Etisalat UAE: Eye on the prize

Saleh Al Abdooli, Etisalat UAE’s CEO sees no shortage of opportunity in data services
Saleh Al Abdooli, Etisalat UAE’s CEO.
Saleh Al Abdooli, Etisalat UAE’s CEO.

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When Saleh Al Abdooli started work as CEO of Etisalat UAE back in April 2012 he had some tough challenges to face up to. While the UAE operation represented by far the biggest slice of the telecom group’s revenues and profits, it was also losing market share to its sole competitor, du, which launched services in 2007.

However, having served as CEO of Etisalat Misr, the group’s mobile unit in Egypt, Al Abdooli also knew a thing or two about operating in a fiercely competitive environment. Indeed, he led Etisalat Misr from its start-up phase to become a strong competitor to its established rivals Vodafone Egypt and Mobinil, and this experience helped the CEO boost the fortunes of Etisalat’s UAE operation.

In the first half of this year alone, Etisalat UAE’s revenues reached AED15.1 billion ($4.1bn), a rise of 8.6% over the previous year. Similarly, the UAE telco’s revenues for the full year 2014 rose almost 9% year-on-year compared to 2013 to reach AED28.2 billion.

The UAE was already one of the world’s most heavily penetrated mobile markets when Al Abdooli joined the operation. The country was also well served in terms of the latest mobile and fixed-line infrastructure compared to regional and international peers. For this reason, Al Abdooli viewed customer segmentation —offering the right packages and bundles —as a key priority. This is particularly important in an age when data services dominate, and Al Abdooli has no doubts about the growing importance of data — and particularly mobile broadband.

“Our lives are becoming highly digitised and so is our interaction with people and now machines too. There are higher number of smartphones, video-capable and connected devices in the market today, which is driving data-consumption,” Al Abdooli says.

Tapping this demand also involves major investment in infrastructure, and this is also a factor that Al Abdooli and his team are prepared for. “These developments demand increased bandwidth and advanced technologies to support the massive data traffic volume. With our investments in technologies such as FTTH and LTE, we are ready to make data and content more accessible to everyone and drive the digital adoption in the UAE,” he says.

In the consumer market, Etisalat has also been investing in customer services, an area that many incumbent operators have traditionally been criticised for. Moreover, in a market with mobile penetration of more than 190% — according to figures from the TRA —customer service is critical for retaining and gaining customers, particularly higher spending users. Al Abdooli says that Etisalat has made efforts to strengthen the quality of its customer service to provide a “more efficient and engaged” experience across all of its brand touch points including stores, customer care service (telephone) and digital channels such as the social media platforms and the Etisalat UAE mobile app.

“Etisalat’s customer care centre responded to a massive 67 million calls in 2014. In a vast improvement over the third quarter in 2014, 80% of complaints were resolved in real time during a call by end of third quarter this year. Through the social networking platforms, we resolved over 70% of technical inquiries and complaints in less than 24 hours,” Al Abdooli says.

The telco has also made efforts to sharpen its image on the high street with the roll out of 60 “smart stores” — retail outlets that allow customers to check out services such as e-life first hand — across the UAE.

In a bid to bring its presence closer to customers, Etisalat launched a fleet of ‘shops on wheels’ that move to various locations each week. “We have gone a step further and initiated a mobile customer care solution: the Etisalat Smart Mobi-Shop,” Al Abdooli says.

He points out that the Smart Mobi-Shops give customers access to various services, products and promotions, such as mobile services and eLife. Customers can also renew their subscriptions at the Smart Mobi-Shops, which will be stationed at different locations across the city.

For customers who prefer to operate online, the telco has made efforts to strengthen its web-based customer services by introducing a mobile app that allows customers to pay bills and make requests or queries to customer service representatives online. This app has already recorded over a million downloads and a 70% increase in payment transactions during first half of 2015, while a new customer outreach ‘Live Chat’ feature on the app has recorded more than 50,000 conversations with customer care agents, according to Al Abdooli.

