Egypt, new dimensions, new frontiers

Mr. Osman Sultan, President and CEO of MobiNiL

Egypt -
The Egyptian Company for Mobile Services

"The mobile in everyone's hand"

Interview with:

Mr. Osman Sultan
President and C.E.O.

Cairo, March 3rd, 2000
It has been one year since we interviewed you for Forbes magazine. Could you tell us about the major achievements which have taken place during this time?

Pehaps the most important event which took place during the past year is the tremendous growth of the mobile telecommunication market in Egypt. It has been the fastest growing sector in Egypt and I can say that it is definitely one of the fastest growing mobile telecommunication industries in the region, if not in the world.

This dynamic growth has been propelled by MobiNil, the Egyptian company of mobile services - we were under the challenge of rolling out all our infrastructure, developing the network and market services much more rapidly than original planned in the business plan. This was a very exciting challenge and the results where really beyond any expectations because we managed to increase our subscriber base from an initial base of 82,000 subscribers to nearly 600,000 subscribers today. At the end of 1999 we finished the year with approximately 540,000 subscribers. Overall, the entire Egyptian market moved from 82,000 subscribers to more than 950,000 subscribers, according to our estimates today, which is more than a ten-fold increase in a year and a half.

In terms of operations, figures show that in May 1998 we were four people working in this company and now we employ more than 1,300 people. There were 143 base stations for the network and today this has reached approximately 650 stations across the country. There were seven cities covered in Egypt and today there are approximately 50 cities covered in Egypt. Roaming, which is the capacity to use your MobiNil phone in other countries, was available in seven countries, which were mainly the Gulf countries. Today you can use this service with more than 130 operators in more than 60 countries. Finally, our value in the stock market was priced at 10 pounds a share and today it is rated at around 160 to 170 pounds per share.

Overall there has been tremendous dynamism in terms of operation service to the market and in terms of the economic development in Egypt. It has also experienced an extraordinary dynamic as far as development of human resources, skills and know-how in the country.

You mentioned that MobiNil has 130 operators in more than 60 countries. What is the region and areas which you are covering?

We cover all GSM operators working in Arab countries and in Europe. We now have agreements that enable you to roam in the United States and Canada. You can now use your MobiNil phone in New York, Chicago, and Boston, for example. It has been a significant effort to acknowledge that in Egypt, you have more and more business relations with other international partners. Egypt is in a process of opening to international business communities so we had to adapt our operations as well because our customers needed more; they are travelling more and doing more business abroad, so it was very important to have a specific effort put on that.

MobiNil's operations were initially focused on increasing the network capacity to adapt to the rapidly increasing number of subscribers, investing in network coverage and then investing in the human factor. Then you decided to focus on extending your distribution network and introducing new services?

Yes. In a response to the big appetite for mobile services in the Egyptian market, we needed to bring mobiles closer to the people. This was our vision from the very beginning.

It continues to be a challenge to bring mobiles closer to a larger and larger number of people. In Egypt we are still speaking about penetration rates of mobile use of around 1.2 to 1.5%, which is nothing if you compare to averages that you see in other European countries or the region. Our slogan has always been to provide a mobile for everyone. We know that this is not going to happen tomorrow but we think that it is a good vision because it carries the promise of development and prosperity in the country. It is included in our logo, "A Mobile in Every Hand".

We need to psychologically bring mobile services closer to people, and this is done by:

  • Working on tariffs. Making this gradually more affordable to larger and larger numbers of the population.

  • Providing more value for money, which is providing more services for the money you pay. Making people see that actually they are enhancing their comfort, their well being or their efficiency at work, making corporations feel that they can work with more productivity because they have easier communication between there employees and each other, so we became a major part of this entire process of bringing better telecommunication to the Egyptian market.

  • You have recently opened a Contact Centre, which is a new concept being introduced in the market. Is it a part of your strategy to provide better service to your customers and would you say that MobiNil is sufficiently customer oriented?

    The answer is clear that we think that the game will be played on the level of service. I strongly believe that in a competitive environment our most valuable asset is our customers. It's not the infrastructure we own, it is our customers and our employees.

    Ultimately, when you have happy customers, this generates a good working environment and a successful dynamic, and when you have happy customers and employees, ultimately you have happy shareholders. In our mission statement you have these three components:

  • Customers.

  • Employees.

  • Shareholders.

  • (In that order of priority.)

    Having said that, a winning game and the differentiating factor will be the level of customer service. This is why from the beginning we were putting a lot of effort on developing the best infrastructure for the customer. It is not an easy task because you have to develop the infrastructure, and the more customers you have, the more you need people. Now we have more than 300 personnel in customer service running a 24-hour, 7-days-a-week customer contact centre, and we are constantly increasing our personnel for this.

    We also need to hire trained employees, and through our recruitment process we recruit the best people, train them and establish a development program to update their competencies and their performance. We have a very important program called "People mean quality". Under this program we have an entire strategy to recruit, compensate employees, provide training, assist with career management, and allow for the sharing of information and experiences. People mean quality because we believe that when we do this, we can provide the best quality to our customers.

    We are very proud of the contact centre we inaugurated. It is the most advanced call centre within the entire Arab world and the Middle East, capable of serving up to 1.5 million customers. It is a major investment in state-of-the-art technology, but it is an essential instrument for our customer relations and contact management.

    I understand that you plan to reduce the amount of international experts from 100 people to less than 30 people. What is behind this move?

