Ammar Aker, CEO, Paltel Group. Ammar Aker, CEO, Paltel Group.

CommsMEA: What have been the major achievements at your operation in the past 12 months?

Our results for 2012 reflect stable performance across operating indicators and growth in earnings before tax (EBT) despite the current economic downturn in Palestine. We reached $149 million in 2012 compared with $142.5 million reflecting a growth in EBT of 4.6% which reflects a steady growth in operational indicators from last year.

We are proud of the group’s 2012 qualitative achievements, where our results continue to motivate us to invest more efforts in IT and the telecom sector in Palestine.

Paltel Group succeeded in growing the number of all subscribers by 6.4%, reaching 3.16 million in 2012 compared to 2.97 million subscribers in 2011. This reflects an increase of growth in the other operational KPIs in all services.

In 2012, our upgrade regarding Palestine’s status at the UN, to a non-member state, has created an urgency for more digital exposure where Paltel Group has responded by continuing to develop the IT infrastructure and by launching creative initiatives for Palestinian youth, for example Mobile Applications Development Initiative (MADI) in 2012.

CommsMEA: What have been the major challenges that you have faced, specific to your particular market in the past year?
The overall slowdown in economic activities in the region and the current deepening economic crisis the government is currently facing in Palestine has been the major challenge.

Current challenges in the political and economic scene have also increased the pressure on Paltel Group, as have fluctuations in currency exchange rates.

Furthermore, an increase in tax tariffs has had a direct impact on Paltel Group: The tax has been raised from 7.5% in 2011 to 20% in 2012 as per a new tax law that was implemented at the beginning of 2012 to raise the income tax from 15% to 20%.

Increases in infrastructure development costs have also presented a challenge, as has increases in fuel that we use for generators to power our cell sites in Gaza, where power supply is unreliable. Indeed, there is a continual shortage of electricity and fuel in the Gaza Strip.

Our challenges are further aggravated by additional Israeli obstacles towards the Group’s efforts to obtain 3G and 4G frequencies-creating a negative impact on the offering of our services. We continue to face illegal competition from four Israeli operators providing services to our customers in the West Bank.

On top of this we also face occupation restrictions including delays in entry of equipment between the West Bank and Gaza.

CommsMEA: How is your operation coping with the more general threats facing operators, such as:

1. Declining ARPU - We are actively increasing our offerings in VAS and also focusing on customer loyalty and retention.

2. Competition from OTTs - To cope with competition from over-the-top players we are launching our own solutions and building the experience customers are seeking. For example, our Jawwal product department is working on developing a new chatting application for smartphone users with the Jawwal brand offered with data bundles. We are also partnering, via a revenue sharing model, with local OTT application developers. We do not believe in blocking any services that our customers want. Our strategy is not to deprive our customer base from these OTT services. Currently, we are trying to compensate the revenue drop by launching new services, and bundling VAS and data for eligible subscribers.

3. Increased competition - Competition has increased hugely, particularly since the launch of Wataniya Palestine as the second operator. To address this we have launched new acquisition campaigns and new products and services that target existing and prospective customers. We have also been focusing on quality of service, ensuring that our prices are competitive and by working to ensure we are providing reliable services and the type of VAS that the customers demand.

We have launched loyalty programs, we are investing in technology upgrades, and we are also starting to see some improvement in our ability to expand into Area C and other underserviced population centres in Palestine.

CommsMEA: What major investments and operational improvements do you have planned for 2013?

With more than 82% market share and more than 78% penetration rate, we are still confident of capturing future growth in the telecom market in the Palestinian Territories, especially once our rights in 3G frequencies are granted. Also, we are focusing on the following in 2013.

• Establishing Centralised Network Operation Centre (NOC) and establishing the Security Operation Centre (SOC)
• Making huge investments in the existing network to move forward with IP, and plans to double the speed in ADSL
• Expansion of the networks to cope with the growing subscriber base and improve quality
• To invest more in services to satisfy customer needs
• To invest in 3G if Jawwal is granted the frequency by the GOI.
• Investment in the Billing Support System (BSS): Billing and CRM

Leadership

CommsMEA: How do you define the role of CEO?

I would say that being a CEO is really about defining and creating an authentic culture. For example, the way I act and the words I use will impact my ability to recruit the best and brightest and create an amazing work environment, and will also determine how my senior team acts. The CEO must set the tone for how the company functions; for example in the way the senior management treats feedback and failures, risk taking and rewards, for example.

I also view the following as key being among my responsibilities: setting strategy and working with senior management to help develop strategy; setting the standards for values, work ethics; valuing my team and employees and team building among them. But being CEO also damands the ability to have a vision, which means always thinking, meeting, learning and creating an impact to realise that vision. And of course, this also means ensuring the team is steering the company in the right direction. In Palestine, it is also necessary to be creative in terms of finding solutions to challenges related to Israel’s Occupation obstacles.

CommsMEA: What would you say have been your main actions as CEO of the operation?

My main actions have been to steer the company in a more focused direction placing emphasis on our core business of telecoms. With this focus the team has been providing growth in revenues and operational profit regardless of the saturation level in the Palestinian market.

I have to manage to lead the company in a very challenging political environment, with the Israeli occupation, the two government split in the West Bank and Gaza and an underdeveloped legal environment.

CommsMEA: What is your main aim for Paltel?

My main aims are clear: to grow my company with revenue streams that would provide sustainable growth, and to be a regional player in data one way or the other.