But while improvements to customer services have been key to strengthening Etisalat UAE’s bottom-line, so has the ability to meet surging demand for broadband services through fixed and mobile infrastructure. As with all operators, Etisalat faces surging demand for fixed and mobile broadband services, and as an engineer, Al Abdooli is acutely aware of the need to invest for the future.

“What is also fuelling an ever-rising appetite for data and speed, is the consumer demand for video over the Internet and mobile devices, mobile social networks, cloud computing and mobile payments. As recent reports point out, regional data traffic is expected to grow 14 times between 2014 and 2020,” he says.

In order to answer to this demand, Al Abdooli believes that an increased bandwidth and advanced technologies to support the massive data traffic volume are required. “With our investments in technologies such as FTTH and LTE, we are ready to make data and content more accessible to everyone and drive the digital adoption in the UAE,” he added.

Apart from the company’s investment in fixed and mobile, Al Abdooli said that Etisalat will continue to invest in enhancement of mobile and fibre infrastructure. “In addition to network modernisation, expansions and new technologies. We are committed to invest in future technologies that will speed up creating new quality products and services for our customers, who will also be able to get them more easily and in shorter times.”

The company is also investing in 5G, an initiative that was announced during Mobile World Congress. Etisalat will conduct trials during the next five years with different vendors. “Etisalat has a pioneering position as the region’s first to develop the next-gen network for its customers. We are working in close partnership with technology leaders to enable a safer, more efficient, and more enriched mobile experience for our users through the 5G network,” Al Abdooli says.

“Our estimate for completion of international standardisation is by end of 2017, while commercial networks are aimed to be deployed in 2020. We are working together with our partners to conduct live trails on our 5G networks over the next five years,” he added.

Riad Hartanni, partner at Xona Partners, thinks that 5G will come in steps, just like it is being planned in various other countries such as Japan, Korea and the US. “Deployments are likely to be incremental and done to serve specific services deployment needs. Some of the components of 5G such as multi-carrier aggregation as an example are likely to be deployed in the 2017 and 2018 timeframe, with most components of 5G likely to get deployed in the 2020 and beyond timeframe,” he added.

Mathew Reed, practice leader at Ovum MEA, said that the first commercial deployments of 5G worldwide will not come until 2020 or later and in the UAE in particular, Ovum does not expect 5G to be introduced until after 2020.
Setting the view in the future, Al Abdooli thinks that the Internet of Things is already bringing great opportunities to the sector in the region. “The physical and online worlds are merging and Internet of Things is making it happen. Cited as the next mega-trend, IoT is connecting to the Internet billions of everyday devices —ranging from smart light bulbs to industrial equipment.”

He believes that there are huge possibilities in several sectors, particularly healthcare, retail, banking and automotive. “The new wave of IoT and mobile services such as M2M applications presents an attractive opportunity for B2B services.”

Al Abdooli also thinks that the effect that Big Data has across industries means that telcos are poised for a major change as companies begin to leverage analytics for improved targeting and increased profitability. “Ultimately, the value of the data produced from connected devices will be the driving force behind IoT,” he says.

“Keeping with these trends, we will see a great opportunity to create value by leveraging our network assets and large customer bases. Success here will require excellence in partnering capabilities. Expansion in machine-to-machine (M2M) capabilities is an important area and one that Etisalat has a strong presence in. Furthermore, Etisalat has formed strategic partnerships on sustainable development applications to support businesses and government entities in the UAE,” he adds.

Etisalat allows foreign ownership

Etisalat UAE partly lifted the restrictions on who could own its shares, opening the stock to foreign and institutional ownership for the first time, last month.

Local and foreign institutions and expatriate individuals were able to hold up to 20% of the company.

The operator did not share the reasons behind the decision, taken by the federal government, or when the change will take place.

The Emirates Investment Authority (EIA), a UAE government fund that owns 60% of the business, had no intention of reducing its Etisalat stake for the time being.

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