In an exclusive with Hatem Dowidar, GCEO, Etisalat, he expressed his confidence that the Group will maintain its leadership position in the telecom industry with an unwavering commitment to key strategic priorities to enable a future driven by digital innovation across their operations.
In line with the GITEX Global, Dowidar shared Etisalat Group’s major driving factors, international portfolio performance, expansion plans, sustainability objectives, and impact in the ICT and digital domain within the public and private sectors.
Can you take us through Etisalat’s successful journey this year, delivering a consistent strong performance in 2021 despite the world’s challenging dynamics right now?
Etisalat Group’s strong results are an outcome of our sincere efforts to drive growth and generate efficiencies despite unprecedented challenges in certain markets, thanks to the flexibility and agility in our efficient business model to deliver growth and a robust performance.
This was positively reflected in the financial results of the group with a market value of USD 58 billion and revenues touching AED 26.4 billion with a year-on-year (YoY) increase of 3.2 percent and consolidated net profit after federal royalty amounting to AED 4.7 billion.
These results are a reflection of our continuous endeavor to work in line with our strategic vision to ‘Drive the digital future to empower societies’ while remaining focused on our core business and exploring new growth opportunities ensuring that we are well geared for the future with our digital capabilities and solutions.
On the operations front, despite the challenges faced from the pandemic last year our robust plans on business continuity and crisis management helped in maintaining growth and business across operations. This was mainly because of our focus on three main factors that included advance crisis planning bringing in efficiency and flexibility, our advanced and reliable infrastructure and network in all markets, and our experienced teams who managed business operations when the world came to a standstill last year.
Many telcos faced major challenges from global markets but UAE is at the forefront of digital technology and connectivity and has the highest fibre penetration globally enabling consumers and businesses to study and work remotely during this period.
Despite these unique market conditions, Etisalat managed to grow positively due to the efficient management of our operational expenses not affecting the quality of services while the increase in revenues was slightly affected with investments focused on connecting all homes with fiber and launching enhanced offers for customers to upgrade their home and mobile plans at no extra charge to support them to work and study from home. Certain sectors were also adversely affected like tourism and aviation which invariably affected the company revenues as well, however we focused our energies on new digital services such as cloud computing and cybersecurity that became major enablers for business.
We are confident that Etisalat Group will maintain its leadership position in the telecom industry with an unwavering commitment to key strategic priorities to enable a future driven by digital innovation across our operations. At Etisalat, we are determined to continue the incredible transformation we have been experiencing in 2021 across our markets and believe that our major sustainable drivers of growth at Etisalat remain to be our international portfolio and efforts in the digital space. With regard to the latter, there is strong potential in the cloud, IoT and cyber security space, which will fuel future growth and rebalance telecom revenues and at the same time provide returns to shareholders and create added value for customers. With people working and studying from home, there was an exponential increase of 40 percent in the use of home internet during the pandemic.
What is Etisalat’s theme this year and can you explain the rationale behind it at GITEX Global?
Etisalat’s theme this year, ‘Shaping the new Digital Era’, highlights how in the new digital economy, we can leverage technology to be agile in the face of disruption and create new business models– post-COVID, purpose driven, sustainable and inclusive. It is about empowering the next era of digital technology where 5G communication, AI, IoT and machine learning enable a new way of living.
GITEX gives us an opportunity every year to meet with peers and technology leaders from across the world to share our experiences giving us an opportunity to showcase capabilities of telecom and technology to transform every industry from transport, retail, healthcare, education to fashion, automotive, utilities and entertainment.
What are the major driving factors that have added value to Etisalat’s leadership position and to the overall company performance?
The successes during the first half of the year was not limited to financial performance but also to the global achievements made in our infrastructure and networks.
Etisalat’s network was recognised the world’s fastest network and fastest fixed network in the GCC. These efforts have greatly impacted the country’s overall performance resulting to the UAE being ranked the fastest country in the world in January-June 2021 for average mobile download speed and was the only country from the MEA region to be ranked in the top 20 countries globally in fixed broadband index with the fastest average download speeds, as reported on the Speedtest Global Index™.
