Digital visions

Osman Sultan reveals ambitious plans to expand Du in the digital space. By Roger Field

Tags: Emirates Integrated Telecommunications Company United Arab Emirates
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Digital visions Osman Sultan is keen to contunue attracting higher value customers and also to find new revenue streams in the digital space. (ITP Images)
By  Roger Field Published  November 16, 2010

After leading Du, the UAE’s second telecom operator, to take a mobile market share of about 38% in just three years of operations, CEO Osman Sultan is showing no signs of flagging.

Certainly, Du’s achievements to date have been impressive, with the market share achieved by the telco going beyond what most market analysts had expected, but Sultan is obviously hungry for more.

“In a market where there was a lot of question marks, where the level of penetration has reached levels where one can question how far is there any possible growth, Du demonstrated in the last 18 months a steady and very encouraging growth in terms of top line,” Sultan says.

According to data from Du and Etisalat, the second operator estimates that it now has a market share of about 37%, which is considered high for a three year old operator competing against a strong incumbent player such as Etisalat.

Sultan adds that the estimates of Du’s market share are based on active subscriber numbers released by both of the UAE’s telecom operators. And while some people have questioned how long this level of growth can be maintained given the level of saturation in the market, Sultan adds that the company is not only expanding its customer base but is also seeking to improve its efficiency, allowing it to transform more of its revenue into profit.

“You can get top line growth without being efficient in getting these revenues, so now the company is becoming more and more efficient,” he says. “The company is improving its operational efficiency. There is always room for gains in efficiency.” Furthermore, Du has been aided by what Sultan refers to as an ongoing “flow” of people and business coming to the UAE, which has helped the operator to acquire new customers.

The company has also been successful in targeting higher end customers in the past couple of years. More than 5% of Du’s customer base is post-paid, according to Sultan, and the company is keen to expand this further. “We more than doubled our post paid subscriber base in the last nine months of the year,” he says.

Sultan adds that an important component of the company’s growth in the pre-paid segment was its successful Blackberry and iPhone launches in 2008 and 2009 respectively, combined with its Elite plan.

“All this contributed that we were successful in moving down that track. We always said that once our infrastructure is solid enough that we can go and have a very sustainable claim towards these high end customers,” Sultan says.

With the UAE’s Telecommunications Regulatory Authority now in the process of opening up the entire country to fixed line competition, Du also hopes to replicate some of the success it has had with mobile in the fixed voice and data business.

“That will allow Du to have the ambition to start offering the full fixed voice services, internet services, pay TV services nationwide, in all emirates within the UAE, and that is a track for growth that is very valuable for us,” Sultan says.

“The growth track on the fixed business is broadband, because the name of the game is broadband for the coming years, be it fixed or mobile,” he adds.

While competition in duopolies such as the UAE is often marred by similar pricing between the telcos, Du recently broke the mould in the broadband sector, by offering its customer far higher bandwidths at no additional cost.

While fixed competition is not expected until the end of the year or early in 2011, Sultan insists that Du has been instrumental in pushing the boundaries of the market.

“I don’t need much to convince people of the momentum in the UAE since Du entered the market. Just look at the pricing, the benefits that customers have.

“We are really now more comparable to more mature markets, what you can see in Europe, but we still want to offer more.”

Infrastructure sharing

These improvements no doubt gained additional importance following the TRA’s decision to implement fixed infrastructure sharing in the UAE. In terms of the time frame for infrastructure sharing, Sulan says that Du is ready. He confirms that some people have already used Du services over Etisalat infrastructure and vice versa as a pre-commercial, and he thinks that services will be launched commercially early next year.

Sultan is also keen to stress the regulatory advances that have been made in the UAE’s telecoms sector in a relatively short period of time. “The regulatory authority is a body of governance, and there has been a very strong political willingness to have this body playing its role perfectly,” he says.

“All decisions have been preceded by consultation. We have given our point of view. Other parties gave their point of view, sometimes these decisions came in line with what we expected and other times they didn’t,” says Sultan, adding that the TRA has only existed for a few years. “The progress is really noticeable and something we should congratulate, ourselves and the country.”

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