The first thing Osman Sultan (pictured above) does when he gets a call on his mobile phone is check the prefix. The Chief Executive of the UAE’s new telecom operator, du, experiences a quiet sense of achievement if it is a “055” number. The double-five prefix is a fixation with him, given that he nurtured to success a mobile company that stoked competition in an hitherto single-operator market.
“On a personal note it is most stimulating for me because I gave life to ‘five’,” the man who has five children told Emirates Business in an exclusive interview after his company crossed the one-million customer milestone. “Everybody at our company takes really seriously the mandate of du in bringing competition and shaking the entire market.”
Sultan is passionate about the benefits his customers can derive as he takes du to a level beyond simple telecommunications and convergence of technologies.
Sultan is the quintessential telecoms buff. His experience includes managing operations in several countries in Europe, the Americas and the Middle East. He was in charge of putting together the MobiNil consortium bid for a GSM licence in Egypt.
“I started a company in the most populated country in the region, the least penetrated, with a very low GDP. Then I found myself having the privilege of starting a company in the most penetrated market with one of the highest GDP growth rates in the world.
“However, both involved people. That taught me how to focus on the customer, the people.”
Competition is obviously becoming hotter in the UAE’s telecom market. What’s next after celebrating the millionth customer?
—Although we are proud and happy at this milestone of reaching one million subscribers ahead of our initial projections, we believe that we are still at the beginning of our journey. We have to continue expanding our market on three fronts. We want to take advantage of the extraordinary growth that is happening in the UAE. We want to leverage the growing usage of mobile phones and the third track for growth is obviously to appeal to a larger number of our competitor’s customers by offering them value for money.
We plan to expand on the front of full triple play – the convergence of broadband, voice telephony, and television and video nationwide. We launched our fixed voice telephony nationwide this year through the call select feature. We want to expand on that as well to get more and more people in and broaden our footprint. We have an ambition that has been announced. We had said that we will attain 30 per cent market share at the end of 2009. As we stand today, we believe that we will achieve this objective ahead of schedule. At the end of 2008, we will be closer than we anticipated.
Does that mean you will achieve break-even sooner?
—We hope so.
Do you not think there are limitations to growth in a market that boasts about 150 per cent penetration?
—I don’t think so. There is overall robust economic growth and continuing population growth. Growth is coming from increasing usage [of phones]. Growth is coming from attracting more customers from our competitors.
The tariffs you offer are already low in comparison to your competitors. But when compared to the tariffs in neighbouring countries as well as in the Subcontinent, they are higher. Will there be a parity or reduction?
—Pricing is becoming more competitive. That momentum is already there in the UAE. I think it will continue. Pricing in the UAE benchmarked to neighbouring countries is not higher on all components. However, we will look at adding more value to our offers.
The costs of running your business are mounting. To be profitable and to reward shareholders more growth is essential. What is your strategy for organic growth?
—First of all, I cannot make a comment as far as the share price is concerned. But I think that, like any telecom company, we are reaching profitability as quickly as possible. We are increasing our operational efficiency every day. We expect to reach profitability in three years.
What is your view on the possibility of a third operator entering the UAE market?
—I think this question should be addressed to the telecom authority which grants the licences. I don’t think it is appropriate for me, as chief executive of one of the telecom operators, to comment.
You need huge funding for infrastructure. What are your plans? Are you looking at expanding your equity base so that the debt-equity ratio can be increased?
—The board of directors is considering what are the best options for necessary funding that will allow the company to meet all its funding requirements. There are plans and I am expecting a decision.
Osman Sultan: '055' is alive