Talking your way to the top

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Investment: Etisalat has inked a deal to operate the fourth GSM licence in Afghanistan.

Net income rose an enormous 65%, breaking the US$1bn mark. The company has also announced plans to re-brand itself under the new name Zain - another part of MTC's bid to position itself among the world's top 10 telecom operators.

Still, Al Qamzi brushes aside any unwanted comparisons between Etisalat and Zain. He specifically draws attention to Etisalat's success in expanding across Saudi. In 2004 the business entered the coveted Saudi telecoms sector, beating Zain to claim a stake in the lucrative market. The only other operator at the time was the state-controlled company Saudi Telecoms Company.

"We entered Saudi Arabia a long time ago when the penetration levels were only 29%," notes Al Qamzi. "Today we are reaching 86% in terms of market penetration." The company operates in the Kingdom through subsidiary Mobily.

It was not until earlier this year that Zain entered the Saudi market with a successful, and staggering sealed auction US$6.1bn bid for the licence to launch a third mobile phone operator in the Kingdom. But Al Qamzi is, as always, totally unfazed. "As a threat to us, I don't see anything there," he says of Zain's Saudi presence.

"We think we should be out there and compete with everybody and get our rights in the market," he adds, referring to the global telecoms market.
Driven by the saturation of the domestic market Al Qamzi recognises the fact that to a large extent the future lies in exploiting opportunities overseas beyond the Gulf and wider Middle East region.

"We are always thinking of how to grow more and to grow more means we have to look for the right markets. We have to visit these people in their own countries. That's where we have to go."

This strategy has been crystalised most recently in the company's expansion into Nigeria. This has involved the acquisition of a 40% stake in a venture undertaken in partnership with Abu Dhabi-based investment company, Mubadala. The move marks Etisalat's largest investment in sub-Saharan Africa, with a commercial launch scheduled for March 2008.

Speaking of the deal Al Qamzi tells Arabian Business, "that decision had been taken a long time ago when we wanted some growth and we saw that with the market in the UAE, its penetration had already reached its limit.

"The company must go on to grow more and more and we do have the potential to do that. So we went outside and this is one way on the road map we have taken."

Investments in Pakistan, Sudan and across West and Central Africa are other locations on Etisalat's map, as is Afghanistan where the company was awarded the fourth GSM licence last year. Reflecting on Etisalat's overseas conquests, Al Qamzi concludes, "we have had a very successful story until now," he adds. Rumours circulated recently that the company was considering doubling its stake in Pakistan Telecommunications Company (PTCL) to 51%. Pakistan is said to have offered Etisalat the rights to first refusal on the stake, while Etisalat acquired a 26% stake in PTCL in 2005 for US$2.6bn under an agreement that gives it management control. Al Qamzi believes that "there is a lot of growth in Pakistan."

He compares the country's potential to that seen in China and India. He doesn't, however, comment on the rumours.

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READERS' COMMENTS

Etisalat and competition
Posted by Gopalakrishnan Naganathan, dubai, uae on Wednesday 19 September 2007 at 12:48 UAE time


the telecom giant ETISALAT in GCC should go and learn how to match competition in a country like India. It can then deal with any competition. 
The UAE volume will justify such aggressive marketing. It is another matter if ETISALAT wants to remain in a market such as GCC where there is only "namesake" competition effectively.

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