This global recognition is a result of the relentless efforts of UAE leadership for the past 50 years, and is a shining example of nation building with the growth and development achieving endless success. This is also in line with the late Sheikh Zayed’s vision to lay the foundation for future generations to build on.
Thanks to the support of the UAE’s wise leadership, our partners, and the regulatory authority Etisalat achieved leadership with the launch of the 5G network and succeeded in achieving the highest penetration rate in Fiber to the Home (FTTH) globally for a third consecutive year.
Can you take us through your international portfolio performance?
Etisalat Group today operates across 16 markets in Middle East, Asia and Africa in addition to the UAE, the group also operates in Saudi Arabia (Mobily), Pakistan (PTCL), Afghanistan (Etisalat Afghanistan), Egypt (Etisalat Misr) and Morocco (Maroc Telecom) with its operations in Benin, Burkina Faso, Central African Republic, Gabon, Ivory Coast, Mauritania, Mali, Niger, Chad and Togo. Many of our markets witnessed strong performance during the first half of the year resulting in a YoY increase of 7 percent bringing the aggregate subscriber base to 156 million. This reflected positively on the profits of the company that amounted to AED 4.7 billion representing an increase of 3.9 percent over the previous year.
For instance, Maroc Telecom witnessed an increase in subscribers with a growth of 8 percent bringing the total number of subscribers during the first half of the year to 73.6 million subscribers. This growth was driven by growth in operations in Mali, Burkina Faso, Ivory Coast, Chad, Benin, Mauritania and Gabon.
With growth from fixed broadband and international subsidiaries, Maroc Telecom’s revenues for the second quarter of 2021 amounted to AED 3.5 billion representing a YoY increase of 8 percent. Moving ahead to maintain this positive growth, Maroc Telecom will focus on investing in high speed broadband to meet the rising demand of voice and data services. This also applies to the other markets in which Etisalat operates where we continue to enhance infrastructure and invest in new technologies building the fastest networks in the world.
As part of its efforts to consolidate leadership in the markets it operates, Etisalat Group aims to increase its stake in Maroc Telecom from 48.4 to 53 percent, which will contribute positively to the profits of the group in the long run.
In Egypt, Etisalat Misr witnessed growth from mobile data and national roaming revenue, with an increase in subscribers by 3 percent bringing the revenues of second quarter to AED 1.2 billion, an increase of 27 percent YoY and 8 percent quarter over quarter. Etisalat Misr also continued to invest in innovation across verticals with partnerships like Canal Sugar Company, the first of its kind in the agricultural sector to digitally transform their financial transactions.
Etisalat Misr was also ranked among the second fastest download/upload speeds in the country. Keeping in line with its ambitions to provide its customers the best in services and content, along with E-Vision it launched ‘Etisalat TV’, a state-of-the-art app enabling viewers to enjoy both English and Arabic movies, series and Ramadan productions across smart devices anywhere and anytime.
In Pakistan, our operations witnessed growth mainly due to the positive contribution from all operations particularly fixed and mobile broadband and Ubank services leading to an increase in subscriber base by 3 percent to 25.6 million. This was positively reflected in revenues with a 16 percent YoY growth.
The rise in subscribers and revenue was due to the continuous investments during the year, PTCL increased its investments considerably to reinforce its digital footprint for maximum reach and engagement. PTCL also maintained market leadership in the fixed-line market, despite growing competition from Fibre-To-The-Home (FTTH) operators.
Another historical milestone was to increase and diversify with foreign investments accelerating growth that will help diversify the investor base and add further value to our current shareholders as well as bring liquidity and depth in Etisalat’s financial capabilities. This strategic development is a catalyst to achieve strong results in the future accelerating growth expectations in the coming period.
What are Etisalat’s plans in expanding its capabilities across its footprint?
