Top Internet Service Provider in Egypt: Link (Mobinil Group)

Interview with Waseem Arsany, CEO of Link (Mobinil Group), Egypt

Can you give your personal evaluation or general overview of the internet sector?

The industry is a great plus to the Egyptian community, Link is the first private / ISP in Egypt; we started in 1992 and were the first Egyptian portal that promoted tourism for Egypt, and we quickly evolved into the first ISP in Egypt (for many years). Then, the incumbent ISP was established around 2000, and started to grow their base and build their infrastructure – Telecom Egypt is the single infrastructure provider in Egypt. Currently, the government is very seriously studying [the option of] having a second infrastructure company that can complement what the current incumbent is doing, do faster deployments, and faster outreach in Egyptian infrastructure to provide current and future projects for businesses and consumers. This is a great enabler for the private sector to come back, and have a fair market share and positioning that the private sector is capable of reaching. Link was the first and biggest ISP in Egypt, but because of the incumbent and some old regulations that were not in favor of the private sector, the public sector / incumbent grew more and increased the base to 65%. We see the other 3-4 players in the market have only one-third of the market, but have the financial capabilities and expertise that can add more value to the ICT sector in Egypt. We’re looking forward to the new legislation that will take us back to where we can add more value to the community.

Is there a specific time frame for the legislation?

The legislation is already undergoing, we know that the government is working on the new telecom law [that has] changes to the previous one. The government launched a ‘universal license,’ where you can apply for a catalogue of licenses – some we found interesting and some we found were not economically feasible. We’re still in discussions with the regulatory authority and the MCIT, in enhancing the conditions of the new services and licenses in order to really be able to provide these services, if we found them to be economically beneficial. The time frame was announced to be the end of quarter for last year (Q4 2014), but I think with the change of (some parts of) cabinet that there was a push to Q2 2015.

Our target is to be the regional hub and host enterprise businesses and content providers (especially because Egypt is the biggest Arab content provider in the whole region), and be a disaster or back up recovery location for other big regional players.

What is your specific share within that 35%?

We have 22-23% market share because we’re still the biggest private ISP in Egypt by far and the rest are between 5-7% each.

If you could briefly mention or give examples of how you stand out from your competitors?

Our major strength has always been that we are a private company – we have more freedom to try new stuff. We hire the best calibers in Egypt, we have 1,200 employees who are all experts in their areas, and we are always open to trying new technology. We’re not after the fast returns. Egypt is a growing market and we have close to 90 million inhabitants on land, in addition to those working in other countries, so it’s a big market. The geographical location of Egypt is a great plus for everyone who wants to do business here, and we have the most moderate Arabic accent, which is globally understood across the Arab world (North Africa, Middle East, and GCC areas). This is a great enabler to host and export our expertise via human capital or our services. We want to extend our services beyond the boundaries of Egypt. For the ICT part in Egypt, it is a great plus to work here, and be able to invest more. This is proven by the continuous investments we are doing within the company as Link and for Mobinil via Orange (who now owns 99.1% of Mobinil).

You mentioned that you want to expand beyond the borders; do you want to grow in the region?

Not only the region, but we are also targeting big parts of Europe through our new outsource contact services product, which goes into our Mobinil’s new business opportunities. We introduce new products, dedicate funds for them, use human capital to generate more business for the company – starting from the home base in Egypt. Here, we have the human capital expertise and economically suitable conditions (cost of labor and accommodation are relatively low compared to Europe and GCC). We launched our new project, Mobinil Contact Services, at the end of last year and we have a very aggressive plan to offer outsource services for European companies and Arab, Middle East, and GCC areas.

Can you expand more on that specific product? What type of outsourcing do you propose?

We provide all the contact services, from marketing activities to social media handling to IT, which can be related to general services: accounting, legal advisory, and all kinds of BPO and IT services. We have the full portfolio planned, we started it already and have a couple of customers here and there, and so we’re very positive about this new project.

What are your other projects or plans for 2015?

