Lebara is active all over Europe, but this is its first venture into the Middle East. What were the main attractions of the Saudi Arabian market for Lebara?
Saudi Arabia and the other Gulf states have significant communities of expatriates—in Saudi Arabia approximately one-third of the local population are expatriates coming from all regions of the world. As the universal brand for the global migrant community, Lebara focuses on providing high-quality, low-cost, international calling and mobile internet to connect people with friends and family back home. This has been Lebara's approach across Europe and it similarly applies here in Saudi Arabia. Our primary target is the Saudi expatriate community, who make up about 10 million of the population. Our offering also appeals to lower-income Saudis, and I believe that this strategy provides us with a major opportunity, because this group is currently under-served by the existing MNOs, which tend to focus on high-income earners. I believe there is great potential in Saudi Arabia and it is the best place in the region for Lebara to start.
Lebara officially launched at the end of 2014. How would you rate the success of this launch so far?
We have made an excellent start and exceeded all expectations. Although we experienced some delays before launching—due to various regulatory reasons—things have gone really well since the launch. We are currently unable to offer some services, but we should be fully operational in the next six months, and able to compete with other operators in terms of voice, data, international roaming, and so forth.
What are some of the lessons that Lebara can learn in the Kingdom to prepare for expansion to the rest of the GCC?
I am confident that Lebara will succeed in the Kingdom of Saudi Arabia, just as it has in Europe and elsewhere. I believe the two main challenges for the region, however, are that there's a new experience among our regulators regarding MVNOs, the MVNO's relationship with the MNOs, and how everyone deals with each other. As a global MVNO brand and one of only two MVNOs in KSA, it's Lebara's duty to help educate the regulator on the MVNO's business model, sometimes regulations can create a major obstacle and it is our role to demonstrate the value we add to the market and feedback on regulation that works well to develop the MVNO model and allows us to innovate in the market. Secondly, the agreement with the MNO here is different—it's not like any agreement in Europe—so you need to have detailed negotiations with the MNO beforehand to ensure you end up with the right contract terms. Again, this is where Lebara brings its expertise and has a vital role to play in negotiating with the MNO and making them understand the benefits of helping their MVNO partner grow.
What major trends are you noticing in the sector?
Like elsewhere in the world, we see tremendous growth in data. This is something that we have to prepare for and our MNO needs to be ready for, because expansion in data requires major investment on the part of MNOs. We have to ensure this investment takes place so that we are all prepared and can meet the needs of our consumers who want to consume more content on their devices.
What are your expectations for 2015?
Our priority is to build brand awareness so that Lebara enjoys the same trusted brand status it does elsewhere—people may not be familiar with Lebara yet, particularly those who do not travel to Europe, which is almost 99% of our segment. We need people to really feel that Lebara has a different approach and a deep understanding of their needs. With growing awareness, we can expand our subscriber numbers, improve our wholesale agreement terms with our MNO, and add more services to create an even stronger consumer offering.