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Mon 30 Jan 2006 04:00 AM

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Home & Away

At the same time as further details of the second telecoms provider in the UAE are coming to market, CommsMEA conducted an interview with Etisalat chairman and CEO, Mohammad Omran about the effects the changes on the domestic scene are likely to have on his business.

|~|Omran200.jpg|~|Omran believes that Etisalat's diverse range of businesses allows it to better position itself in markets.|~|It is for good reason that Cairo ICT is honouring Mohammad Omran's contribution to the telecoms sector, given his involvement in the industry for almost 30 years. As chairman and CEO of one of the oldest and most highly developed telecoms monopoly's in the Gulf, Omran's responsibility to shareholders, government and end-users is immense, and the introduction of competition for the first time in the operator's home market is likely to only raise the stakes further.

No one claims that Etisalat is a perfect organisation - not in its service offering, not in its tariff structure, not in its customer care credentials. However, for an operator that has had things all its own way for its entire life, Etisalat has made significant strategic and technological advances that are sure to prove beneficial in the operator's defence of its market position.

"I think opening the market and taking other operators to work with us is a healthy thing because I have always believed that when there is more than one player, everyone will do their best to try and achieve a target and work hard," Omran says. "I feel that in the UAE, as in other countries, (new entrants) enlarge the market and we have seen this happening in Saudi Arabia. We were in Saudi Arabia on the other side (as the new entrant) and both Mobily and STC have gained because of that."

Omran's ability to talk about experiences in both the domestic market as well as internationally without pausing for breath underlines the operator's desire to follow the same operational ethos abroad as it does at home. It is a difficult corporate culture to achieve, and given the relatively short time that Etisalat has been in active pursuit of foreign investments, international expansion was bound to have some teething problems.

While some acquisitive, and arguably more experienced operators on the international scene, opt to keep their plans and targets deliberately vague till the last moment, there was a time last year when Etisalat appeared a little over-eager in its desire to spread the message that it was an operator on the move.

In the middle of last year Obaid bin Mes'har, Etisalat International's chief executive officer at the time, spoke of the operator's evaluation of an opportunity to acquire a greenfield licence in Yemen, but the operator later chose not to partake in the award process. In Africa, having successfully negotiated a 50% stake in West African mobile operator Atlantique Telecom in April, Etisalat went on to announce that together with Atlantique, the two operators were close to securing a deal with four Central Africa telecoms operators. At the time, it had been speculated that the additional four targets consisted of Telecel Zambia, Uganda's U-Com, Telecel Burundi, and Telecel Central African Republic, which had all been sold by Egyptian operator Orascom Telecom to Gloria Trust in 2003.

There has been no further update regarding the acquisition of these four African assets, and Etisalat's reputation for paying a premium for positions in order to quell its significant foreign investment ambitions grew.

Pakistan, an investment opportunity for which Etisalat bid over 80% higher than the next highest bidder for a 26% stake in Pakistan Telecommunication Company Limited, has been tied up in lengthy negotiations to ratify the deal since the UAE operator made the US$2.6 billion pledge back in June. ||**|||~|Jamal2-Intl200.jpg|~|Jamal Al Jarwan returns to head Etisalat International after a stint as chief commercial officer of Etisalat-controlled mobile satellite services provider Thuraya.|~|"The deal was complex and there were certain milestones that needed to be met by us and by them," explains Omran, when asked for a current update on the Pakistan situation. "The first time round, we were not able to finish certain things within the timeline that was originally set. That pushed us to write to the Pakistan government and we discussed with them a way forward." Omran says that the government of Pakistan and Etisalat have now reached agreement, subject to approval by both parties, and that the issue has been discussed with the committee on privatisation headed by Pakistan's prime minister.

"Until now we have not received the official document, but if it meets the conditions we have agreed upon, it will allow us to go the next stage and finalise everything and sign it," Omran says.

The cost of the deal for the stake in PTCL appears to go beyond just the financial premium Etisalat offered to pay, and is reported to have prompted some high-level management changes at the operator. Bin Mes'har, Etisalat International's first CEO tendered his resignation in November, a development some market commentators linked to the problems being faced in Pakistan.

Thus it appears as if the adoption of Etisalat International's more pragmatic approach to foreign investments, as witnessed by its decision not to raise its offer for a 55% stake for Turk Telecom beyond the US$6.55 billion pledged by eventual winner Saudi Oger in July last year, came too late to save bin Mes'har.

Taking over the reins at the international business is Jamal Al Jarwan, who returns to Etisalat after a stint as chief commercial officer of Etisalat-controlled mobile satellite services provider Thuraya. "We have taken him (Al Jarwan) back from Thuraya and he is now the head of international operations at Etisalat. He started from the beginning of the month (January)," Omran confirmed.

Jarwan assumes his position at a crucial time for the UAE incumbent as it balances preparing for the entry of competition at home, with freeing up the resources required for future investment opportunities occurring around the region and beyond. Omran confirms Etisalat's continuing interest in acquiring a 35% stake in Tunisian state telco Tunisie Telecom, as well as the company's intention to participate in the award process of a third GSM licence in Egypt.

Omran also speaks of an opportunity Etisalat is assessing closely at the moment, the details of which he is not willing to share at this time. Press reports in the UAE have suggested Etisalat is close to securing a position in the underdeveloped market of Afghanistan, having reportedly completed two rounds of talks with the Afghan government.

The Afghan opportunity is reported to extend beyond just the offer of mobile communications, and with a population of 30 million and a low telecoms penetration rate, offers an interesting growth opportunity. Last September the Afghan government auctioned two GSM licences, bringing the overall number of licensees in the country to four. The first of the two licences awarded in September went to Dubai-listed operator Investcom operating through a consortium with UAE company Alokozay Group. The second concession was awarded to Watan Mobile Afghanistan, a consortium consisting of Al Houbi Telecom from Saudi Arabia, and US companies, Cellular One and GlobeCom Systems.

Staffing levels at Etisalat currently stand at approximately 10,000 employees, and Omran is proud of the skills that are being developed, the teamwork that is built and the corporate culture that is being instilled at all levels of staff. He believes that it is from this base that the operator will be able to combat the pressures and challenges in the near term and further into the future.

"Etisalat does not work with only one man. It works in a team. We have 10,000 staff; we have good, qualified managers and top management. So the availability of one person here or there, or their absence does not affect us much. We do have good resources within Etisalat," Omran states.||**||

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