    I strongly believe that when you are in business that is a global business like mobile telecommunication, you need to have a balance between thinking globally and acting locally. It is true that you are using technology systems that are up to the highest standard world-wide, but we need to speak to this market in Egyptian. We need to tailor our offer to better suit the needs of the Egyptian market. This is a consumer good, so people use it every day, they go out with it in the morning and they use it every hour of the day, so it is imbedded in the way they live the way they live and work within society. So this is why thinking global and acting locally is important.
    Of course, we started with a large number of international experts that came from our international partners, France Telecom, Motorola and other international firms. We have a plan to decrease the number of international experts, and at the same time implement a comprehensive and intensive training program for our local employees.

    MobiNil has a wide base of shareholders, like France Telecom, Motorola, Orascom... What is the role of each shareholder and their contributions to the company? How much have they benefited from holding shares in MobiNil?

    You expect investments from your shareholders, and in return they expect returns on investments and profitability. So I have the fortunate privilege to say that we have happy shareholders.

    I created a consortium together with the chairman of this company, not necessarily to attract financial partners but to bring in people who could bring added value to the operations. This why the three major shareholders: Orascom Telecom, the local shareholder and major shareholder, France Telecom, the lead operator, and Motorola. These three contribute and support the operation, and each of them added a significant operational value to the operation of technology, the expertise and virtually everything.

    Recently Orascom has reached an agreement to acquire 80 per cent of Telesel. How will this affect operations of MobiNil?

    First of all, let me state again that the Egyptian company for mobile services operating under the brand name of MobiNil, has by definition a vocation to operate on the Egyptian market, which we are doing, and also to be the leading mobile telecommunication provider in this part of the world, which we are today. It happens that in addition to this we are fortunate that our three major shareholders, Orascom Telecom, France Telecom and Motorola, have a strong presence in the region. We feel that this can only give us more strength in the region. Any major changes in MobiNil have to go first through a validation by the board of MobiNil, representing the three major shareholders, who usually have common interests but sometimes they can also be competing against each other in other markets. So I think this is a fact of life, and the relations between the three shareholders within MobiNil is excellent.

    MobiNil shares are ranked among the highest on the Stock Exchange. Do you think that the new round of privatisations will take the Stock Market into a new phase of development?

    Overall I think that a good dynamic for the stock exchange can only be healthy for the entire country, favouring more and more investment, favouring investors and creating a dynamic market. I think that mobile telecommunication is the best evidence that there is a serious, ongoing process towards liberalisation and privatisation. If we look at the past of mobile telecommunications in Egypt, the situation was far behind any country in the Arab world. Now the situation in Egypt is the most advanced in mobile telecommunication and comparable to western standards. We have experienced a very dynamic competition and a very dynamic market growth.

    Strong political willingness, a proper regularity frame work and a good market and economic dynamic - I think these conditions exist today in Egypt to favour economic development.

    You have just mentioned how rapidly the process of privatisation took place in Egypt. In only one year, two mergers are competing in Egypt. Do you think that this example could be applied to another country in the region ?

    Hopefully. It is needed. I have been making these statements in regional conferences and I believe that Arab countries should be looking to the Egyptian example of mobile telecommunication. We want this sector in the region to develop, and we all know today that you cannot have any development in any sector if it does not rely on a very strong telecommunication sector. For tourism you need telecommunications, for trade, for the banking sector... for everything you need a vital telecommunications infrastructure.

    Mobinil has a magic figure of 600 000 subscribers. One year ago, there was a new actor emerging in the market which represents 60 per cent of the Mobinil share market. And now Iridium has joined the market. How does this affect MobiNil?

    I do not think that Iridium can be put in the same ballpark. It is satellite telecommunication, so it will essentially be complementary because it will not offer mobile telecommunication in the same areas. It is targeting another market, so I do not see satellite telecommunication competing with GSM specifically in areas that we are covering now very extensively.

    How do you see your market share involving, and what is your major challenge? Do you hope to increase your market share, and if so, how?

    I do not look at it mainly on a market share prospective. Our mission is to provide the Egyptian market with the best quality mobile telecommunication; the best quality to the maximum number. Telecommunication and mobile telecommunication are evolving day after day. Today it's voice, fax, data. Tomorrow will be internet applications and video. Mobile telecommunication will have new applications that we will think about and the market will let us know that these are requested. Our target is to do whatever we can do in this company to increase our ability to meet market means. We are confident that if we have the ability to serve this market, we will be gaining market share. I don't look at it from the point of view of market share. This is not the target. The target is to be on the game. You must provide the best quality service to this market.

    What are the features which make MobiNil unique?

    We are pioneers in a new way of talking to the market, addressing the market, and servicing the market.

    The contact centre is one of the examples our marketing campaign, our advertising campaign, our efforts to bring our mobile telecommunication services closer to people and to convince them they can have benefits or something new with us.

    Various sectors are becoming more and more complementary. Do you plan to extend or diversify your activities?

    In the telecommunication world today we see convergences between worlds that use to be dealt separately. First of all, generally you have the world of telecommunication, the world of IT, the world of broadcasting and media, and the world of publishing. Digitalisation has created multimedia content and brought all these worlds together. Within telecommunication, the worlds between fixed, mobile, and internet have joined together, and we are positioning ourselves within this context.

    We do not consider our business to be only GSM. We consider that our business is to provide the best mobile telecommunication service to the market. If customers need internet access, we will have to provide internet access. If they need to be linked to fixed lines, we will think about how to provide the best access to this. We do not think of it from a technologic evolution point of view, but from a market point of view and adapt our technology to this.

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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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