TBY talks to Osman Sultan, CEO of Emirates Integrated Telecommunications Company PJSC-du, on the brand, revolutionizing the telecoms sector, and innovation in the UAE.
THE BUSINESS YEAR What was the vision behind the creation of du, and what were the challenges to entering the market?
OSMAN SULTAN The creation of du was the first step in opening up the telecommunications sector in the UAE to competition. It was the first time in UAE telecom history that the market was opened up to secondary players after 100% penetration had been attained in the mobile segment. That, in itself, was a great challenge. Another challenge we faced was that it was the first time that a telecoms start-up was offering the full range of telecoms services right away. Usually, start-ups begin with only mobile voice services and then move on to offer fixed broadband services and so on. From the very beginning, we had a mandate to offer services in mobile, fixed telecoms, fixed broadband, home TV services, IP TV services, and broadcasting. That was a very exciting challenge. The third challenge, and probably the most important, was that this is the first telecom start-up in the Arab world that was created without support from an existing and established operator.
What have been the most instrumental factors in the exponential growth the company has witnessed in its short five-year history?
We should be very proud of what we have achieved in just five years of launching our services. Today, we are a company that has a significant market share in the mobile sector in the UAE—over 46% in the most penetrated market in the world for mobile services is remarkable by any standards. We are now getting close to having 6 million active mobile customers. We have managed to reach close to AED9 billion in revenues in 2011. We have very good profit margins, as evidenced by our ability, in such a short period, to distribute our first dividend to our shareholders just five years after launching the service. We are very proud of these results, of our position in the market, the value created for our shareholders, and the pool of talented people that we have. We worked hard to get this talent onboard and create a strong corporate culture, and today I believe that we have one of the strongest brands within the Arab world. We have excellent infrastructure. Our mobile broadband network has recently been ranked the best in all of Africa and the Middle East. We also have solid foundations in our governance. We are so very passionate about the brand, which is not just about having a nice logo or campaigns; the brand is about everything that this company lives and breathes interfacing with its customers, employees, and shareholders.
What trends have you seen in the growth of mobile data in the UAE, and what percentage of total revenue does mobile data comprise at the moment?
Today, data revenues represent about 15% of our revenues. I expect that in the coming five years it will exceed 30% or 40%. Less than 20 years ago mobile telecommunications empowered the concept of mobility that transformed completely almost everything we do. Mobile data and broadband capabilities added a completely new dimension. It came with incredible power; the power of the internet, the power of new freedom, of enjoyment, of efficiency, and of prosperity, especially in emerging economies. Now, we are contemplating the moment when, in just a few years, the number of mobile devices will be higher than the number of human beings on this planet. The internet itself was a breakthrough, and later gave birth to social networking. I strongly believe that being connected is a basic human right. It is an idea that I am passionate about.
Broadband internet in the UAE is still working on becoming more competitive in terms of speed and cost. How do you see this evolving?
In terms of speed, I think that broadband internet in the UAE is already very competitive. The UAE will probably be one of the first countries in the world to have fibre-optic cables running into all homes and offices. In terms of cost, things have evolved a lot, especially in the residential market over the last three years, driven by competition. However, fixed broadband for businesses probably needs to see some more attention. It is becoming more competitive, though. All over the world, telecoms operators are looking at how to price it properly. I think that enterprise customers are willing to pay for a premium service. Capacity is going to become more vital. This is why we are going to spend billions investing in the right infrastructure.
Looking at the UAE as a hub for potential innovation in the IT market, how is du leading the way?
The idea of the UAE as a hub is a very important one. Things evolve, and depending on the pace of change, you feel the progress of evolution. The UAE first became a hub for goods and merchandise in this part of the world, helped along by the right infrastructure. It then began to transform into a hub for people through the creation of the right enablers: themed free zones, tourism, airport infrastructure, airlines such as Emirates, Etihad, Air Arabia, and Fly Dubai more recently. These developments are responsible for turning the UAE into a hub for capital inflow and investments. I am convinced that the next phase will see UAE becoming a hub for the digital space. It is a natural step. This part of the world generally missed the industrial revolution of the previous two centuries. We did not create the infrastructure for big factories that could drive innovation—we were buying and using. I believe that the digital age is a great opportunity. It does not require all the infrastructure of factories and R&D centres. Dubai, over the last 15 years, has been through a brainstorming process and put all the right aspects in place to attract investment flows. In the digital age, we have the opportunity to cement the UAE’s place on the map. Awareness at the level of decision makers, policy makers, regulators, industrial leaders, and the community to incubate entrepreneurship could create the right ecosystem to continue attracting these flows in this digital space.
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© The Business Year - July 2012