In an exclusive discourse with Telecom Review, Aziz Aluthman Fakhroo, managing director of Ooredoo Group, talked about the most recent milestones the Group achieved, its optimistic outlook for the rest of 2021, and its continued commitment to digital transformation.
Ooredoo Group recently announced the merger of your Indonesia operations with those of CK Hutchison, can you tell us more about this transaction?
This is a landmark telecoms transaction in Asia, with a value of approximately US$6 billion, and is undoubtedly a momentous event for Ooredoo Group.
The merger is still subject to approvals, but upon closing it will bring together two of Indonesia’s leading telco brands, and two highly complementary businesses, to create a new world-class digital telco for Indonesia and to form one stronger number-two player with revenue of around US$3 billion.
This major transaction is perfectly aligned with our growth strategy and one which we believe will deliver great benefits for all shareholders, customers, employees, and for Indonesia.
Through economies of scale and the realisation of synergies as we integrate the highly complementary networks and operations of the two businesses, we anticipate the merged company will deliver higher profitability and returns to shareholders.
For customers and for Indonesia, we will create a digital telco ready to drive the innovation and investment that will deliver improvements in network performance, customer experience and support Indonesia’s digital transformation.
Importantly, the merged company will be backed by not just one, but two strong and committed partners in Ooredoo Group and CK Hutchison. I believe our combined strength, experience and expertise will set the merged company up for great success in the future.
Based on its reported H1 2021 results, Ooredoo had a good first half of the year. Can you expound more on this performance and how it can impact FY’s outlook?
Indeed, we had a strong first half 2021, with a rewarding revenue increase of 3% compared to the same period last year. This positive trend is mainly supported by the continued implementation of our strategy and the growth of our business across different markets.
Following on from a potentially difficult period amid the pandemic, Ooredoo Group continues to enjoy resilient operations thanks to our balanced and diversified portfolio of assets and a clear focus on digital services. The company continues to build upon two of the cornerstones of our operations; deploying powerful technologies and providing reliable connectivity and innovative products to our customers. As a result, our customer base grew by an additional one percent, reflecting customer confidence in our offering.
A major achievement in the first half of 2021 was Indosat Ooredoo's sale and leaseback agreement with Edge Point Indonesia for more than 4,200 telecommunications towers. The transaction was valued at USD 750 million, making it one of the largest deals of its kind in Asia. This came as part of our strategic endeavours to become more asset-light, extracting optimal value from our infrastructure by executing network sharing and other infrastructure deals.
It is of note that the investment and roll-out of our networks, including 5G in a number of markets, is proving essential to developing community resilience, particularly with the pandemic-induced rapid shift to working from home and virtual learning. Clearly in many countries both business and education are evolving, and as Ooredoo Group is ideally placed to facilitate changes involved in this evolution, a natural outcome will be a positive impact on our financial results.
In Qatar, our home market, we recorded a strong performance with growth in terms of Revenue (+5%) as well as EBITDA (+2%). Indosat Ooredoo continues to deliver robust results across the board, contributing significantly towards Group growth, with a 14% increase in revenue and an improved EBITDA margin of 50%.
Cost control and efficiency measures resulted in a 13% improvement in EBITDA for Ooredoo Kuwait and 8% for Ooredoo Algeria. We recorded 8% more customers for Ooredoo Oman and 9% more customers for Asiacell, Iraq. Ooredoo Tunisia recorded positive trends for revenue (+8%).
We have continued to execute our active portfolio management strategy as demonstrated by the announced agreement with CK Hutchison to merge Indosat Ooredoo with Hutchison 3 Indonesia. This landmark transaction gives us great confidence that our strategy of digitalisation, streamlining our operations, maximising efficiencies and extracting optimal value from our infrastructure is paying off.
As we look ahead into the coming months, we remain optimistic. Given that our start to the year has been so positive, we expect this positive momentum to continue to drive our success as the year progresses.
We believe we have made the right investments to continue delivering long term value for our shareholders, customers and countries in which we operate.
