Egypt, new dimensions, new frontiers

Mr. Mohamed A. El-Hamamsy, Chief Executive Officer of Click GSM

Egypt -

Interview with:

Mr. Mohamed A. El-Hamamsy
Chief Executive Officer

Cario, March 1st, 2000
What have been the major achievements of Click GSM since the initiation of the project?

Our major achievement has not only been to meet the expectation that our shareholders had placed in the company but to surpass them. The target set forth was for 200,000 subscribers at the end of the year and actual number of subscribers reached 330,000. We provided unquestionably excellent processes and systems internally to serve our clients such as a superior customer operation support and call centers manned by a strong team. We feel that we have established an excellent team of employees. We believe that we have made a substantial contribution to the company in terms of technology transfer in learning how to manage and roll out a telephone network this being an indispensable utility, how to give a good service to the clients, how to meet their expectations and how to establish a team that looks after the modern management techniques in terms of management by objective, contribution schemes. We have a solid company, which has achieved excellent results in terms of the market subscribers and supporters.

What is the role of the different shareholders, in which way have they contributed to the company's development and how have they benefited from this partnership?

The main owner of the company is Vodafone-Air Touch with a 60% stake. The remaining 40% is divided into a number of shareholders, mostly Egyptians: 10% is owned by our chairman, Mr. Mohamed Nosseir, EFG Hermes owns 10%, besides we have Banque du Caire, MSI and other companies with a smaller stake. The role was to establish the company when the license was obtained in a time when Egypt did not have the necessary skills to roll out the network and the switching capacity to run a company, which offered GSM services. There was only one governmental company available, which later became MOBINIL. It was difficult to find resources to run such an operation. Therefore our main owners, Vodafone-AirTouch, invested their people, knowledge, skills and relations with suppliers to set up a company in a very short period of time to roll up a network and develop the product. Till now we have a number of expatriates coming in from Vodafone-AirTouch to assist us in different departments, while we have some of them in Egypt on a permanent basis to ensure that modern management methods and techniques such as customer calls are properly transferred. We are keen in ensuring that the shareholders resources are used to transfer the technology and help develop the culture of the organization in a western management style.

Today Click GSM's market share is about 38%. Are you satisfied with what you have already achieved or are you one of those businessmen who would say that there is no time for complacency?

There is no time for complacency for any industry. The way we look at the market is to take the long view. According to some analysts in Egypt there is a market for 12 to 15 million within 10 years. The penetration rate is still very low but if we are to consider that the rate in 10 years will be between 17 and 20%, it is not unreasonable to think that that market can be achieved. This means that at some point in time we will have 4-5 million subscribers, so will our competitor and a third operator may have another 4-5 million. We need to establish our image, our customer perception and satisfaction in such a way that when a customer think of buying our services, the quality, coverage or support would not be questioned. We are after acquiring a more solid clientele satisfaction.

You just mentioned that MisrFone / Click GSM needs to establish its image, but the truth is that under the direction of your predecessor, Mr. John Logan, the company kept a very low profile and it's been only recently that you began to invest more in building the company's image, branding and marketing your product. Does it mean a change in your strategy and if so, what is your final goal?

There is no change in the strategy. In the middle of last year the intake was faster than expected, therefore we barely had the capacity and the coverage to cope with what was coming. As a result we decided it was not the right time to market. When all of the above was made available we commenced building our image, investing in branding and marketing the product.

Click GSM's decision to go public is still uncertain. Can you update us on the latest developments regarding this issue?

The owners have not taken any decision on going public. The subject has been discussed and raised several times and they thought that there was no reason in going public, as we have no constraints in raising capitals.

Does the fact that Mobil's shares have proved to be among the best performing in the Egyptian stock exchange (initially priced at 10 Egyptian pounds, two years later they rose up to LE167) make it more encouraging for you to take the decision of going public, or is it in fact the reason for delaying it?

The shareholders studied the market very well and are familiar with the conditions and always take the long view planning 3 to 4 years in advance. The market's present liquidity and performance has had no impact on the company's decision. The L.E. 167 may rise into L.E. 200 or 300. They think that there is no requirement to raise capital or to have evaluation of the company for the balance sheet presently, thus there is no reason to go public.

Are you already laying the ground in preparation for the day when it becomes more suitable to float the company?

The best to be done is to stay on top of the technology and customer requirements and as long as these two elements are properly addressed either the shareholders or the potential shareholders can positively appreciate the value of the company. We are not doing anything that we would not be supposed do as a prudent and at the same time aggressive business organization.

Is your company sufficiently customer oriented, as you would like it to be?

There is definitely room for improvement. We are not sitting back satisfied believing that we are the best. We re-question our fundamentals daily.

In which areas of your activity do you think you should focus the most in the near future to improve?

We need to roll out the network to cover more areas and offer new services like WAP and to prepare ourselves for subjects like the third generation, in addition to strengthening our customer operations and call center, thus enabling us to handle more calls due to the increasing number of customers.

In today's telecom & IT sectors we are witnessing a convergence between different services which are becoming increasingly interconnected: mobile telephony, Internet, fixed telephony. What is your company's strategy and plans to provide your customers with an integrated service?

