Font Size

- Aa +

Tue 5 Feb 2008 04:00 AM

Font Size

- Aa +

Architects of expansion

After signing a landmark contract with Zain to roll out a mobile network in Saudi Arabia, Nokia Siemens Networks outlines its blueprint for expansion in the MENA region and beyond.

After signing a landmark contract with Zain to roll out a mobile network in Saudi Arabia, Nokia Siemens Networks outlines its blueprint for expansion in the MENA region and beyond.

While telecom professionals are accustomed to hearing news of ambitious expansion plans from the leading telcos, less is heard about the network infrastructure providers that make these plans a reality.

I expect that it will be very strong competition in the Saudi market. But the market is still growing quite a lot – a lot of people have two numbers and the usage is very high.

But as chairman of Nokia Siemens Networks (NSN) in the Middle East and Africa, Walid Moneimne is just one of a new breed of ICT specialists who is keen to put telecom infrastructure players back in the limelight.

And Moneimne has much to talk about, with NSN - a joint venture that was established by Nokia and Siemens in 2006 - having recently signed a US$935 million contract with Kuwaiti telco Zain, to develop and maintain its network in Saudi Arabia.

NSN, which has already worked with Zain in countries including Iraq, Kuwait, Jordan, Bahrain, Lebanon, Sudan and Nigeria, will be building the bulk of the network for Zain in KSA, including a 2G and 3G network from the start of the contract.

"We are the strategic partner and we are supplying 70% of the coverage, so 70% of the radio and 100% of the core network, which includes all the NSC servers and media gateways that are deployed in the region, giving greater flexibility in managing traffic," Moneimne says.

For Moneimne, the contract is an example of the complete service NSN is able to offer its clients since the creation of the company last year. "Greenfield operations, like this operation in Saudi Arabia, involve almost every single product and service that we have on offer," he says.

It is also a significant break into the Middle East and African market - where NSN intends to become the biggest player in its field - and which Moneimne estimates could be worth some euro10 billion (US$ 14.7 billion).

"This is an extremely important milestone for the company worldwide, as well as for the Middle East and Africa," Moneimne says. "The size of the contract is very significant. We are using almost all our product lines and services for the contract and we are working with an important group that has a strong ambition to grow regionally and internationally.

"We look at the Middle East and Africa as one of the fastest growing markets in the world and we predict the total size of the market to be about euro10 billion.

While Moneimne concedes that he lacks all of the required data, he estimates that NSN is currently the number-two player in the region.

He is also convinced that the company can take the number-one slot by focusing firmly on the needs of the end-user, and by ensuring that the best aspects of the former Nokia Networks and Siemens Communication are fully exploited in the new company.

To do that we designed all our team to be customer-focused. After the Nokia Siemens merger we were able to unify our products and services into one and we were able to unify our customer team."

Indeed, the merger of the two companies in 2006 created a formidable presence, with the combined company having a large portfolio of products and services in the mobile and fixed infrastructure sector, and a significant customer-base. "Typically we work with about 600 customers worldwide - which is most of the operators in the world," Moneimne says.

Room for growth

While NSN and Zain have high hopes for their venture in Saudi Arabia, some analysts have suggested the market will be difficult for the Kuwaiti operator to grow in, mainly because it already has a high mobile penetration rate and already has two mobile operators, Saudi Telecom and Mobily.

And while Moneimne recognises the challenge that Zain and NSN face in Saudi Arabia, he thinks there is plenty of room for a third player. "I expect that it will be very strong competition in the Saudi market.

But the market is still growing quite a lot. We expect a lot of users to carry two phones - a lot of people have two numbers and the usage is very high. Saudi also has the Haaj pilgrimage, creating an ongoing flow of visitors.
Furthermore, he sees benefits to being the third mobile entrant into a country such as Saudi Arabia compared with being the second.

"Typically the pattern of moving from one or two operators to three, four or five operators is well known. For the company that is in second position there are some significant challenges because they are entering into a monopoly type of market.

"But when you are a third operator, the market has already become used to having more than one supplier, so the market becomes differentiated and operators tend to find a lot of innovation, whether it is in the marketing, commercial or product side of what they offer," Moneimne adds.

For Moneimne, when three operators enter a market, it becomes more important for each player to differentiate, and attempt to offer the customer something different. "Customers quickly establish a type of preference based on what they need, and also there are a lot of segments of customers, so you have youths, business people, among other groups," Moneimne says.

This is particularly the case with mobile operations. "In fact when you look at segmentation, you see that within mobile users it is rich and very diversified. This means that in general, operators will always find some segments they are good at.

"The brand is very important, differentiation on how it is perceived regionally is also very important - all of these elements are part of the key decision making. Of course the third operator can't become the leading company from day one but it can quickly capture a good market share.

Much also depends on the level of innovation that a new operator brings to the market, according to Moneimne.

He points to branding, new ideas and applications, as important way for operators to differentiate themselves. "When you have several operators in a country it is not the fact that is served or not served, it is the innovation that you can bring, new ideas and applications, use of data, the type of coverage in cities is also important."

Geographical expansion

And certainly, looking ahead, Moneimne sees huge potential in the region and around the world. NSN is looking at countries including Nigeria, Egypt, Saudi Arabia, Iraq, Iran, Uzbekistan, and South Africa, as markets with the greatest potential. Moneimne views undeveloped markets such as Iraq, as well as well-established markets where new licences are available, as having particular potential.

"One thing is sure," he says. "Whenever you are in a roll-out mode the market is suddenly bigger than when you are in to normal growth. It happens in all countries where the penetration is very low, but it also happens when there is a new green field license, like in Saudi Arabia.

For Moneimne, expansion of broadband access is likely to be a key driver of operators' businesses, and therefore also NSN's business in the coming years. "It is important to see what vision we have put in place from Nokia Siemens networks," he says.

When we started we said we see that the world will be connected with five billion users by 2015 with a fast broadband connection, whether mobile or fixed.

"We also predicted that we would be seeing a multitude of business models, so the business model that we would be seeing would be the traditional operators, which would be carrying out a lot of innovation, and also new players such as Google and Yahoo.

In the Middle East and Africa, Moneimne sees mobile subscriber rates moving from 300 million in 2007 to about 600 million in 2010, driven partly by low penetration rates in many parts of the region.

"When we look at that we see that in order to reach this level, we will see an increase in traffic one hundred fold," he says.

"So there will be a huge increase of traffic which will mean a huge growth in infrastructure spend, and we are seeing that market develop," he adds.

Moneimne in profileCareer highlights:Prior to his current role, Moneimne was senior vice president of Nokia's networks division for Central & Eastern Europe, Middle East and Africa. Before joining Nokia in 2004, Moneimne was vice president of enterprise systems at Dell EMEA.

Education:Moneimne holds a PhD in Computer Science from the University of Grenoble, France, a MBA from HEC France and Wharton Business School, USA. He also completed a computer engineering degree from ENSIMAG in France.

For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.