To what extent does Ooredoo’s transformative 5G roadmap match the growing expectations of dynamic connectivity and enriched digital experiences?
As technology develops, so does customer demand. Networks have progressed tremendously – 2G to 3G, the 4G on which we rely as a matter of course nowadays, and of course the rapid enablement of 5G – and so our customers realise the potential of the technology harnessed, and expectations increase accordingly.
Having taken the early lead in testing, trialling, and launching 5G in Qatar - before taking it to Kuwait, Oman, the Maldives and Indonesia - I can confidently say that we are very well placed to roll out this technology and the wide range of use cases that comes with it.
In fact, this is how we are keeping our promise to enrich people's digital lives and enhance their experiences. Ooredoo is building a strong 5G ecosystem across its footprint, one that matches the growing expectations of a more connected world.
Online gaming and eSports are timely examples of pent-up demand on faster speeds and lower latency. As you know, eSports now constitutes a multi-billion-dollar industry of global significance. Its emergence has led industry analysts to identify eSports as both a key economic trend in markets for data and as a future driver of strategy in the telecommunications business.
Gamers and eSports professionals need advanced networks and stable connections to be able to compete. This network reliability can mean more chances of winning for the players and a transformed fan experience for watchers, particularly as Virtual Reality (VR) and Augmented Reality (AR) features are gaining momentum with 5G.
To cater to the rapidly emerging eSports domain, Ooredoo Qatar has recently launched its own eSports brand, "Ooredoo Nation – Gamers' Land". The brand is a fraternity which is beyond geographical boundaries; a community of gamers that grows faster by the minute, inventing, innovating, creating, evolving and raising the game.
By positioning itself as the go-to brand for this youthful, data-intensive, high-revenue activity, Ooredoo aims to establish leadership in the eSports domain and build the activity into an important revenue stream.
Other additions to the milestones achieved in our 5G roadmap would include the immersive 5G experience that football fans got to live remotely - while getting a taste of VR while watching the Amir Football Cup final match LIVE at a Virtual Stadium in the Mall of Qatar - and the future of healthcare that we showcased with a pilot 5G connected ambulance. These are just a few examples of how we are staying ahead of the curve.
Ooredoo Qatar has continued its commitment to digital transformation. How does building the Qatar Smart Program (TASMU) platform respond to the demands of smart cities?
It used to be said jokingly that there were more people writing about Smart Cities than actually living in them; it is evident this is now changing, and it is vital to give smart cities the tools needed in order to progress and meet the needs of their citizens.
Qatar's digital transformation will lean heavily on the TASMU Platform, the single point-of-contact for public use. This platform will harness advanced technology and innovation to provide smart solutions and applications, mainly across the sectors of transportation, healthcare, logistics, environment and sports.
Thanks to Qatar's wise and visionary leadership, a great focus was put on investing in emerging technologies and innovation, which will drive sustainable development and economic diversification.
With this in mind, the TASMU Platform was designed to create and foster an enabling digital environment for citizens, residents, service providers and other players, by powering and linking all sectors, smart solutions and digital services in Qatar. Ooredoo aims to help all involved to experience the provisions of a smart city end-to-end, by providing support in the areas of innovation and research for entrepreneurs and businesses.
Another major advantage of the system is that its open-ended architecture allows it to scale up as the needs of the smart city change, in line with new technologies, population growth or changing customer expectations.
Ooredoo was hailed as “Kuwait’s Fastest Mobile Network” in 2021. What were the proactive steps taken by the company in providing the best and fastest coverage?
As you know, Ooredoo Kuwait was the first company to roll out a 5G network in the country in 2018 and this roll-out was completed in 2020, with a huge investment in advanced networks. Ooredoo Kuwait has also invested heavily in the fibre roll-out and transport network modernisation during the same period.
Providing the fastest, most reliable networks has long been a key aim and priority for Ooredoo Group and its operating companies. Indeed, we have been recognised for our performance by a leading global provider of fixed broadband and mobile network testing data and analysis.
