Zain enjoys phenomenal loyalty from its 45 million customers
Group CEO, Scott Gegenheimer talks about his experience, industry trends and the future of mobile in the region during an exclusive interview with Teletimes International
Khalid Athar: Please share with us an overview of your experience at Zain. How has the company evolved and grown over the years?
Scott Gegenheimer: My three and a half years at Zain have been fulfilling in many respects. That is not to say that there haven’t been challenges. There have been plenty, but what I appreciate is the sense of urgency and can-do attitude of my colleagues, and the shared determination to succeed whatever the odds.
Zain is proudly an operator from the region, for the region, and we try to place the customer at the center of all our activities and initiatives. We believe offering the best service possible through state-of-the-art technologies and networks is one of our key differentiators, and in order to achieve this we strive to remain the region’s most innovative service provider from a technology standpoint as well as a product and service offering perspective.
Zain Group continues to operate in the midst of highly complex and dynamic environment in a number of markets, and the company’s adaptability to rapid and often drastic changes in socio-political and economic conditions is what defines it as a successful, sustainable entity.
Competition across our markets is squeezing traditional sources of revenue and margins, and thus we instituted a strategy to develop into a digital lifestyle provider, which is in a position to drive efficiencies and leverage our network to great effect. We are sometimes frustrated by externalities beyond our control such as social unrest and currency impacts across several of our key markets that hamper our progress from time-to-time, but that is the cost of doing business.
Nevertheless, we remain committed to our strategy that will take advantage of our competencies, including our people, brand, impressive customer experience, cutting edge innovations and geographic coverage.
Overall, I would say my time at Zain has been progressive, and I look forward to driving more growth in areas such as smart city developments, enterprise mobility, and M2M in order to generate incremental revenues as well as driving efficiency and investing and developing our talents to be future leaders.
KA: Which factors have played key in Zain’s success?
SG: I touched on some of them in my opening remarks. I believe Zain enjoys phenomenal loyalty from its 45 million customers, who I think clearly appreciate our endeavors to offer them the best quality network and customer experience in every market in which we operate.
We have a fantastic group of people working for us, who we refer to as Zainers, who stop at nothing to resolve issues and give customers what they want wherever they may be located. We have a tremendous distribution network and really do understand the dynamics in our markets and across the region, which has helped us maintain leadership positions across most of the markets in which we operate.
Our reputation as a service provider that really understands the region has resulted in us partnering with some of the largest digital applications players in the world, keen to have a strong strategic partner in the region with whom to grow. This then translates to our customers often-time gaining access to applications that are being offered for the first time in the region, which helps maintain loyalty levels.
Zain is the market leader in most of its markets, both in terms of value share and market share. Zain utilizes its business intelligence platforms to build a strong customer value management framework premised on well-defined customer segments in each of its markets. Data monetization is a key area for the company and numerous initiatives are underway to implement data centric pricing across our footprint.
Thus our investment in innovation, content, and customer experience works as a virtuous circle.
KA: Many operators see IP service based networks as the key to compete with OTTs? What is your opinion?
SG: What is there to ‘compete’ over? The notion that service providers are in competition with OTTs is an outdated one. OTTs have something to bring to the table, content and applications that customers want, and we have the networks and the devices to deliver such to them. The industry needs to recognize that OTTs are service providers’ partners and needs to be innovative in service offerings.
Zain is very proud of the partnerships it shares with numerous leading content players, and we are pleased with the strategic and financial benefits these partnerships generate. These include Uber, Booking.com and Cut the Rope’s developer Zeptolab to name a few.
As with all partnerships, what is necessary is for there to first be an acknowledgement of what the various parties bring to the table, followed by the creation of a mutually beneficial, cooperative business model.
KA: Some countries today are keeping a check on the type of data that is going through OTTs (Skype data etc.) Do you think such an approach towards Analytics is effective or actually an intervention into privacy of users?
SG: Let us be clear, Zain is not a proponent of blocking OTT communication channels on our networks out-of-hand because they have not been developed by us. We approach the delivery of third-party services and applications that our customers want in the spirt of cooperation and mutual benefit.
That being said, in the data-heavy mobile communications environment in which we currently exist, it is absolutely necessary to have an understanding of the type of data being transmitted over the network, together with traffic and usage patterns. This is important from a billing perspective, as well as with respect to traffic management requirements and prioritizations.
KA: Please talk about Zain’s efforts and initiatives to deal with Cyber-crime and Grey-traffic.
