Etisalat steers course for growth

Since 1976, Etisalat has grown from a local communications operator in the United Arab Emirates to an international player leading the way in technological innovation.

Tags: Etisalat International - UAEFinanceUnited Arab Emirates
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Etisalat steers course for growth Mohammad Omran says that Etisalat’s strong financials will help secure further funding in future.
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By  Roger Field Published  October 18, 2009

Since 1976, Etisalat has grown from a local communications operator in the United Arab Emirates to an international player leading the way in technological innovation. With record profits and growth over the past few years, Mohammad Omran, Etisalat’s chairman, talks about competition, growth, and innovation and how these factors will support the company’s vision.

What is your vision for the future of the telecom sector in the region now that we are emerging from the crisis?

The global economic crisis is touching the bottom of the curve. So now, can we assume that the only way is up? Certainly we must remain cautious, and it is commonly accepted that any recovery will take a significant amount of time and it may suffer multiple set-backs along the way.

It is now essential for bold leadership to ensure that operations realise significant returns and maximise the opportunity presented by the current market conditions. Now is the time for acquisitions, particularly in highly-populated and low-penetration markets such as Asia and Africa.

Etisalat is constantly studying all investment opportunities available in the telecom sector across the globe.

If there is any opportunity, Etisalat investigates and studies its feasibility before taking the decision to take part. We adopt a selective policy in dealing with investment opportunities.

This is in line with its search for new opportunities in emerging markets and we only compete where the opportunity adds to Etisalat’s success stories in overseas expansion.

Each new market for Etisalat reinforces its reputation for quality and reflects well on the various stakeholders, including shareholders, partners and the community in a way that enables the company to add value to the markets it operates in.

We will keep evaluating investment opportunities wisely according to the international financial and technical regulations and standards approved for global investments, in a way that guarantees the rights of shareholders and does not put them at undue risk.

Was Etisalat’s rating affected during the financial downturn?

Despite the global financial crisis, Etisalat successfully maintained its international ratings at the same level as in 2008 - which are considered among the highest of all globally rated telecommunications companies. 

The ratings demonstrate confidence in Etisalat’s profitability, cash flow, financial policies, and portfolio of overseas assets, the value of which has increased significantly. It also reflects its excellent relationship with the UAE government, which is also the company’s majority shareholder.  

Etisalat’s strong operating performance and prudent financial management during the course of last year will help Etisalat further diversify its funding sources and enhance our negotiating position when securing future financing deals from debt or capital markets.

Please tell us more about your financing strategy and the options you are currently investigating?

We are currently working on a program to issue $500 million of bonds to the international market by the end of this year. This could be used to finance Etisalat’s expansion to the next stage, and also to increase the financial options available to us.

This does not mean that we are committed to use this option in our international expansion since we have other financial instruments available to us along with sufficient liquidity.

What are the areas that will drive your revenue growth in the coming years?

Change in the world of telecommunications is a constant factor with new business models, technology, and different technologies converging.

We are excited about ongoing developments in the Information and Communication Technology (ICT) area, and seek to be amongst the first to embrace such technology to add further value for our customers, who we exist to serve.

An area of significant growth potential we foresee for the UAE marketplace is in mobile commerce. There have been some remarkable success stories already in some parts of the world. And we would like to not only replicate those successes, but perhaps exceed established benchmarks.

Applications in mobile commerce present an excellent opportunity for us to capitalise, given that Etisalat is already a known as a telecom leader in the region.

To do so, we have initiated certain steps, including our tie-up with some banks. Through this we aim to revolutionise banking technology in a pilot program enabling customers to make day-to-day purchases and pay for them through their mobile phones.

Further to this, the facilitation of money transfer through mobile phones to India opened up a completely new service and revenue stream for the corporation.

We are also continuing to develop our portfolio of non-core services through Etisalat Services Holding LLC. This includes business in diverse areas such as smart card manufacturing, submarine cable maintenance and deployment, training and education, roaming clearing house, facilities management as well as directory enquiry services and land cabling projects.

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