Interview: Nasser Marafih
To what extent do you expect further consolidation between mobile operators in regions like the Middle East and North Africa (MENA)?
NASSER MARAFIH: While we expect there to be further mergers and acquisitions in the MENA region, we have seen a slowdown in the past two years and expect that to continue. In this environment, group operators are best positioned to leverage the scale of their resources to provide customers with the best services. We also see tremendous opportunity to derive more value from our networks. Operators must ensure profits while meeting growing demands for data. Network sharing enables operators to improve coverage and facilitate faster roll-out of 3G/4G networks, while lowering costs. However, network sharing depends on a variety of factors, including technical complexity, local market conditions, government regulations and the reluctance of our competition to partner. For example, we have already seen a strong return on Indosat in Indonesia, monetising and simplifying business by making a sale and leaseback of 2500 towers. This one-off transaction has provided us with operational flexibility and valuable experience. We are looking at the viability of this approach in other markets, including North Africa.
In which ways do voice services still offer significant growth potential in the MENA region?
MARAFIH: We see significant potential for growth in voice services in MENA markets, including among blue-collar workers, high-end users and new businesses. People will always love to talk – instant messages, SMS and email cannot replace conversations with friends, family and business associates. As voice tariffs fall, we see customers taking advantage of lower voice rates and attractive packages, even in highly mature markets like Qatar. In the past year-and-a-half, the region has seen great upheaval. As these economies recover and develop, we see significant opportunity to cater to new businesses. Furthermore, new and improved communications services are fuelling countries’ GDP growth, which in turn boosts incomes and makes data services and smartphones increasingly affordable for our customers. Data usage has skyrocketed over the past several years and is one of our fastest-growing segments, driven by smartphone adoption and improved infrastructure. One in three clients uses data services. Even in markets that do not have a 3G network yet, like Algeria, we are seeing a strong demand. To meet this growing demand, operators must upgrade their networks to provide a strong connection and high-quality service. However, providing faster service is not enough.
Operators face a challenge in improving monetisation of usage while continuing to provide customers with top-notch services. Additionally, we must provide more support so clients can easily set up their smartphones and download applications. These applications need to provide relevant content in the appropriate language and in a format that is easy to read on mobile devices.
What impact does government involvement in ownership disputes have on the attractiveness of the broader operating environment?
MARAFIH: All around the world, governments, regulators and operators need to work together to provide residential and business customers with the best possible products and services. As we have increased our investments in Algeria, Tunisia, Kuwait, Iraq and Indonesia, we have found governments and regulators to be helpful partners. We concur with many operators on the need for capital expenditures on fixed networks to provide a more cost-effective backhaul. At the same time, governments are considering national fibre networks, which could delay operators from making their own investments. We believe fibre deployment should be an open and competitive process, with government and regulator support, and are constantly re-evaluating how to further reduce operational costs. We see an opportunity to create more synergies in these areas, such as through our pioneering “green power” initiatives that emphasise renewable sources of energy.
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