SG: Zain recognizes that as a mobile network operator, we are a critical national infrastructure in the countries we operate in. Consequently, fighting cybercrime is one the core priorities of Zain. Today, we are seeing highly complex cybercriminal networks bring together individuals from across the globe in real time to commit crimes on an unprecedented scale. As new trends in cybercrime are emerging all the time, we at Zain are continuously enhancing cyber capacity building. Zain treats the information of our customers, employees and partners confidentially. As awareness is a critical first step in safeguarding our information and assets, we continuously work with our employees and partners to inculcate the right culture of security in our daily operations, while enhancing our technical capabilities to serve our customers best. With Zain’s management providing strategic direction to address security challenges, we are constantly aligning our efforts to ensure that it is well targeted.
KA: What factors will play make or break for telecom operators within the region in the coming years?
SG: Innovation. The ability to become what the customer wants us to be in order to continue being relevant, and not what we think we ought to be. Non-voice and digital services are the drivers of the modern mobile communications industry and we expect them to remain so going forward. Thus we believe it is incumbent upon us to continue to transform Zain into a digital services provider in order to align it with where we believe the value is migrating to in our industry. Those service providers that do not act similarly will be overtaken, and I believe we ultimately fail.
We established the Zain Digital Frontier and Innovation (ZDFI) business unit to thrust Zain into the digital space by identifying new business areas, value-adding strategic partnerships, accretive acquisition opportunities and synergistic corporate venturing investments. Collectively, these activities look to create new revenue streams to maximize the group’s high-speed 4G-LTE broadband networks, customer assets, network intelligence and payment and billing frameworks. ZDFI focuses on the areas of innovation; digital services; corporate venturing; and smart cities.
On ZDFI’s part, we have identified substantial incremental revenue opportunities from the investment in smart city deployments in the Gulf, as well as from M2M. For example, we invested into a strategic stake in neXgen Group, a Smart City advisory and solutions entity based in the UAE that we are very excited about and expanded our existing Partner Market Agreement with Vodafone, in order to deliver M2M services to enterprise and government sectors across the region, with our operations in Kuwait, Bahrain, Jordan and Saudi Arabia at the forefront of this initiative.
We have also made strategic investments in several Venture Capital Funds (MEVP, Wamda and EarlyBird) that are focused on early-stage and growth-stage digital opportunities in Central and Eastern Europe, Turkey, the Middle East, and Africa that we aim to capitalize on by rolling out appealing and unique innovative services that arise within these funds. We also recently invested into a mobile solutions and consultancy entity, FOO, that we believe will help further drive our innovation efforts in the app development arena and deliver quality digital services to our customers.
KA: Do you believe combining SDN and NFV is the answer to many of the challenges faced?
SG: We believe that technology is important, but it is only as important as the need it is being deployed to solve. So indeed, Zain sees value in combining SDN and NFV, and this is to be expected given our networks are evolving to become all-IP. We face a very real challenge of network congestion and availability, and so technologies that allow us to manage these aspects better and more efficiently are of value.
KA: Please tell us about some of Zain’s initiatives in the e-governance and Smart City sector.
SG: As I mentioned earlier, Zain sees tremendous potential for astute service providers within the smart city space and have gone as far as investing in NeXgen Group. The combination of our two companies’ efforts sees us advising governments and mega real estate developers on the deployment of smart city solutions across the region, initially focusing on smart city opportunities in key Zain operating markets.
We believe that at the essence of smart city developments is connectivity, which is also the core business of the telco industry, and thus we believe we ought to be able to leverage our own vast experience in this area within the smart city environment.
With respect to e-governance, we approach this in much the same way as we do the enterprise segment. The two sectors’ profiles are broadly similar, and Zain is investing in adding capabilities to cater for the interconnected and often sophisticated requirements of enterprise and government users.
KA: Which issues from a policy and regulation perspective do you think need to be addressed at a priority in this region to foster an ecosystem for 5G and IoT?
SG: Cyber security is a big regulatory issue in IoT specifically given the level of interconnectivity and the resultant cascading effect of any cyber breach. A framework to ensure cyber resilience of the digital networks, devices, and sensors on which IoT and smart city ecosystems are built is essential for the sustainability of such environments into the future.
KA: Do you have any plans to expand into new geographical markets in the coming years?
SG: Zain continues to take a pragmatic approach to geographic expansion. We have reviewed expansion opportunities in the past, and will likely continue to as they present themselves. For us to progress any such opportunity, it would need to meet a number of different criteria and ultimately make sense from a value added perspective.
Going forward Zain Group and its operating entities are looking to remain vigilant and agile to market opportunities. We are all well aware that the telco industry is changing rapidly, and as one of the leading service providers in the region, we believe it is imperative for us to embrace these changes and be forward-looking in our approach to industry changes. These are exciting times for all stakeholders in the ICT value chain, traditional as well as new, and opportunities abound for the creation of significant value for all participants should they be agile enough to grasp them.