Outside the box

Dr Abdul Malek Al-Jaber, CEO, Zain Jordan, tells CommsMEA about the company's aggressive growth strategy

Tags: JordanZain - Jordan
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Outside the box Al-Jaber says the “dumb pipe” is a threat to all operators.
By  Roger Field Published  December 7, 2010

During his eight years as CEO of Palestine’s incumbent operator, Paltel, Dr Abdul Malek Al-Jaber became adept at overcoming obstacles that most telcos in other parts of the world would never have to contemplate.

While challenges such as competition from unlicenced Israeli operators and a lack of adequate spectrum no doubt caused much frustration, they also provided the perfect training ground for Al-Jaber’s current role, as CEO of Zain Jordan.

Jordan’s telecoms market might not pose the same type of challenges as Palestine, but it is one of the most competitive markets in the region, with a recent survey by Arab Advisors Group, an advisory firm specialising in telecoms, placing the country first in a ranking of the MEA region’s most competitive mobile markets.

With three mobile operators, including Jordan Telecom Group, the country’s incumbent operator, and a mobile penetration rate in excess of 100%, many analysts had questioned where future growth might come from.

The situation is probably best summed up by recent results from Jordan Telecom Group and Umniah, which showed declines in some key metrics.

However, Al-Jaber, who joined Zain Jordan in 2009, is keen to point out that Zain has managed to buck the trend in Jordan, and far from seeing its profit or revenue decline in the past year, it experienced the kind of growth usually seen in far less developed markets.

“In terms of the performance, in the year to the end of October, we had 11% growth in the revenue, and bottom line growth of 17.5%,” Al-Jaber says.

“All our KPIs have growth. If you look at recurring assets, EBITDA, the margins, even our ARPU has grown between this year and last year. This is completely opposite to the picture at the other operators,” he adds.

For Al-Jaber, this growth is down to the company’s decision to start implementing a radical new strategy in March. The strategy, which was formulated last year, involved expanding into the enterprise sector, launching fixed-line services and deploying infrastructure including several hundred kilometres of fibre optic cable.

It also involved a complete change in “mindset” from the company’s employees, Al-Jaber says. “This is a different mindset because rather than going into the price war that happened in Jordan, which our competitors jumped on, our decision was to declare that we would not become part of the price war – we would not reduce prices or start cutting prices to follow each offer our competitor makes,” he says.

“We have a clear strategy and we were determined to stick to it, no matter what the competition was doing.”

New revenue streams

The strategy consists of “four pillars” comprising customer retention, targeted customer acquisition, value extraction from customers, and expansion into new services and revenue streams, according to Al-Jaber.

“We are no longer just a mobile operator,” Al-Jaber says.  “Zain used to be totally focused on being a mobile operator but now we are a service provider, we are not just a mobile operator.

“We look at the needs of the customer. These needs could be connectivity, internet, security solutions, mobile, disaster recovery - all kinds of services and solutions. We provide our customers with their needs as if through a one-stop-shop.”

Al Jaber describes customer retention as being a key part of the telco’s strategy, not least because it already has a 52% revenue share of the Jordan market, and a market share of about 42%, and almost 70% of the corporate and consumer segment.

While Zain decided to steer clear of any price wars in Jordan, it also renewed its focus on acquiring higher value customers, rather than mass market, low ARPU users. “I want to select who I want to be on my network, especially with the market being saturated. With 110% market penetration, there is no more mass acquisition left, especially if you want to add value,” he says.

The most important pillar of Zain Jordan’s strategy, and the one that has had the biggest impact on the bottom line, was its decision to develop new revenue streams, including entry into the enterprise space.

Zain now provides services from fixed line connectivity to network security to businesses and organisations including banks and government departments, with Jordan Customs among its clients.

While mobile operators rarely stray into the fixed enterprise sector, for Al-Jaber, the move made perfect sense, largely because he saw a need for enterprises to deal with a single service provider.

“We ventured into this area of being an integrated service provider, where we provide enterprises with all three services.

“We secure them quality of service and lower costs by consolidating all of their services under one provider. By offering a complete service we are also protecting our revenue that was coming from mobile.”

With these new services gathering momentum, Al-Jaber is keen to stress that Zain gives its customers a single point of service for everything. “The customer has one front line, one person dealing with him and taking care of all his needs. This customer is happy because of the convenience, better quality services, because of the new technologies that we are using, and less cost.”

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