Ready to reach out

Siemens Home and Office Communication Devices (SHC), the communications division of Siemens Middle East, operates in its own right in the region and intends to beef up its presence in the Middle East as well as Africa and India. SHC's CEO, Sameer Ahmed, reveals the drivers behind its ambitious expansion plans and what the channel needs to do to keep up.

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By  Julian Pletts Published  September 10, 2008

Siemens Home and Office Communication Devices (SHC), the communications division of Siemens Middle East, operates in its own right in the region and intends to beef up its presence in the Middle East as well as Africa and India. SHC's CEO, Sameer Ahmed, reveals the drivers behind its ambitious expansion plans and what the channel needs to do to keep up.

What are SHC's activities here in the Middle East?

Siemens Home and Office Communications Devices looks after communications devices from Siemens. We have three portfolios targeting the home market: cordless wireless telephony, DSL broadband products and WiMAX CPEs. We pioneered cordless voice technology in the region and have been here for the last five or 10 years. SHC is most popular for its brand Gigaset and its cordless telephones.

What about from a commercial perspective? Does the office sector account for a large proportion of your business?

Etisalat is supplying our model with particular services so you would find our broadband product in more or less every house in the UAE. Compared to others we are probably the market leader.

We deal with customer premises equipment and utilise two main sales channels - retail and telecom operators. We offer a complete end-to-end solution. In the UAE, Betterlife, which is part of the Easa Saleh Al Gurg Group, serves as our distribution partner.

Regarding the size of the business, the home sector is larger because our main product lines are aimed at this market. We offer SOHO products, but we are not in the SMB segment.

Siemens SHC has had a relatively low market visibility in the Middle East. Why is this?

I disagree with us having limited visibility. In the cordless technology-focused retail market, our visibility is very high compared to others. Siemens Gigaset is recognised across the entire region.

Is increasing the visibility of the SHC brand a key part of your future plans and if so what are your intentions?

Yes, of course. Our year-on-year growth is at least 50%. We started from the UAE and now we are present throughout the Middle East. We have regional offices in Morocco, South Africa and in the UAE. We are definitely going to increase our presence. You will not find a cordless phone outlet, such as Sharaf DG, Carrefour or Geant, without a phone from Gigaset.

The UAE is obviously a major market for you. But what is your channel structure in the smaller markets?

Markets have different sizes and different potentials, but when we look at this market we see the entire region. We are committed to being present in all of the countries that exhibit some potential and in each market it is our strategy to have in-country distribution partners.

Why do you favour that model?

It gives us more focus in the market and we can work with our distributors to improve our visibility. We have a separate model for each country and this model has been successful for us. Instead of using a regional distributor and having a multi-layer organisation, we are able to offer good margins and benefits for our partners. In the future we are not going to change our channel structure, but we are going to up our geographic presence.

What investments do you expect from potential channel partners?

Because we work with power retailers they normally have structure already. They do, however, have to invest in manpower, training and point-of-sale efforts. Investments do not have to be very extensive to move forward, but we do need the retail channel in the Middle East to look at their manpower and infrastructure.

The distribution chain clearly plays an important role in your business. What skills and capabilities do you look for?

The most important thing for a distributor to have is reach within a country. We look at the depth of the distribution that they are managing. Of course, their financial strength is important as is their know-how, past experience and their understanding of our product lines.

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