Calling the shots

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Mobily had 11 million subscribers after its first two and half years of operations, representing a 40 percent market share, despite fierce competition from incumbent firm Saudi Telecom.

Although an engineer by trade, Al Kaf appears to be just as much a businessman at heart. Mobily had 11 million subscribers after its first two and half years of operations, representing a 40 percent market share; despite fierce competition from incumbent Saudi Telecom (STC), which has the region’s biggest infrastructure and market capitalisation.

The company turned a profit after less than two years.

After three years of managing Mobily, Al Kaf announced the $400m acquisition of data service provider Bayanat Al Oula and internet service provider Zajil for $22m as he moved to transform Mobily from a mobile operator to an integrated telecom company. The acquisition is expected to strengthen the firm’s position in the wireless broadband segment.

And it was in the internet arena, particularly mobile broadband, that Mobily surprised analysts on the upside in the first quarter.

“We believe that Mobily will maintain its position as a leader in the broadband segment in Saudi Arabia through the introduction of new and innovative products,” Global Investment House said in a research note.

During this year’s Gitex expo in Riyadh, Mobily made the surprise announcement that it will be the first operator in Saudi Arabia to introduce fourth generation services, or 4G, by early next year.

Of course, not all the growth has been down to product innovation and clever marketing strategies; Saudi Arabia’s young population, relatively low internet penetration rates and culture makes it a good fit for any internet service provider.

More than half the population is less than 25-years-old, and approximately one third is less than 15-years-old.

“The country has five million students, and has relatively limited entertainment venues,” Shuaa Capital noted in an April research note.

Al Kaf believes mobile broadband will do for broadband what GSM phones did for telephony in the nineties. Mobily currently has an 85 percent market share in the sector.

“It’s a trend happening just like when GSM started out. There was exponential growth in GSM in the early nineties. Today we feel that mobile broadband is making that noise. It is very natural, it is bringing mobility to you, accessibility everywhere,” he says.

This seems to put him at odds with parent company Etisalat, which has stated that its mobile broadband service should only be seen as a compliment to its fixed line packages, a position reflected by its steep fines for anyone exceeding their download limit.

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