Calling the shots

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Saudi Arabia’s second wireless carrier is pushing mobile broadband more aggressively than any other operator in the region. Mobily CEO Khalid Al Kaf tells Arabian Business why moving first and moving fast is the key to the company’s success.

Millions of Saudis come to the UAE every year, lured by the luxury brands on offer in its burgeoning shopping malls, the wide array of restaurants and the glamorous hotels.

Less of a draw, presumably, is the iPhone 3G. On a prepaid contract, the 16GB make of the Apple handset sells for $747 at Saudi’s Mobily, compared with $832 at Etisalat. The UAE telco’s iPhone packages are also significantly more expensive than comparable offers at Mobily, despite a 22 percent price cut announced in May.

Similarly, mobile broadband remains cheaper in the Kingdom, even after Etisalat, Mobily’s Dubai-based parent company, slashed its rates last month.

For $93, Saudi broadband users get one month of unlimited downloads. In the UAE, “unlimited” means a maximum of 10GB and costs $125, with a whopping $8,170 fine slapped on each gigabyte that exceeds the monthly download limit.

Yet Mobily seems to be doing just fine. More than fine in fact: net income in the first quarter surged 47 percent on the year to SR480m ($128m), beating analyst expectations. Morgan Stanley gave the company’s stock an overweight rating when it initiated coverage last month, citing the prospects for “earnings surprises”.

Mobily CEO Khalid Al Kaf attributes part of the success to the company’s growing product offering in rural areas, after concentrating on Saudi Arabia’s twenty largest cities immediately after its launch. Mobily now has a presence in 250 to 260 cities and towns in the kingdom.

“That is one arm of the growth,” he says. “Second, what I think has contributed to the growth is the multitude of services and products that we are tweaking in order to serve the customer’s needs. We offer a special product for Asian people, another one for Filipinos and another one for the Saudi nationals.”

To target Saudi’s Filipino population, the largest outside the Philippines, Mobily last month launched Mabuhay, a package offering special rates on calls to near and dear ones back home, alongside Filipino ringtones and hosted by Filipino operators.

The Najma bundle, meanwhile, is geared at housewives, with a discounted rate between 7am and 7pm, free text message subscriptions about fashion and family care, and special female-only activities around Saudi Arabia and abroad.

Al Kaf, a computer engineering graduate from George Washington University in Washington DC, joined Etisalat in 1987. In 2004 he took the helm of Mobily, which launched commercial operations in 2005.

Etisalat initially held a 35 percent stake in the company but had to sell 20 percent of its shares last year in order to comply with its licence, taking its holding to 26.25 percent.

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