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Read our exclusive interview
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 MOBINIL – EGYPTIAN COMPANY FOR MOBILE SERVICES (ECMS)
"The Mobile in Everyone’s Hand "
Manager:
Mr. Osman Sultan, President & CEO
Contact:
Egypt :
Adel El Bendary , Spot On Public Relations
Tel. (20) 2 594.0029
Fax : (20) 2594.2770
Mobile : (20) 12 2123462
Email: spoton@intouch.com
Middle East :
Alexandria Mc Nabb , Spot On Public Relations
PO Box 8335, Dubai, United Arab Emirates
Tel. (9714) 491686 Fax: (9714) 493345
Email : lexnet@emirates.ne.ae
Web site : http://www.mobinil.com.eg
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 New Horizons Everyday
Through an unwavering commitment to coverage, as well as months of hard work, MobiNil is becoming a river that runs through the heart of Egypt. With its powerful GSM network reaching more cities everyday, improved quality and widespread coverage continues to be our main goal.
All this aimed at providing you with a service that sets global standards for excellence, meeting your everyday communication needs.
MobiNil thanks you for being our customer. This is just the begining. |
Strategy
About Mobinil…
The Mobinil GSM 900 cellular network in Egypt is operated by the Egyptian company for Mobile services (ECMS), an Egyptian public company. Mobinil is the consortium, which has acquired the majority shareholding in the Egyptian Company for Mobile Services (ECMS ). It is also the new brand name of the Egyptian national mobile telephone network to give a coherent identity to the services being offered by ECMS. The partners in Mobinil are France Telecom , Motorola , Orascom Technologies ,Al Ahram investments , Systel and the agent of Alcatel in Egypt .
The Mobinil consortium holds 68%o f the issued shares in ECMS.
What is Mobinil’s aim now?
The first phase of Mobinil operation is to survey and evaluate the mobile network facilities in place and to asses the fastest way to bring new capacity and services to the network. That work is already taking place, but it is a big task. It is a very important step, as it will form the foundation of our work over the next few months. Our aim is to build upon the existing network in every way, implementing new systems, building
new resources, adding new equipment and communicating with our customers. We are bringing the finest technical and business management to bear on the task , and will be bringing staff with specific expertise in from overseas to work alongside their Egyptian colleagues in order to ensure that our Egyptian staff receives the best training and assistance possible during this first phase.
Where did these lines come from? Why weren’t they there before?
Mobinil’s first move has been to upgrade the switching capacity of the network, investing in the addition of new lines to the existing infrastructure. With the technical experience and resources now available to us , we are able to do this quickly. The upgrade to the central switching didn’t require expansion of the other network facilities as these have capacity to handle the extra users . It has been our first priority to accomplish this task . The fact that we have been able to do this so quickly should give an indication as to just how fast we are capable of working: we have a great deal more work to do and we relish the challenge !
What’s next?
Further expansion of the network’s capacity is our next move. For this, we will have to upgrade equipment from the central exchanges right through to the antennas you see dotted around the city areas. We are working on a planned set of expansion phases which will allow us to build the network alongside the growth in demand for services in Egypt. In addition to increasing the capacity of the existing network ,we will also be increasing the coverage area of the network, which means that subscribers will be able
to get mobile services in more and more locations outside the central city areas .
Network Expansion…
Egypt’s leading mobile telecommunications provider, Mobinil, has signed contracts with Motorola Inc. Of the USA and Alcatel of France, for the expansion of the Egyptian mobile Communication network, to a value of over 400 million Egyptian pounds. The investment is being made to enhance and expand a service already being enjoyed by over
150,000 Egyptians today.
" We have all heard too much talk about the future" said Osman Sultan. "What Mobinil offers its customer is service today, even better service tomorrow and services that stand among the world’s best the day after tomorrow. And we keep our promises. We have already shown that, and we’ll continue to keep up our record of delivering on our vision for today and for the future" added Mr. Sultan.
Top of page
INTERVIEW WITH
Mr. OSMAN SULTAN
PRESIDENT & CEO OF MOBINIL
Monday 30th November 1998
1/Q: Mr. Sultan, could you give our readers a brief historical background and the current structure of the MobiNil consortium?
The entire venture started in November 1997, exactly one year ago, with a tender that was issued by the Egyptian authorities for the award of a GSM license. Parallel to this, the Egyptian authorities initiated the process of privatization of the existing GSM mobile operator. At that time, the service was operated by the national telecom operator, which is now called Telecom Egypt and a consortium was created. This consortium grouped two major international players, who, for different reasons, had a significant interest in the Egyptian market and decided to join forces. On the one hand there is France Telecom Mobile International , the international mobile arm of the France Telecom Group and on the other hand there was Motorolla Network venture, which is the network operating part of Motorolla, the U.S. telecom company. These two international players joined forces with major Egyptian partners in the field of telecommunications, computers and distribution and the field of marketing. The major partner is Orascom Technologies. So, France Telecom, Motorolla and Orascom decided to join forces to seek an opportunity to provide mobile telecommunications services in Egypt.
