Global vision

Qtel's CEO on the transition from being an incumbent operator in just one country to a global heavyweight.

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By  Roger Field Published  November 13, 2008

Qtel's rapid transformation in the past three years has raised eyebrows among telecom analysts. CEO Dr Nasser Marafih tells CommsMEA how Qtel has made the successful transition from being an incumbent operator in just one country to a burgeoning global heavyweight.

Back in 2005, executives at Qtel might well have flinched at the prospect of facing competition in their home market from one of the world's leading operators such as Vodafone.

But much can change in three years, and Qtel's CEO, Dr Nasser Marafih, is the first to admit that the company is almost unrecognisable from just a few years ago.

Qtel started a strategic plan to go outside the country. This has been a key focus for us in the past few years, and we have done very well in securing that strategy.

"Since 2005, we have transformed from a one country-one operator business with just 500,000 consolidated subscribers, into a business group with interests spanning across 16 countries and over 51 million consolidated customers," Marifih says.

"Qtel started a strategic plan to go outside the country and this has been a key focus for us for the past few years. We have done very well in securing that strategy."

The string of acquisitions made by Qtel since 2005, including a 51% stake in Kuwait's Wataniya in March 2007 for US$3.8 billion, has seen the company gain a foothold in fast growing markets including Iraq, Algeria, Pakistan, and most recently Indonesia, with its US$1.8 billion acquisition of 40.81% of PT Indosat, the country's second biggest telecom operator.

But despite these strides into foreign markets, Qtel has also kept a firm focus on its home market, a country of about 1.4 million people and a mobile penetration rate of about 100%. Analysts are also watching the market closely, with Vodafone Qatar, a consortium made up of Vodafone and the Qatar Foundation, preparing to start mobile and fixed-line operations in Qatar next year, making it Qtel's first competitor in the country.

Marafih insists that the lessons of the last three years have given the company a fresh perspective on competition.

"It is a golden opportunity to fully test the quality of our customer proposition and the strength of our services," he says.

"We have a lot of respect for Vodafone. They are one of the biggest operators in the world. They bring a lot of experience and their arrival will add value to the market."

Marafih is also convinced that, despite being a small country, Qatar is big enough for both players. "There is enough room in this market and we have welcomed this development. Our preparations started a long way back and we understand what competition means as we have entered many markets such as Oman, where there was competition.

"Since 2002, we have been restructuring the whole company to get the right people in the right place and bring the right quality to the company to ensure we can compete and excel against any competitor.

"In markets like Oman and now Indonesia, we have proven our ability to compete and achieve either the first or second ranking in any market. By focusing on our customers, our network, and on our product mix, we're ready for any competition."

Marafih is also relaxed about the size of the country and the potential for growth. Qatar's population is estimated to be about 1.4 million, and the country's economy is one of the fastest growing in the world, which in turn has led to a fast growing population and high population churn, which is also expected to provide Qtel and Vodafone Qatar with a fresh supply of subscribers.

And this is backed up by Qtel's financial results. Qtel's Qatari operation experienced revenue growth of 23% to QR3.97 billion (US$ 1.09 billion) in the year to September 2008, compared with QR 3.25 billion ($892 million) in the same period last year.

Qtel chiefs have also been preparing for continued growth in Qatar and to stave off the competition from Vodafone Qatar, by continuing to invest in its consumer broadband, mobile and fixed-line infrastructure and services, and corporate managed services.

The company has been heavily involved with the "Broadband Qatar" campaign, which aims to make affordable, high speed internet connectivity available to all of Qatar's population. To this end Qtel has invested in building one of the most advanced 3G and 3.5G networks in the region.

TV on the move

The company has also scored a first in Qatar with the launch of the region's first mobile TV service. "This is a new service to the market. We did a trial during the Asian games and we were happy with the response," Marafih says.

Indeed, in October the company signed the world's first commercial mobile TV deployment contract based on DVB-H and OMA BCast Smart Card Profile technology. The system, which is now under installation, will support advanced mobile television services available anywhere in the world. People will have access to a range of content, including news and sports, via handsets.

Marafih would not be drawn on the exact timing of the launch, but confirms that it should be during 2009.

"At this moment, we are keeping the exact commercial details under wraps, and are building to a launch in 2009," he says.

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