell postpaid as well as prepaid, the other is volume prepaid distributors, which form a series of master distributor arrangements. According to Cormack, Nawras has seen an increase in the proportion of sales deriving from independent distribution. ||**|||~|milanPicture-2.jpg|~|Milan Sallaba, believes Nawras has been wise in avoiding price competition in Oman. |~|“We used to have a vast majority of sales coming from our own branded stores. Well our stores have not slowed down by any means, but the proportion has shifted to the independent distribution, so we get the majority of our customers coming from independent distributors,” says Cormack. “They take our products to places where people live and work around the country.” Cormack insists that, when it comes to services, Nawras has a policy of only releasing what its employees have tested themselves, and it is this approach that the company has adopted with respect to the launch of 3G services. Nawras invited a number of corporates and individuals to trial Nawras’ nascent 3G network, which currently extends over five city centres, including a sizeable portion of Muscat, on a complimentary basis in order to ascertain usage patterns. Whether or not the core and radio network constitute a core competency of a mobile provider is one of the most strategic questions for any operator. Sallaba believes that, Nawras’ ability to mobilise a sizeable and qualified team on the ground to oversee the network arrangement it has in place with Ericsson has helped regulate performance. “And a second vendor was also engaged to set up transmission sites, which in turn put the original vendor under pressure to perform,” he says Nawras has invested over US$195 million in its Omani operations, expanding its coverage from 85% at launch to 96%, with over 160 base stations in Muscat and Salaleh, and has pledged to spend a further US$1.7 billion over the next ten years. The operator recently announced it had reached half a million subscribers, representing 30% of the market, and witnessed overall market penetration rise to 66%. Nawras recently extended its network infrastructure agreement with Ericsson, finalising a US$50 million three-year contract during December 2006. The contract, which was subjected to an international tender process, is a continuation of Ericsson’s partnership with Nawras to deliver advanced EDGE network infrastructure across Oman, allowing high-speed data access in remote locations. According to Nawras’ chief technical officer, Peter Rubeck, the new deal will enable Nawras to increase its coverage to virtually all of the population in Oman, and will cover radio, core networks, site acquisition, planning, and civil works. Data usage has grown by a factor 80 since February 2006, according To Cormack, contributing 15% of Nawras’ total service revenue. “What we see is that a great deal of people are using EDGE to access the internet. It is a product we reintroduced this year called Nawras Internet, and we have measured the data rates all across the usage of the EDGE network and it averages ISDN level speeds,” claims Cormack. “This is in conjunction with the fact that we have almost the world’s lowest SMS prices in Oman, so data is a well used service.” However, the major revenue-generating product for Nawras remains voice and Cormack claims he is committed to ensuring customers receive an innovative service that reflects the core values behind the Nawras brand. Prepaid and postpaid customers are not treated any differently in terms of products and services and monthly subscription fees have largely been forgone in favour of pay-as-you-go packages, helping stimulate an overall 32% growth in market penetration since Nawras’ market entry. “The original proposition was a consumer one: easy to buy, easy to use, easy to get help, easy to pay for.. It is a reflection of our branding strategy and we have actually seen an increase in minutes of voice usage,” says Cormack. ||**||

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