Mena Telecom: Future of Internet Services in Bahrain

Interview with Dr. Laith Sadiq, CEO of MENA Telecom

What is the strategy of Mena to achieve further growth in the sector?

We are fortunate because we have a very large spectrum and we have developed a network as such where we move to what they call 10 megahertz carriers; this allows us to deliver a large volume of data to our customers. In perspective we are delivering these large volumes to our customers should they be corporates or individuals through the fiber  network we should be able then to deliver the very high volume data through the fiber network. So we work depending on what is the best broadband technology that can deliver that volume.

Can you speak a little bit more about LTE?

LTE is an important technology for us because it is first of all a global standard, meaning it will be widely available by a lot of vendors. It allows us then to increase the speeds we can offer customers, increase the amount of downloads they can get, increase the user experience when you browse because this is getting more and more important, and open up new services for us. So this is something we are seriously looking into and it is something we are going to end up doing over the next 2 or 3 years to keep enhancing our services.

The Bahrain is probably the most competitive market for ICT how do you compete?

First of all, the mobile operators are still profitable. The market reached 130% penetration so it’s difficult with the new entrance to keep making the profits they were making before. So from the mobile operators’ perspective this is difficult because most of what they sell is voice and the broadband network is not designed to deliver data in a cost efficient manner.

You can deliver it, but to make a profit is very difficult for the mobile operators, until LTE comes along. For us, we are already on a fourth generation technology, we already have a very large spectrum, so that reduces the costs for us in delivering, and offers a better user experience. From my perspective, we are very comfortable with this environment, and as I said, the penetration is still 20% so there is a long way to go.

The market is competitive, but the competitive advantage we have will get us through this period because we are still number 2 here, we are still growing, and we will probably get where BatelCo is, in terms of broadband, very soon, and our intention is to be the market leader in broadband.

We talked about your subscription base, it is somewhere around 100,000 subscribers?

65,000 subscribers.

These 65,000 are companies as well as individuals, as you offer different types of products. What is the future of the business clientele for Mena? Is that something you would like to develop in the future and focus on?

Yes, we do have a large client base, banks, and companies in Bahrain, so we start at the beginning of our focus at the beginning, which was the consumer side, then we shifted to increase our portfolio which include businesses. Now we offer the IPOC services, the MPLS services, which offer broadband services to multi-national companies, as well as lease-line services, as they call them, which is really offering dedicated internet service to businesses.

We have entered the business segment, we have a very extensive support network here in terms of supporting the businesses and making sure they get the best services in terms of internet, and broadband services generally. And we will continue on that, and continue to expand our portfolio in that area in order to expand the market we can serve.

What has been the feedback of business clientele using Mean vis-à-vis other service providers?

Well the advantage we offer, as opposed to the other operators in Bahrain, is that most of the other operators are either Batelco, or reselling Batelco network, but we have brought a completely independent network from Batelco.

If an operator or a bank wants a resilient network from an independent operator, we have that, as well as international roots. The first thing we bring to banks and companies is to de-risk the communication requirements because now they have separate networks they can deal with.

We are much more flexible in the way we serve them. We have the 24/7 service support, we have dedicated business support, and our prices have been a lot more flexible than Batelco. We brought competition to the market where it gave the companies a choice in which company serves them better and how to reduce their costs and risks as well.

But you are still not the leading provider, so what will it take to get there?

Well the business market is not as easy as the consumer. The consumer market is very low penetration. When we started the penetration was 7 or 8% in Bahrain, so it is easy just to get into the market.

Businesses tend to have communication equipment already in, so a lot of it is “Do they really want to change?” Although there is a lot of growth from new business, and we have been getting these businesses easily, to change the existing businesses is a lot more work because they are normally engaged in long term contracts, they need to be sure that we are an established company that can give them good service before they make a decision about changing, and the cycle of decision is a lot longer.

For example, for most consumers, the cycle of decision can last a few weeks or months before a decision is reached, but for corporate clients it can take years before they make a decision to change providers.

Mena would like to focus on individual and corporate customer because the individual consumers tend to be the volume you need, and that’s where the growth is, and the businesses tend to be the high margin of business you want to be in. Really you want to have a blend of both. One gives you the margin you need and the other gives you the scale you need to be successful.

You mention that you were easily able to capture the new businesses, is that correct?

For new businesses, yes. Especially with SME’s and new companies in Bahrain, we had a very good success rate. It is easier for them, the cycle of decision is much shorter and so it is easy for them to decide.