Of course, behind the scenes of network development lies a raft of processes and procedures, including regulatory requirements, testing and infrastructure. We leverage our previous experience of network development and apply it to new projects, and rely on our many partnerships with world-leading technology providers to ensure we are working with the absolute latest cutting-edge innovations that allow us to provide a service second to none.
We also research and learn from our counterparts around the world, to allow us to benefit from their experience and expertise, and adapt technologies and methodologies that suit our markets and consumer demands.
In line with Ooredoo’s digital transformation agenda, Ooredoo Kuwait launched its Cloud Connect service in partnership with Microsoft Azure. What is the importance of boosting cloud adoption in this area at the present time?
Cloud computing for businesses has gained increasing importance in past years. According to Gartner, end-user spending on public cloud services is expected to grow over 20% in 2022, with predictions that it will exceed 45% by 2026.
This technology has become an imperative to businesses, as it ensures business continuity, accelerates digital transformation, improves the security of the IT environment and can significantly reduce IT-related expenses.
As Ooredoo pushes forward with digital transformation plans across the markets we serve, moving to and offering more resilient solutions that provide flexibility, accessibility and scalability has become a strategic necessity.
We have partnered with Microsoft in a number of our markets, including Kuwait and Qatar, to offer our business customers the latest cloud solutions that will enable them to better engage with customers, empower their employees, and optimise operations. By moving to cloud computing, our business customers of all sizes are able to benefit from technologies such as business intelligence, machine learning, predictive analytics, smart bots, and IoT field-connection services, thereby leapfrogging their digital transformation.
Forming such partnerships is a way of staying ahead of the curve in this challenging digital environment.
Delivering industry-leading innovation is a continuous process, especially in the mobile operators’ industry. How does Ooredoo plan to advance its services and offerings across its global footprint?
Indeed, we are still seeing phenomenal growth in the telecoms industry across the globe, particularly post-pandemic. New opportunities in new industry sectors are arising as a result of the rapid technology evolution.
As a leading telecoms operator, we continue to remain vigilant while continuously updating and adapting our services and offerings, as well as our ways of working.
This was demonstrated by Ooredoo's high preparedness to manage the impact of a shock like the global COVID-19 pandemic. Through the strong foundations we have built over time, we were able to respond quickly and introduce new digital services to ensure people stayed connected and engaged throughout a very turbulent period. In particular, Ooredoo's networks provided a vital lifeline for organisations that required employees to work remotely, which ensured business continuity and helped build economic resilience.
Today, we are contributing to the economic recovery of the markets we operate in, thanks to these same strong foundations and ever-growing agility.
Our focus for the next period will be on forging new partnerships and strengthening existing ones with key players to continue to offer our customers the latest products and services.
A key area of focus here is building leading digital services. We are always exploring new, previously unaddressed areas, to make it easier for our customers to find, buy and use our products online. Ooredoo's activities are converging on a digital-first ecosystem, which will become integral in our customer' daily interactions.
A few examples of what we were able to achieve so far include our partnerships with top fintech players Mastercard and VISA; premium entertainment services providers Netflix, Disney+, HBO, beIN and OSN; gaming leaders such as PUBG, FreeFire and Quest; music providers like Anghami and Spotify; and Direct Carrier Billing partnerships with Google, Apple and Huawei.
Ooredoo has welcomed its first female CEO in Oman. How can this be empowering to women in the ICT sector and in general?
The appointment of Noor Al Sulaiti as the CEO of Ooredoo Oman can and should inspire women across the sector. I have to add here that this event was preceded by the appointment of two female colleagues in key positions. Fatima Sultan Al-Kuwari was appointed as Group Chief Human Resources Officer and Eman Al Khater as Chief human Resources Officer in Ooredoo Qatar.
Ooredoo has a firm commitment to recruit, train and develop the next generation of talent from within the organisation and the markets in which we operate.
Selection of this talent is based on merit, and it’s great to see that many young leaders, male and female, have stepped up and delivered during the most difficult times. We will continue to invest in them and push their careers forward.
Numerous women are now coming through the industry and being appointed in C-suite roles. This will translate into a new generation of company leaders, committed to bringing about real change across the sector as a whole.