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A decade on, Axiom continues to look for new opportunities in which to lead and grow its business.
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By Administrator
Tue 03 Jul 2007 10:08 AM

Axiom Telecom's signing of an exclusive supply and distribution agreement with mobile satellite services provider Inmarsat in Dubai last month offers a glimpse of the company's broadening areas of interest.

"We are always looking to grow the business," comments Faisal Al Bannai, founder and CEO of Axiom Telecom. "We are constantly looking for new opportunities and new businesses to introduce into the region," he adds.

Inmarsat's Samer Halawi is full of praises and filled with confidence in the ability of Axiom to act as a global distributor of forthcoming Inmarsat handheld satellite phones, and this is emphasised by the exclusive nature of the agreement. "The agreement is a milestone for Inmarsat as it represents the first exclusive collaboration of its kind for Inmarsat on a global level and with a Middle East based company," Samer Halawi says.

"The global nature of this agreement is not daunting to us," asserts Al Bannai. "The only place we do not ship to is the moon, but I am sure we will when the demand exists," he quips.

Business has indeed been brisk for Axiom Telecom, with the company's revenues now exceeding US$1 billion annually. The core business itself is constantly evolving and changing as time goes on, requiring new skill sets to be adopted and introduced. Where internal expertise is unavailable, Faisal and Axiom turns to the support offered by entering value adding strategic partnerships.

"We are forming strategic alliances and creating more relationships," explains Al Bannai. "For example, we recently announced a deal with Skywards [the Emirates and Sri Lankan airlines loyalty programme provider] and are always looking to add extra value to customers," he adds.

The deal with Skywards is bold in its nature, looking to appeal across two separate industries that share an overlapping customer profile. Through the partnership, which commenced in June, a series of promotions are being rolled out at Axiom stores across the region. The first promotion allows customers the chance to earn 120,000; 80,000; or 40,000 Skywards Miles upon the purchase of selected Sony Ericsson handsets from Axiom stores, earning them an immediate free flight.

‘The maintenance of customer loyalty is of utmost importance. My role now is in finding more interesting deals to bring to the region," Al Faisal comments.

At the beginning of the year South Korean electronics company LG Electronics appointed Axiom Telecom as a key distribution partner for its mobile phones in the Middle East and other strategic markets.

Under the terms of the agreement, Axiom will distribute LG Electronics' wide range of mobile handsets and accessories in the Middle East and provide after-sales services.

LG Electronics sold mobile handsets worth US$185 million in Middle East and Africa in 2005 and is aiming for ambitious sales growth for its improved range in 2007. The company plans to double global sales volumes, profit and shareholder benefits by 2010 and its Blue Ocean strategy focuses on products offering the maximum growth potential, market share and profit generation. Blue Ocean products will generate around 30% of sales and 50% of profits by 2010.

Thus the faith being shown by major international companies such as Inmarsat and LG that partnerships with Axiom Telecom will help boost their businesses is a strong vote of confidence in the company. Other such agreements are set to be established over time.
Another area of interest for Al Bannai such interesting deal is in the mobile virtual network operator space (MVNO), where as early as the beginning of last year Al Bannai spoke of his interest in developing an MVNO business case for Axiom Telecom as he sought to move the company higher up the value chain. In his opinion, the development of such business is an obvious progression of the mobile retail operation and he had hoped to have been involved in an commercial MVNO before the end of this year.

It seems likely Al Bannai will be beaten to the post as the region's first MVNO by Friendi Mobile, the Dubai-based start-up that is looking to launch a pan-regional MVNO starting before the end of the year. Axiom Telecom remains interested in the concept though, and is likely to watch Friendi Mobile's progress with interest.

"It is our focus to be an early MVNO to the market, but we want to be a successful MVNO," Al Bannai explains. "Trying to launch an MVNO without some sort of base is a problem. It is essential that a recognisable brand is in place, that a channel to market has been established, that the provider is ready structurally, and that there is differentiated service availability."

Axiom Telecom believes the MVNO business is set to take off in the region in the coming 12 months, and Al Bannai points to Bahrain and Jordan as markets that continue to build on the services-based competition model.

Expansion into new geographies is another priority for Axiom Telecom, having entered the Egyptian telecoms market in June with the launch of retail outlets, distribution and service centres across Cairo and Alexandria. Al Bannai reveals that entering the Iranian market is set to follow next, and India is also on the agenda in due course.

Al Bannai admits that the company is also changing internally. In December 2005 Tecom Investments, a part of Dubai Holding, acquired a 40% stake in Axiom as part of Tecom's strategic objective to tap into high-growth sectors and to create synergies for future technology projects.

"Having a strategic investor such as the government of Dubai adds another layer of responsibility because one is no longer just managing oneself," Al Bannai states.

"However, such a strategic investor also gives us a strong standing for growth and places us in a stronger position," he adds.

That strength is sure to be translated into a stellar stock market debut when the time comes and Al Bannai openly confirms that a stock market listing is on the horizon, but prefers not to be pinned down as to the exact timetable. It may still be a couple of years off.

In the meantime, Axiom is looking to continue growing its global stature and Al Bannai believes the company's ability to sign contracts with global responsibilities shows how far the company has come in its maturity. "For a company from the Middle East to be signing a lot of global deals shows how companies in this region have matured and are being taken seriously," Al Bannai comments.

Global handset sales figures

Handset sales in the Middle East and Africa rose to 43.9 million units, representing a 6% annual rise, on the back of strong demand from countries such as Saudi Arabia.

Global mobile handset sales reached 257.4 million units in 1Q07, representing a 14% annual increase according to results published by business analyst firm Gartner.

Nokia led the market in 1Q07, registering 92 million sales, compared to 76 million for the year-ago period, equating to a 35.7% market share.

Motorola maintained its position at the head of the chasing pack with a sales total of 47.8 million for the quarter, up from 46 million for the year earlier period, giving it an 18.5% market share.

Samsung accounted for 12.5% of global handset sales during the quarter, running at third position with sales of 32 million handsets, compared to 28 million in 1Q06.

Sony Ericsson continued to hold its lead over LG in fourth position after displacing the South Korean vendor in late 2006. The joint venture vendor registered an impressive year with its sales of 22 million handsets in 1Q07, up from 13 million in 1Q06, helping it to register an 8.4% market share.

LG's mobile handset division registered sales of 16 million during 1Q07, up from 15 million during the year-ago period, with the vendor's sales performance giving it a 6.2% global market share.

Sales in the Middle East, Africa and Eastern Europe reached 43.9 million units during the surveyed period representing a 6% annual increase The report noted that strong sales in Turkey, Saudi Arabia, South Africa and Egypt contributed significantly to the trend.

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