For an existing business to change their communication is a lot more difficult. You have to change numbers; you might have to change your IP addresses, and these kinds of things you don’t take lightly. What they tend to do is not move immediately, but get 1 or 2 services and once they see that you are a good provider, they can give you more. So that takes 2 or 3 years before you can make big tractions in the high end corporate market.

Hopefully by next year we could see more established businesses changing their provider to Mena?

Absolutely. We already have very large banks in our portfolio for providing services and this is increasing all the time.

What does Mena think of its social role in the development of Bahrain?

What Mena Telecom brought to Bahrain, for example, we first made broadband a lot more affordable. If you think broadband is a good social need, we certainly have done a lot because broadband for Bahrain has been essential.

If you look at the residential market for people using broadband, it has become essential for every day life and is important for people to maintain they everyday life style. For businesses it is even more important. What we have done is brought competition to the market and more services, making Bahrain more attractive for businesses to come, and once you have very competitive communication services, the prices tend to be attractive, and the services tend to improve.

Since we have come in we have introduced a lot of new services of high speed and higher flexibility to the consumers and the businesses here, and that contributed a great deal to making Bahrain a more attractive place for investors and improving services for the population.

Can you tell us about your dream, your long-term strategy?

 In 5 years time, one of the key things that is going to happen for example is that the multi-media will completely change. Right now most of the media is through TV, radio, webcasts, and this is going to change. Most TVs will become internet TV.

Most movies and HD entertainment like sports and programs will come through the internet and will be delivered by companies like us. The people who will control these will be coming from the same companies that deliver now, or completely different companies who are delivering these services. You will be in control of what you are getting, you will be downloading programs. And boycotts will be used less and less especially if you look at people between 15 and 30; TV does not play as big a role as before, so we think that most of the multimedia will be delivered through internet television and through computers as well as other devices like the iPad and smart phones, and all of this will come through companies like us and the role we are going to play of course is first, delivering good customer service and secondly, coping with this high volume of traffic and how we are going to deliver the volume to customers.

I think that in 5 years time, this whole thing is going to change all over again and you are going to look back at this year and say “How did people live this way? We could not have coped.” Just like today we look back before smart phones and ask ourselves how we lived without colored screens and SMS and web browsing and other mobile services.

It is going to be the same, its going to be a lot richer delivery of content, it will probably be 3D, and it is going to be quite a challenge for us to make sure we can satisfy all of this demand.

As a newly established company relative to the competitors, I think it will be a lot easier for you to change for existing trends to integrate them into you.

Absolutely. We have gained a lot of experience in the past few years of how to deliver. We are putting more and more capabilities, for example we are going to partner with Google to bring Google servers down here.

We deliver the services from here without having to bring them all the way from the US and we are going to be able to deploy a lot of technologies which will make it easier to deliver this kind of content to our customers, and as this content requirement increases, like how will we deliver the “Last Mile” access and how do we get it internationally aggregated, all of this requires newer technologies and ways of doing things, and in 5 years time, this will look completely different.

Is it a challenge to explain to the people exactly what it is they are getting and what sort of services you are offering?

Yes but it is getting easier because if I look at my children and people who are below thirty, all people part of the internet generation, it is not so difficult. If you split the population into two halves, with people above 40, yes it is difficult and it is all about simplicity and how do you make it simple enough for them to be able to get these services, and this will continue to be a challenge because things are getting more complicated.

But what we did for example, all the devices that we have and deliver are “plug and play”. You do not have to do a lot of changes and you don’t have to worry about how to configure them. Everything comes pre-configured and you can get it up and running right away.

Things will continue to get more complicated, but the key is the software that comes with it and making sure that software is easy for the customer to use without having to worry about what lies behind it. And in our call center, a lot of the calls we get are simple technological issues. For example the wifi password, some people were having trouble with it, and it is important because you want your security on your wifi.

We introduced the wireless product that allows you to have wireless internet but we also want people to understand the importance of securing your wifi, and for a lot of people that was not easy to learn and we got a lot of calls at the call center about it. So simple wifi password changes.

So this will continue, and what we do with our vendors is we give them the feedback in terms of how to make things a lot simpler, so now all the devices we have will have for example a default password, and very simple directions on how to change it, or we can take them through it step by step to eliminate the initial complexity, and once they use it they tend to be very stable.