Mobily chairman: Broadband is horizon of growth
Abdulaziz Saleh Al-Saghyir, chairman of the board of directors of Etihad Etisalat (Mobily), rates the Saudi telecommunication and IT sector as the most competitive and most developed sector for many years to come.
Al-Saghyir, who has been chairman of the board of directors for Mobily since 2004, believes that contribution of the telecommunications sector to the gross domestic product (GDP) of Saudi Arabia places the industry in a leading position and will spur growth for several years to come.
Al-Saghyir stresses that mobile broadband will witness strong competition and praises the role of the Communication and Information Technology Commission (CITC) in the evolving situation
The following excerpts from the interview:
“Broadband” … “Broadband “, almost everyone in the telecom sector in Saudi Arabia talks about broadband. What is the market trend in this regard?
I think you’ve answered the question by stressing on the word “Broadband” at the beginning of the query. Please allow me to explain, why this transformation is taking place now. As we all know, penetration rates for mobile voice services ranged from 170 percent to 185 percent in 2011, and it is predicted to reach 250 percent in 2015. The market has reached saturation stage and has become unreliable in general.
I am not saying here that there will be no growth opportunities at all. Hence, the telecom players are forced to create new investment opportunities in order to maintain their leading position. The main players in the market need to offer new advanced products and services, and thus, they have headed toward offering broadband services, which have seen significant growth recently due to the adoption of advanced telecommunications technologies such as optical fibers and various types of 4G LTE.
The wireless broadband is a new trend in Saudi Arabia and it has a promising future if we know that the number of Internet users in the Kingdom has grown rapidly in recent years. In fact, it has become higher than some international rates.
What explains this transformation in the provision of the services, and does this transformation match international trends?
As I mentioned earlier, high penetration rates and the need to look for new growth opportunities have led the market to this trend.
Let me say that to achieve the development strategies of Saudi Arabia which depend on e-Government, operators need to spread broadband all over the country, and this requires launching advanced networks to support this trend.
The wide range of communication devices that have been produced recently contributed greatly in paving the way for more opportunities for growth and further development.
International Data Corporation (IDC), a global provider of broadband research, announced recently that the amount of data uploaded globally had exceeded 1.2 zeta byte which is equal to the data that can be uploaded in the memory of 75 billion iPad device.
IDC also predicted that the number to be doubled 30 times in the year 2020. If we look at the revenues of data sector and its associated services such as “cloud computing” and “M2M”, then the revenue will exceed the traditional telecommunications sector (voice services) revenues and would probably reach $ 990 billion in 2015, while revenues of voice services reaches $900 billion.
The growth in broadband related services will increase consistently in the coming years, for individuals and business sector, too.
In addition, these services and applications will affect the social life and create new patterns of work, which in return will provide new employment opportunities and more prospects of business sector.
All of this, ultimately, will be reflected positively on gross national product. I believe that broadband strategy must be seen as a state strategy and must be dealt by governments in view of this direction.
A recent study has shown that 60 percent to 70 percent of innovations and developments in health, social, educational and banking sectors that took place between 2006 and 2009 were due to the creativity and development of products and applications in telecom.
Would you please give us examples of those new types of services and applications?
Obviously, there are other aspects of growth including the development of other services such as banking services through mobile phones which can be also used to do all banking transactions via phone.
Another example is what is called “Cloud Computing” which represents the future of cyberspace through the dispense of the traditional form of computer, where all telecommunications services will focus on ease of use, time-saving and effort, in addition to high measures of privacy and security.
Examples include what is called “M2M” applications; where modern studies suggested that the number of devices to be able to communicate together will rise from 64 million to about 340 million in 2014.
Recently, the health sector has implemented some of these applications to measure blood pressure and blood sugar. These devices are linked with the cloud computing where all measurements registered for the physicians’ records to monitor them around the clock from anywhere.
For your information, “Mobily” has started the development of such devices under the umbrella of the M-health project which will be offered to our clients.
I have several examples of growth opportunities. Some of them need time to launch due to the market culture and readiness.
In your opinion what is the status of Saudi Arabia’s telecommunication sector compared to Middle East and North Africa?
In term of revenues, the sector is achieving relatively high revenues compared to other countries in the region. Last year, Saudi telecom companies posted SR61 billion direct revenues from their operations in the Kingdom with an average growth of almost 31 percent, according to Communication and Information Technology Commission (CITC).
In terms of size of technologies and services, Saudi Arabia’s telecommunication sector has achieved unprecedented numbers and achievements. Saudi Arabia was the first country in region to launch TD-LTE technology commercially through “Mobily”.
To gain a clear idea about the strength of the Saudi telecommunication sector, take for example, the average per capita spending on telecommunications services. In Saudi Arabia, the rate is SR998 annually while in both Malaysia and Turkey is SR. 784 and SR441, respectively, in addition to the contribution of the telecommunication sector in the GDP of the country. Liberalization of the telecommunication sector in Saudi Arabia, no doubt, increased the rates of growth in this sector therefore contributed directly to GDP along with other sectors.
Therefore, I see that the telecommunications sector in the Kingdom is leading the transformation in the region in general, and has obvious contributions to earn excellence.
Does this mean that the telecom companies in Saudi Arabia and the Middle East will beat their counterparts in some European countries?
