Ian Gray, CEO, Vodafone Qatar, tells CommsMEA how the telco plans to expand its core mobile strength through a fully operational IoT platform to tap new revenue opportunities in the digital era.
Vodafone Qatar has faced an uphill struggle in Qatar since its launch in 2009 as the sole competitor to incumbent operator Ooredoo. But as the operator moves closer towards turning its first profit after tax, it is also clearly gaining in confidence. Indeed, the telco is making its mark in the region with a series of audacious technology deployments aimed at tapping next generation services in fields as diverse as fleet management, asset tracking and video surveillance. In the most recent development, Vodafone Qatar has started the New Year by launching a strategic partnership with Qatar Mobility Innovations Centre (QMIC) to use the power of its IoT platform to provide advanced fleet management service.
Moreover, keeping the World Cup 2020 in spotlight, the telco has signed a MoU to accelerate the transfer of knowledge, expertise and technological know-how from Turkey’s first smart-stadium, the Vodafone Arena in Istanbul to one of the world’s fastest growing football markets in Qatar. Riding high on the back of its scalable IoT platform, high-performing mobile network, and artificial intelligence backed digital customer engagement strategy, the telco is all set to move away from low margin business, and expand its core mobile strength in the year ahead.
The cash position of the business has improved resulting in a turnaround of the highest distributable profit in the past 2 years. EBITDA margin improved during the quarter Q3’Fy17 to 31.2% up from 27.4% in the last quarter, resulting in a 28% increase year on year and a 23% increase quarter on quarter. “I think the biggest achievement in 2016 is how the performance of the business provided clear validation that the strategy we are pursuing is the right one,” says Ian Gray, the chief executive officer at Vodafone Qatar. When asked about the factors leading to the telco’s positive growth, Gray says: “This was achieved by a clear focus on the move away from low margin business, building on our international reputation for quality, particularly in terms of delivering a reliable network, expansion of core mobile strength through delivery of innovative services like the IoT platform, My Vodafone App, and Bill Manager; and progress made in fixed line activities.”
The telco has been a trendsetter with regards to IoT and M2M services in the region. In March 2016, Vodafone launched its global M2M platform and IoT solutions in Qatar. Gray tells CommsMEA that the response since then has been very strong. “We have had many expressions of interest from prospective customers looking to invest and develop their IoT capabilities.”
The transportation sector is a priority area for the country as it attempts to deal with its growing traffic problems. Considering this, Vodafone Qatar is in ongoing dialogue with relevant authorities as to how its IoT solutions can support the development of Qatar’s emerging smart cities.
The recently announced fleet management service is a telematics service designed to track and perform logistics management for companies aiming to enhance productivity and tackle road safety issues. The aim is to address the city’s need for intelligent transportation; and deliver faster response times, reduce fuel costs and increase revenues. Moreover, there are systems in place to monitor driver behaviour to encourage safer and more efficient driving and reduce insurance premiums. Apart from that, businesses across diverse verticals like transportation, logistics, healthcare and manufacturing have shown interest to utilise IoT applications for enhanced agility and improved efficiencies. “Enterprises in Qatar now have access to the latest IoT platform and solutions for fleet management and asset tracking with many other applications to follow this year and beyond. Only Vodafone can provide a global M2M SIM card, enabling IoT adopters to achieve business optimisation and cost savings,” says Gray.
So, what kind of revenue potential does Vodafone Qatar see in IoT? Quoting observations from Vodafone IoT Barometer, Gray says that the market for connected devices has truly come of age. “28% of organisations globally are already using IoT and a further 35% say they are less than a year away from doing so. What matters now is not whether a business should adopt IoT, but how.” He further adds that with a global M2M platform, access to global SIM cards, dedicated IoT experts, M2M terminals, and application and service enablement, Vodafone Qatar is well-positioned to capture the revenues that IoT brings along. “Looking specifically at the top industries recognising the value of IoT, 86% of businesses in the industrial sector say they’ve seen ‘significant’ return from implementing IoT. It is exactly this sort of benefit that explains why customers are interested in talking to us about how IoT can positively impact their operations,” says Gray.