The land lines so far are not privatized or open to competition therefore is unavailable in terms of our strategy, yet when it comes to the internet we have realized the importance of acquiring these conversions, today there are about 100,000 to 150,000 paying subscribers, maybe even less according to some people. The number of Egyptian working businesses, and users asking for the integration of the service given to them and willing to pay for it are a minority, therefore the market is small and not ready, we find that the service is not yet required. It will come, therefore we are following the developments in other countries and observing what services are coming together as well as conducting studies concerning this issue and are planning to make our move probably towards the second half of this year.
What would you think is the feature that makes Click GSM unique in its sector in Egypt?

It is the customer care. We most definitely believe that it is the customer that comes first. We are doing our utmost to maintain our belief.

The primary call of your company is to become the most admired company in Egypt. When and how will this happen?

We want to become the most admired both in the present and future and in everything we accomplish. We spend a lot of time in planning how to achieve this status, and select only the best in all aspects to contribute in making us the most admired, whether in making decisions or recruiting the finest people that would furthermore enhance our position. We shall always be competing to improve the quality of the company.

Concerning the ambitious plans of the Ministry of Communications and IT, do you think that they are realistic and feasible, and what should be the contribution of the private sector and more particularly of your company?

The plans are very ambitious and reflect the political will of the government and have been developed in cooperation with the private sector in terms of both individual and associations of companies making them more credible as opposed to a plan developed by a single party be it the government, the private sector or just associations in the sense that whether the numbers will come out as expected in the first year, or whether it will take longer, experience shows that when you embark in this direction, it may take longer than you think to get started, but once the machine starts rolling it goes faster than expected. Thus we believe these plans to be of a benefit to the company and everybody should contribute to make them happen. We have a huge IT department. We are contributing by training and developing a generation of young engineers who can assist the telecommunications sector in a structured way, as well as developing skills and new technologies such as the call centers which add to the country's wealth.

Do you think you will see the day when most Egyptian brains will return to Egypt?

People are not confined to country borders. They are traveling all over the world moving from one place to another going after opportunities and self-realization. Egyptians make part of this trend. Qualified people like engineers or finance managers available in the market do not solely confine their search area to Egypt but look all over the world for job opportunities and self accomplishment. Egypt has taken tremendous steps forward to become competitive and re-attract those migratory birds as we may call them. Many young Egyptians who have been abroad for a number of years return to Egypt and join companies like Misrfone as they see that they can build good careers remaining close to their families. We are providing opportunities for brilliant young people to work and find challenge in an interesting job. Furthermore, we create opportunities for many expatriated Egyptians who have acquired experience abroad giving them a chance to return to their homeland

Can Egypt afford to have highly qualified people working abroad when they are so badly needed in their country?

You cannot close borders and prevent people from leaving the country. It all lies in the fact that job opportunities must be offered. Ten years ago Egypt was not ready to give qualified people desired opportunities. Today, more opportunities are offered for people to return to the country and although we cannot say that we are globally competitive yet, more optimism towards the future and planning towards establishing a better market and working environment prevail. The brain drain exists not only in Egypt but also in other countries such the U.K or Germany. Things are improving in Egypt and many people return.

How committed is your company to invest in local human resources and do you intend to reduce the number of foreign experts by replacing them with local people?

Yes, absolutely because continuity, security and commitment are provided to the company. This has already been done. In the beginning there were 100 expats while today the number has been reduced to 25-30 expats. It is our deliberate intent to reduce the number of expats for the good reasons of cost and continuity but it is also our deliberate intent to maintain some of them for reasons of helping the development of human resources culture and technology transfer.

Egypt is a country with a diversified economy, strong macroeconomic fundamentals, strategic location as well as excellent relations with the most powerful countries in the world, but the country is still carrying burdens such as unemployment, bureaucracy, deficit in the balance of payment as well as a low performance of both exports and foreign direct investment. What are, according to you, the measures that should be adopted in order to lift all these burdens?

We can start by having centers of excellence that people can refer to and improve, thus achieving their objectives by handling them in a modern management method. The government should not be solely responsible for accomplishing that, they can only do as much as they can, Egypt is not a rich country and they have many priorities. The private sector has largely contributed, by creating opportunities and providing many role models for young people who have the drive and have seen others before them and are going out and trying to change things in a positive way. There is a definite change of wind in the country and I believe bureaucracy will slowly change and adapt to tomorrow's faster world, thus attaining more result-oriented people.

Do you and your family think that Egypt is still one of the best places to live in and, if so, why?

The best place is a package, a person has certain expectations and it is that person's life that gives him realizations; satisfaction is achieved if a match exists between both. Egypt has an extremely high level of security, and hospitality, we may have a certain rate of pollution, noise, but I as I said it is a package and every country in the world has its pros and cons. If people coming here to visit or work try to make an effort and actually go out and interact with Egyptians they will be extremely happy, because by nature we are extremely helpful, compassionate and the smile never leaves our faces.

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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Egypt published in Forbes Global Magazine.
August 7th 2000 Issue.
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