Two consortiums presented their bids as an answer to the request. The two consortiums were awarded the existing service and the new license. Each had to pay a price for the license that was equivalent to L.E. 1.750 billion. That is roughly equivalent to $520 million that were paid to the Egyptian authorities as the right to provide services. This is a very short history. France Telecom Mobile International, Motorolla and Orascom Technologies constitute the MobiNil Consortium. Together with other local partners, the representatives of Motorolla in Egypt, the representatives of Alcatel in Egypt, the well-known Al-Ahram newspaper took control of 68% of the operator which is called the Egyptian Company of Mobile Services. MobiNil took control of this 68%. The other 32% were open to public subscription on the Cairo stock market. It is very interesting to see in the frame of the privatization process that these were oversubscribed over 40 times. It was a very solid interest in these shares.
2/Q: Egypt has now a new competitor in the mobile telecommunications field. Mr. Logan, CEO of MisrFone, announced several plans and added that they do not want to steal customers but to grow the market as a whole. How do you foresee this competition?
I think that it is true that it is now a very important time for the Egyptian market for telecommunications because now in Egypt you will have two private operators that are constituted by international players that have joined forces with Egyptian partners. They offer mobile service to the Egyptian market. Regardless of how we view this competition, it will be good for the Egyptian market because this competition will be a driving engine for each of the companies and they will provide the best. We are in a situation where the consumer has a complete choice now. I see this competition as a major factor to enlarge this market. Today, the penetration rate, which is the number of people using a mobile phone to the total population, is very low in Egypt compared to Western European and American markets and even when compared to nearby markets in the Middle East like Lebanon or the Gulf. Nevertheless, I believe that the Egyptian market is a great potential. You have a country with a population of over 60 million, with a very high density. Cairo alone has more than 15 million people. The people have a communicative nature. Today, the average usage for a subscriber per month is higher than 500 minutes compared to 150 minutes in some European countries. We know that in this part of the world if we compare experience that we have as operators, the people tend to speak more on the phone and these averages are higher. We add to this the entire process that Egypt is going forward, in terms of opening up to business and the growing business opportunities that we can see. In addition, consider that telecommunications tend to be more and more a very important factor in helping businesses to grow and increasing the efficiency of individuals and companies. Mobile telecommunications play this role more and more. Putting all these factors together, we can see that we have an excellent opportunity in a market that continues to grow. So, I think that competition will accelerate this process.
3/Q: Our readers are very much interested in figure. Could you give us some numbers like the number of subscribers, the current coverage, number of employees, annual turnover, etc….
When we took control of the network we had 80,000 subscribers. This was on 21st May 1998. The company is over 6 months old. Now, we have about 150,000 subscribers. We had a performance that I think has never been equaled in other parts of the world. We were able to put in place and everything that was needed and started to reopen the service. New subscriptions were stopped in January 1998. We reopened subscriptions on July 1st, 1998. It took us about 4 weeks to set up a customer center and put everything in place. We absorbed a waiting list of 30,000 customers in less than a month at this center. Network capacity has been increased. By the end of 1998 we will have the capacity to absorb more than 300,000. I do not think that the network capacity is the major issue. Today, we cover 15 major cities in Egypt, some of the major roads. Our license commits us to cover 85% of the populated areas in less than 4 years. We will be covering more than 95% of the populated areas in less than two years.
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It is a little bit premature to discuss annual turnover. Today, we are getting an excellent market feedback. I think that this market was really eager to see a service company that is customer oriented. This does not mean that we do not have a long way to go to create a real culture of customer service and a real customer oriented company. In addition, we do not only have 150,000 subscribers but we also have over
100,000 shareholders. This is creating a very strong link with the market. For weeks our shares were the major ones on the stock exchange.
4/Q: MisrFone announced an innovative pricing plan. What about MobiNil’s plans?
You are referring to the prepaid cards system that they announced. It is something very common that you offer to the market the possibility to subscribe and to pay with invoices or according to the prepaid system. We are announcing our prepaid system in the coming month. I think that there is no hurry. What is very important and what we have already launched at the beginning of November is what was a request from the market for a pricing system according to different needs. There were no schemes like the one that we see in other markets that will allow users to pay according to the amount they use. We put three pricing schemes. If you look to other markets in Europe, you will see that this method of payment was a classic one. Still, it was important to put everything in place to send a sign to the market that we spent months listening to what it needs and we acted accordingly to accommodate those needs. This scheme recognizes business and heavy users from those who have little use for the phone. This has been done. Then, we will be introducing the prepaid cards for people who would like to just get connected and receive calls more than making them according to standard pricing schemes.
5/Q: One of MobiNil’s commitments is to provide its clients with services. You are already offering value-added services such as international roaming and others. Are you planning to offer them much more services?