He further adds that Vodafone Qatar is the ideal partner to work with organisations like the Supreme Committee for Delivery & Legacy, to help them realise the potential of the smart stadium concept by delivering IoT solutions to enhance fan experiences and improve operations. Gray says: “We’re looking to support the authorities and large number of stakeholders involved in delivering an amazing World Cup by making the lessons learned from our more than 20 years of IoT experience based on deploying such solutions for a range of sporting events. That could include our experience with the Besiktas Vodafone Arena in Istanbul, one of the world’s smartest football stadiums, or our experience in London during the Olympics or Spain during La Liga matches.”
So, how does Vodafone Qatar plan to achieve effective business transformation and earnings from implementing a fully operational IoT system? Gray says the strategy is to develop the IoT platform as the connectivity solution that enables a wide range of businesses in Qatar to take advantage of the IoT market opportunity. “This combines a scalable global IoT platform with interactive portal for end users; global SIM cards powered by the world’s largest network; highly secure solutions; more than 1,300 IoT experts; a broad portfolio of IoT terminals, application and service enablement development and testing and deployment – all from a single supplier, with a single contract. Enterprises in Qatar now have access to the latest IoT platform and solutions for fleet management and asset tracking, and we will be making many other applications and services available soon.”
In terms of network upgrades, the telco has invested around QAR 1 billion over the past 24 months to improve network coverage and performance. Here, one wonders how the telco plans to maintain good profit margins in spite of these huge investments, which don’t necessarily translate to quick ROI. To answer this, Gray says: “We need to be clear that the mobile industry is not one in which you can make investments and expect immediate returns. What we are talking about here is major infrastructure development on which modern economies and nations depend for economic progress and success, as well as the delivery of public services. As one of the world’s leading telecommunications companies and owner of the world’s largest private network, we’re ideally placed for this.”
He further goes on to explain how increased network capacity produces a significantly better customer experience on both voice and data services, enabling the operator to retain existing customers and attract new ones. Vodafone’s network was recognised as the best performing in Qatar for mobile voice and data in an independent network test by P3 communications in 2016. In the meanwhile, the telco is already working towards preparing for 5G technology.
The company has been majorly into mobile operations; so are there plans to exert more focus on fixed-line? Gray says that mobile is and will continue to be the major strength of the telco. He adds that fixed-line activities already account for 29% of sales, and the operator will further invest in fixed-line activities. The prime targets are going to major new real estate developments such as Msheireb Downtown, Lusail City and the Pearl-Qatar, and infrastructure projects such as the new seaport and Hamad International Airport.
In sync with its drive to implement innovative technologies, Vodafone Qatar has also successfully launched Hani, a digital customer engagement strategy using AI coupled with live agent chat. Hani is built on an intelligent platform and comes in the form of a smart Vodafone Hedgehog. The system makes use of natural language processing (NLP) to understand a consumer’s intent, and map that person’s question to the correct answer, regardless of how the question is phrased. Gray tells CommsMEA that, to date, Hani has answered 80,000+ questions per month with an accuracy rate of more than 90%.
Despite competition and high SIM penetration rates, Qatar’s market prospects remain strong thanks largely to increasing demand for data services. Going forward, the strategic focus of Vodafone Qatar is to continue the momentum achieved in 2016 and build on improving financial performance and success. Gray elaborates this will be done by improvement in network quality, customer service and expansion of innovative services. The telco sees good opportunities to further develop relationships with existing customers who own multiple SIMs, as well as win new customers. “We’re also confident in the potential offered by the development of consumer and enterprise fixed-line services, as well as VAS including content partnerships”, says Gray. The roll-out of IoT services over its network is an important part of Vodafone Qatar’s strategic direction to bring innovative technologies to Qatar and in turn help realise the Qatar National Vision 2030. He adds that Vodafone Qatar looks forward to continuing to work with the CRA to further develop and evolve the existing wholesale access regime by implementing a more comprehensive suite of regulated wholesale products (both passive and active). It supports the CRA in taking a more active role in application of the existing regulatory framework, in order to provide for a more level playing field as a platform for realising the benefits of sustainable and effective competition and encouraging further investment.