Dubai to play a key role in Orange future
France Telecom's Orange Business Services remains bullish about the region and is confident of posting double-digit growth. The company's Senior Vice-President Philippe Koebel tells Emirates Business why the UAE remains a key factor in its success and how regional governments are gradually working towards allowing more competition.
Will we see Orange competing in other business areas in the UAE?
We are present everywhere and are able to get customers everywhere; this is our business model. We are able to do it in Abu Dhabi and Dubai, as we are anywhere else in the world. Selling services to a customer where the headquarter is sitting, such as Dubai for the Middle East, is what we call A-end customers. Indeed the A-end business is not allowed to us in the UAE and therefore we have to agree on a distribution agreement with etisalat and du or one of them. You can imagine that everybody, all operators, want to do this. Therefore, etisalat has plenty of agreements with all the companies, and therefore, by definition everything is cut into pieces. Given this situation there are not a lot of possibilities to grow our own business in this place.
Is there any indication this might change?
We had some discussions on this. But you must also see that the number of companies on the A-end is limited. Anyway, etisalat has a strong position. It will be a long period up to the moment where we will have possibly a significant market share here and therefore finally we are working with etisalat and it is going well. Therefore, we stopped any specific discussions on that front. On the other hand we have signed an agreement with etisalat in the past for activities, which are more on the domestic side where we have agreement on content development of services and this is going well. We have recently signed an agreement with its subsidiary Mobily in Saudi Arabia. Therefore, we have plenty of situations where we co-operate with them. And this is a situation we have been accustomed to handle in the past. We don't see any other possibility in the short term in these parts.
How confident are you of your operations out of Dubai?
If you look at the map you see Dubai sitting in between Iran, Saudi Arabia, Pakistan and Iraq. It's a sort of place where you can do business in the middle of countries where it is less easy to do business, so it's very well positioned. This is a point that has not changed even in the crisis. Therefore, typically the potential created by Saudi Arabia by all these companies around is massive for the future. Again if you want to send people to this region where do they want to go? And this is a major reason why I think Dubai will continue to be a very attractive place for companies. We are very confident and we will continue to launch our operations from there. There will be some people who will have to change their business orientation but for me the whole of Dubai will be very important in the future as it has been in the past.
What's your strategy for this year?
We have developed two lines of business that are critical. First is the network business with all its related services. This will continue to grow. We have been growing in double digits last year and we will continue that this year. I don't see any major evolution of the customer's behaviour as we are in a niche market because of the very nature of our multinational activity. I have no doubt this will continue in the markets where multi-national companies are located and this is essentially in the UAE. There's a little bit of this in Kuwait and Egypt.
Then we have the other line of business, which are smart cities. We have a series of projects. Some of them will not continue. Some of them will go to maturity and the strongest will be developed. If we have two or three smart city projects in 2010 they could be in Egypt, Saudi Arabia, Lebanon or Jordan, depending on the way it evolves. I am quite sure about Saudi Arabia and Jordan. May be even Egypt. The others we'll have to see. We have renewed one in Beirut and extended one in Qatar. In Qatar we had some licence problems that we couldn't overcome. They gave a licence to our competitor Vodafone so there were some issues we were unable to resolve short term but I believe 2010 will give us some business in the area. In Saudi Arabia we have not seen any cancellation. There was a change in Oman where we had to postpone for the moment but it was not to do with the crisis. Cancellations took place in Dubai and by accident we did not have any major project in Dubai itself. We couldn't do it because of the existing players.
Will regulation changes be forthcoming in the region?
We consider that more competition is helping everybody. It is helping us, helping the consumer, and also the monopolies because they are pushed to do better. In certain situations we can ask for a voice or data licence and are then able to provide services. If we want to ask for a licence and benefit in domestic activities there are just a small amount of places where we can find relevant, feasible markets. We would look at a third operator licence in Dubai if it is offered, but it would depend on conditions. What we're looking for is growth in the network business and in the smart cities environment. For instance, given a new city we cannot provide any services without going through etisalat, or Qtel or Telecom Egypt depending on project location. It makes our life difficult. Therefore, most probably in some cases the competition can mean a given country opening up certain areas to competition. In Europe we called it initially teleports. Places where we can do tests, where we can do it directly to compare and have an indirect impact on the quality of service delivered elsewhere. This is also a way to limit our investment and does not force us to choose between black and white.
PROFILE: Philippe Koebel Senior Vice-President, Orange Business Services
Koebel is head of the Orange Business Services Emerging Markets and Indirect organisation. Prior to this, he was the company's sales and marketing head for Europe, Middle East and Africa. From 2001 to 2004, he was also head of Global Sales and Marketing for Equant, which is now called Orange Business Services.
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