Yes. We talked about the network’s capacity and I told you that I do not believe that the capacity of the network is the major issue. We have taken certain measures and the capacity of the network is now allowing us to support any load that we could have. I think that what is needed is the entire service infrastructure to support such load. In less than five months, we signed agreements with more than 160 distributors from distribution outlets in the country and checking their quality and their ability to inform our customers who want to subscribe. This is part of being close to our customers. In less than five months we have completely reviewed the billing system and done the necessary upgrading in order to allow us to go in what we call "new services". What is important is not to show concern about the price and just drop it but rather to give people value for money which can be given by adjusting pricing to their usage, which we did in early November with new tariff plans, and by providing services that will give them value. What we are already providing is the already existing value added services such as voice mail, call waiting, forwarding calls, knowing the number of the caller… All of these are standard services. We have increased the roaming agreements so that we will be covering 60 countries with roaming agreements that allow our subscribers to call in these countries and allow the visitors from these countries to use our network. When we took the network there were mainly the Gulf countries. Now, we have covered all the Arab countries and most of the European countries. Moreover, information services will be launched very soon. The capacity will not only to make calls but to make life easier which refers to home delivery like McDonalds, Pizza Hut and so forth, getting financial information services on the phone about the stock market, and information about travel services on the phone . This again applies to the service culture. We have an agreement with American Express to provide travel and reservation services. We did all this very rapidly because we needed to show the market that we want to provide services. Furthermore, we are going to promote different things to encourage our customers to have a loyalty relationship with our company through a constant communications channel. Since we took over the network, we have regular contacts with our subscribers. I insisted on this feature because I believe that the subscribers will appreciate that their company is talking to them. We were very honest. We put advertisements in papers when we had technical problems with the network to inform our subscribers and (why not !) apologize.
6/Q: Investments are essential to growing the market. Our readers are very much interested in new business opportunities. In which areas of your activities are you interested in attracting new investments?
Such operations require heavy investments. The infrastructure requires a lot of investment and we have a lot to do in the infrastructure of the network expansion. We announced in August 1998 that we signed two contracts, one with Alcatel and the other with Motorolla as equipment suppliers. The total amount of those contracts were about $120 million over the coming two or three years. We need to invest in our distribution networks. We are creating our own shops all over the country. We need to invest in our human factor. This is part of the intangible investments. It is a very important dimension in Egypt. When we started this project in late May there were less than 5 people who were involved. Today, we have more than 500 Egyptians who have been recruited in the company and they are all in a training process. To recruit those 500 skilled Egyptians was in itself an achievement. They are working with 80 to 100 international experts. The number of these experts will decrease to less than five in the third year, which means that we have a tremendous effort in the transfer of know-how and technology. We need to have local experts with the appropriate skills to be in charge.
7/Q: As people say in the USA, contacts often mean contracts. What are you doing in order to encourage greater contacts?
Today, this has not been a priority. So far, what we have been doing is to target our markets and increase the contacts that we have with our local customers. This is our major priority. Nevertheless, we have contacted banks and we have contracted a Bridge loan of $490 million in May 1998 in order to pay for our license and have the necessary means for the necessary investments. This loan will be transformed to a short term financing and we are discussing this with different banks and consortiums, both U.S and European financial institutions. On the other hand, we are developing our relations with investors because we are listed on the stock market. There is a significance interest in our shares. We have created a department to provide the necessary information that these investors will require and to keep a channel for all these investors.
8/Q: The Egyptian experience has provided food for thought for other countries planning to introduce telecommunications competition like Morocco or Jordan. What is your opinion about this?
As a person who was involved in business development before taking charge of the operations here, I followed what happened in other telecommunications environments. If you look at the Egyptian experience during the last year you can only be amazed at what the Egyptian authorities have accomplished. They have issued a call for tender that defines the necessary required conditions that they wanted. They have created the necessary legal and regulatory environment to privatize the mobile part of the existing operator. They have listed shares on the stock market of this recently privatized operator. They have analyzed the bids, awarded a license and then brought another consortium within the first company. Then, they awarded the second license, negotiated a license and interconnect agreements. Then, they listed on the stock market. Today, we have two completely private operators competing in the market. This has been done in just one year. In just a couple of months they paid more than $1 billion in cash for the government. In other countries, the bidding process alone takes six months. I believe that other authorities in the regions are looking at this experience to benefit from it. In addition to what I mentioned, you have to add all the dynamic activity that was created by MobiNil and MisrFone in terms of employment, working with local contractors, marketing and advertisements etc…
9/Q: How confident are you in the future of your company and your country?
I believe that Egypt has a very strong potential in terms of a market for mobile services. We had some difficult times because we had to put together the company while dealing with existing customers for whom we had to provide services. The way that the market is reacting to what we have done makes me feel very confident in our ability to provide our best for this market and to succeed.
10/Q: Could you give us your personal background?
Since May 21st I am the President and CEO of the Egyptian Company for Mobile Services that operates under the name of MobiNil. I was working with France Telecom Mobile International as Vice President for business development in charge of the Middle East and the Arab Countries. With their recommendation and that of the others partners I had the privilege to lead MobiNil. I have been working for 15 years at France Telecom in different positions, sales, marketing and customer services. I headed a subsidiary in the USA involved in the online business. I am an engineer.
11/Q: What is your final message to our readers?
I have to ask them to come to Egypt, enjoy the country and use our services. |
© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Egypt published in FORBES Magazine,
May 31st issue.
Developed by AgenciaE.Tv |
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EGYPT