I can assure that Saudi Arabia, and especially in the past few years, has advanced over a number of European countries in terms of wireless Internet distribution, added value services, networks’ qualities and finally in terms of rapid expansion where the Middle East and North Africa achieved an 8 percent growth rate in the telecom sector last year only. Today, it is estimated that growth rates will continue in the region until the year 2015, and will reach 6 percent, which is considered to be the highest on a world scale level.
In early 2007, Mobily set its Broadband strategy in a time when broadband figures were less than humble in the Kingdom and in the world too. Since then, we have been aware that the Broadband applications and services will play a major role in the lives of people and their work. However, 2009 witnessed a turning point of terms of creativity and broadband innovation, when new local and international players entered the realm and the sector became no longer confined to offering traditional services. At that point in time, Mobily decided it should become acquainted with the international developments. As a result, a restructure was made for Mobily with a clear strategy aimed at innovation and development.
As part of its new strategy, Mobily then launched the “Developers Community Forum”, one of its kind initiatives on the regional level; an initiative which will greatly contribute to the services’ development.
After that, and for more reinforcement and enhancement, we adopted the GED strategy, where growth and expansion are strategic themes. Broadband is the backbone of the strategy. We knew that in order to implement this strategy on ground, we had to provide an attractive work environment that encouraged innovation and development and so we did. Now we took upon ourselves the development of our customer experience program in the hope to stand out when it comes to serving our customers, not to compete in the telecom sector only but in all service sectors.
In your opinion, what is the role that the government may play in speeding up the broadband expansion?
We believe that the government should play a pivotal role in supporting the broadband expansion based on real initiatives and projects whether in adopting policies that guarantee the availability of Internet through broadband for each citizen and resident or through the cooperation and coordination with the telecom companies to start infrastructure projects under the umbrella and strategy adopted by the government.
For instance, in 2010, FInnish government announced rules that guarantee speed of 100 Mega/sec for each household that will be concluded before the end of 2015, so did France in 2009 when the government announced that the broadband internet is a legally acquired right for each individual. In the same regard, Spain adopted the same direction at the beginning of 2011. On the other hand, the American government agreed to share its Fiber Optics infrastructure amongst all operators despite the limited investment in Fibers in that country. Italy, in 2009 also pumped 1.5 billion euros in establishing the Fiber Company to speed up the spread of broadband’s infrastructure, and despite the first operator’s hesitance to participate in the Fibers’ infrastructure in each of Australia and Singapore, the mass plans to participate in the infrastructure went on all the way at the end. Hence, it is evident that the government plays a critical role in adopting the broadband strategy.
As an observer, how do you evaluate the commission’s contribution in its development?
CITC exerts a lot of efforts to advance through adhering to the basis of clarity and transparency and holding on to the principles of justice and equality among all the concerned players whether service providers, investors, the government and companies or individual users. CITC works on carrying out the government’s strategies and the sector’s policies adopted by the commission. Of course, the CITC’s mission is not restricted to just regulating the sector, but extended to enhance the IT sector through launching initiatives, developing internet services, fortifying data security and developing the IT and Telecommunications industry.
To this end, our colleagues in the CITC headed by his Excellency, Eng. Abdullah Al Dharrab, are exerting tangible efforts in developing the organizational structures and realizing more achievements that reflect the consecutive developments that the Telecom and IT sector is witnessing regarding technologies, services and applications that will contribute to the long lasting offer of diversified, distinguished and competitively IT and Telecom services.
What has kept Mobily away from regional alliances or foreign investments?
Mobily has huge and strong alliances at the regional level and leads major initiatives that neighboring countries benefit from. Mobily works with other regional operators in RCN cable which is 4.000 km long and $500 million. RCN connects Asia with Europe via the UAE, Saudi Arabia, Jordan, Syria, Turkey then Europe. This cable aims to provide Internet to more than 2 billion people through enhancing the connectivity quality and acting as the backbone for the international network. Mobily also acquired the rights to laying down the largest 17,000 km marine cable owned by “Tata” that connects South Africa to India and Europe through ground points in Mozambique, Tanzania, Kenya, Djibouti, Saudi Arabia and Egypt. This project will be fully ready during next year. In addition, Mobily has a number of alliances on a network and products levels.
Now, If you meant alliances in the inquisitional aspects, let me say Mobily is monitoring the telecom sector in the region and we will not hesitate in viable investment that brings high returns to our investors whenever an opportunity arises.
Where does Mobily get its power, especially if we consider the “fierce” competition in the sector?
When Mobily was launched in 2005, the company made a huge leap in the Kingdom’s telecom services due to its innovative management capabilities. Boradband also has helped us to achieve another leap in the market.
Mobily’s executive management, along with employees’ efforts, has won the secure e-government project” Yasser”. The project represents the second phase of the secure e-government project that include connecting 43 major governmental bodies to many affiliate sub-divisions.
Mobily is tied in projects with many governmental and non-governmental sectors in the kingdom. Such agreements added a lot to Mobily and enhanced services’ dependability that the Mobily offers day after day. Mobily’s executives understand the importance of this business sector. Finding advanced telecom solutions will contribute in adding a professional environment to work sites and this will facilitate communication process and raise the efficiency inside the organization with many managed services that Mobily provides to business sector.
How do you evaluate the economy in the Kingdom in the shade of the European debt crisis?
There is no doubt that the policies and procedures taken by Saudi Arabia protect its economy from any major impact from any international crisis. The wise vision and the role of all the concerned parties (the Higher Economic Council, Ministry of finance, SAMA) play are well appreciate