The Group is continuously investing to develop the required capabilities across its footprint to address the evolving requirements of the various customer segments. To fuel growth both in the home market and internationally, Etisalat will continue to develop unique competencies, both organically as well as through selected mergers and acquisitions in priority areas. As part of this strategy, in 2020, Etisalat Digital, a dedicated business unit of the Group, completed the acquisition of Help AG’s businesses in the UAE and KSA. Help AG is one of the leading cyber-security companies in the Middle East and North Africa (MENA) region.
As we move ahead, the Etisalat Group’s strategy will remain open to growth opportunities through a majority control of well-positioned operators in target geographies. With the world continuing to adjust to the ‘new normal’, the Group will also stay focused on its strategic objectives of maximising value from its core business; growing revenue from its digital/adjacent services; transforming into an efficient, agile, digital Group; and expanding and optimising its portfolio in order to balance growth and shareholder returns.
What were Etisalat’s main goals this year?
This year Etisalat has remained focused on pursuing its vision of transitioning to a complete integrated ICT/digital solution provider securing its position as an industry leader by working on our main goals: reshaping the lives of consumers, accelerating the economic growth of businesses and enhancing the competitiveness of the countries in which it operates.
With changing market dynamics, the focus was combining organic and inorganic growth opportunities to position Etisalat as the regional leader in Internet of things (IoT), cloud, security, edge computing and Artificial Intelligence (AI). This was achieved by capitalising on opportunities such as megaprojects and smart city and Industry 4.0 projects across multiple verticals, including health, education, logistics and oil and gas (O&G). We also focused on taking all necessary measurements to protect our employees and provide the latest solutions to our customers.
How are you making an impact in the ICT and digital domain with your solutions, especially for the public and private sectors?
Etisalat’s 5G network will amplify the use of these futuristic services, target new opportunities, and implement 5G use cases across verticals. Our teams are constantly working on opportunities to deploy services based on emerging technologies such as IoT, cloud, big data, AI, robotics, autonomous, AR/VR, becoming a trusted partner that supports transformation in a digitally disrupted and fully connected world.
Expo 2020 is a prime example of Etisalat’s solutions aimed at enhancing the digital experience for visitors with technologies such as AR/VR. Services being hosted on the private and public clouds are one of the key priorities to provide redundant, fast and available connectivity between Expo 2020, its site offices, partners, public and enterprise services.
Our IoT platform connected over 1 million SIMs with renowned entities such as Emirates Transport and Xtramix for fleet solutions and Ministry of Interior for Hassantuk Smart Fire Alarm solution, which have had a massive impact on saving lives and enhancing the state of security for the country.
Can you give us insight into Etisalat’s sustainability initiatives and objectives?
We believe in the positive impact that technology can bring and strive to adopt technologies that ensure long-term benefits to our environment and the climate. Sustainability remains at the core of our strategy and operations aligned with the UAE Vision 2021 and the United Nations Sustainable Development Goals (UN SDGs).
The ‘Connected Mangroves’ conservation project in UAE is another noteworthy project combining IoT, cloud, mobile broadband technology that will help better manage the growth of new mangrove saplings by monitoring water level, humidity, soil moisture, temperature, and other important parameters critical to the healthy growth of the mangroves.
Another major step was our green efforts, where we have increased business via our digital channels, digital payments allocation and implemented digital self-serve options. The brick and mortar experience was transformed to both online and digital retail with self-service touchpoints expanding the rollout of ‘Smart Stores’.
As part of our efforts to move towards a paperless environment, we have also achieved many automation initiatives, including the switch of paper billing to digital copies as part of the Etisalat ‘Go Digital’ drive.
Etisalat also undertook a series of energy conservation mechanisms, including the installation of high-efficiency cooling systems at various Etisalat exchanges and data centres and AI features at mobile access sites.
Over the past 10 years, Etisalat has replaced all the cables, deploying to date over 10 million km of fibre optic cables, saving over 3,044 GWh of energy per year. This has also resulted in the annual savings of over 1.8 million tonnes of carbon dioxide in greenhouse gas emissions.