We launched our two data center hosting services under our mother company Mobinil, one in Cairo and another one in Alexandria. The total investment was EGP 250 million ($32.7 million or €31.1 million) and we already have customers. Our target is to be the regional hub and host enterprise businesses and content providers (especially because Egypt is the biggest Arab content provider in the whole region), and be a disaster or back up recovery location for other big regional players. There are a lot of multinational players that have regional headquarters or big facilities in Egypt, and we want to host their services. Building on that, we want to provide communication, which is a great concept that we’ve been adapting since we started, as becoming a ‘one stop shop’ for all communication services given by a single provider. Mobinil complemented the whole picture for Link, and we are adding new layers to hosting and outsource services.

Do you think it would be possible to merge?

It’s not the intention of Mobinil or Link, the market should be in a different condition; looking at the regulations today this is technically and practically impossible, so we were very surprised by the idea. When you want to consolidate the market, you go from the highest point not the lowest point. Nor do I think that one of the players of the market have the ability to stand on consolidation of the market because it’s a huge investment, and with the conversion of the market now, everyone wants to complement the rest of the licenses. The trend of mobile operators buying ISPs in Egypt started 8-9 years ago, now the whole market is consolidated except for maybe very few players. I don’t think the idea would work, and it is not for discussion at Mobinil.

What are the different services that you provide?

We’re already providing connectivity, services, and products, and are focusing on the consumer part. Since we started, we worked with big corporations and global connectivity players that trusted our expertise and network for many years. After 2011, because of the economic conditions post-Revolution, we started investing in ‘hosted service and products’ and focusing on SMEs. It was very difficult for them at that time, so we started doing investments and offering our services on a rent- or lease-based to help companies engage. This also helped us financially and strategically, we helped with our human capital expertise and knowledge to spare the mess with startups or companies that are struggling to survive after the Revolution. That was a great help and we believed that we helped the Egyptian community, and the ICT sector in particular, which reflected in continuous double-digit growth for us in the past four years – during a time when it was not the case in the whole Egyptian economy. We saw an opportunity coming and we took it: building on a great chance of Mobinil and Link, and the human capital expertise that was investment in those companies over the years.

Regarding the service providers, you have a strong strategy towards Egypt and abroad. Do you think it has been a challenge because of how you are perceived by companies regarding the political situation and European perception?

It was a big challenge in 2011 up until now, but we see things moving positively. The new roadmap that was announced by president El-Sisi has been already fulfilled 2/3 steps, we believe that the department as communicated by the government will be within the Q2 area, which is also a great confirmation that the roadmap is fulfilled. We see a general positive attitude on the economy or investment part that started in the Egyptian forum that was held a few weeks ago. Senior executives from Orange Group and Mobinil attended this forum, and everyone was positive about the attitude and seriousness of the government and the solid projects that were offered. These feelings are backed-up by new legislation changes that the government is working on to invest in FDI, tax, and encouragement for investments to come to Egypt. This is great news for us, as well.

On the local market, we see that people are encouraged to invest more, so we started receiving requests and orders from the tourism sector (who are also optimistic about the present and future, which was not the case in the past three years). We also started to receive a lot requests for expansion in new areas and communities, which also says that people feel more secure in having investments or living in more remote areas. These signs are very positive to us today, to continue to encourage and put more investments. This has been reflected in the past month and a half, when Orange invested an additional €200 million to increase their stake in Mobinil to 99.1%. This is another confirmation that the French have more trust in us, and encourages us to open new projects in the country for facilities and human capital. Everyone is now [acting] positively towards these changes; of course there are some domestic issues that we need to deal with, but if you look closely at the whole world, it’s not a very stable world as we speak, and we’re trying to create more opportunities and give hope to people, the sector, and the whole country.

If you had a magic stick for the next 2-3 years, what would be your vision or dream?

I would hope for clearer, fairer, and equal opportunities for new telecom law with harsher regulations on all the players. When you have solid regulations, then you can work towards focusing on having equal opportunities for customers. The magical stick would also have a new infrastructure company where part of Egypt’s issues would be to secure additional infrastructure in the country and stabilize the power issues that we have. This would enable me to really be able to market new products – the outsourcing services and data center services – that require regional customers to come and trust that we can provide this service. These are the three main areas that I would hope would go right in the next 2-3 years.

FAIR USE POLICY
This material (including media content) may not be published, broadcasted, rewritten, or redistributed. However, linking directly to the page (including the source, i.e. Marcopolis.net) is permitted and encouraged.