Mobily: exclusive interview with Ahmed Farroukh

Our focus in investment will definitely be on 4G. It will take almost two years of testing for 5G to see the light. For us, LTE will be our main investment.

Interview with Ahmed Farroukh, CEO of Mobily

Ahmed Farroukh, CEO of Mobily

First of all, can you give us a better understanding of the digital ecosystem in Saudi Arabia and how are you going to capitalize on the opportunities in the market?
Saudi Arabia is a unique market by itself because it has its own characteristics. It is one of the biggest markets in the world from the perspective of data consumers. The digital era is utilized well in the Kingdom. We rank number one in the clicks of the YouTube and other social media by users in the country. However, for this to take place, we need an appropriate infrastructure. Digitalization is the future and there is no doubt about it. Still, we need to be ready, to simplify it and to lead into that.

Currently, unfortunately, we are not on that level, but in future Mobily will definitely be leading into the space. To be digital we need to have the platform to be really digital and to put the content to make the digital journey for the consumer who is going to embrace it, quite nice as well.

What are the latest market trends in Saudi Arabia and what will the future be like: is it connectivity or communication? And how will you respond to these changes?

The balance is changing all the time. First, it was the voice era and this was the good old days. The second one will, definitely, be that of the data era. The prices used to be 90/10 or 95/5. We can see gradually that it is basically shifting toward data. Voice is going to be a commodity from the past. We at Telcos and Mobily, specifically, have set all our future plans into the digital era. We will try to reproduce for our shareholders what we have lost in voice whatever comes from the different angles of the digital and the monetizing of our operations. 

How about the other areas like FTTH, Broadband, and 4G?

One of the things that we did in almost two years in Saudi Arabia is that we were the first to do the Fibre to the home. This is revolutionary because the infrastructure was not there. Mobily is reaching every home through the Fibre to provide the best experience. When Fibre reaches home it becomes multimedia in terms of the content and the internet connectivity you can provide and the voice that you can give in future.

Can you talk about the infrastructure improvements and the technologies? I understand that the FTTH is now available in 0.8 medium homes. So what are the investments in this field?

The FTTH is facing some difficulties in expanding due to regulatory issues, as it is the case in Riyadh where we cannot dig anymore. However, the main issue revolves around the speed. You don’t want for a video on YouTube that is a few seconds long to take several minutes to download. So, what we are trying to do now is to move into LTE technology where we can really deliver the speed that is needed for our customers so that experience can be enhanced. Investment now is going towards enhancing a digital future at a very reasonable price and quality. Quality has to be superior at the best pricing.

So, your future plans is to focus more on 4G technology?

Our focus in investment will definitely be on 4G. It will take almost two years of testing for 5G to see the light. For us, LTE will be our main investment.

Branding is a key success in telecommunication industry. So, what are your key branding exercises that you intend to do?
Branding is about brand visibility. This brand has brought a theme of innovation across the year. We want from the digital brand to live the life of our subscribers. This is very essential because we are becoming an integral part of the daily life of our subscribers every time they click on it because we provide it. In the future, we hope to add more content for them to use from our side.

What is your main strategy over the next few years in terms of market share, profitability and financial issues?

It is known that we had some difficulties in 2014 and 2015. However, we are now out of the recovery zone and heading forward. First of all, we need to have the appropriate infrastructure and the investment to utilize and get the appropriate return for our shareholders. We need to increase our market share, which can only be done by perfecting the customer experience and the journey of our subscribers. This journey has to be a digital one. Otherwise, we will not come into terms with a country where youth is above 50% of its population and who are highly independent and use data at the highest rates in the world.

Do you feel that Mobily is an appealing option for investors with the current market capitalization?

From a government viewpoint, I cannot promote the share of the price. Mobily had its own small ditch, but we are over it now and the future will definitely be ours. The market regulations in Saudi Arabia are always under review for improvement. I am also sure that foreign investors will be able to invest in our stock market and Mobily is going to be a winning option.

You mentioned some of your strategies, but your competitors have their own strategies as well. How do you really differentiate yourself from other competitors? What is Mobily intending to do? Can you compare your strategy with those of your competitors?

When Mobily came to the market after almost ten years from the mobility era, it was able to distinguish itself as a brand and a company. As a result, we have hit 16-17 million subscribers whether in data, or data and voice. Each company has its own strategy. Our strategy will be to enhance and touch on the lifestyle and life pattern of our subscribers. This is done by providing more centres to our customers and a perfect customer experience. This is the only differentiation we can bring. Everyone can invest and use technology. What matters is how this technology is used and how you can get the best result from it.

What is your overall assessment of Saudi telecom industry and what is the outlook? Do you think the profitability will be decreased?

Saudi telecom industry is again a unique one. The good side, which is always the highest side, is that we have high rates of consumers per capita. It is a consuming society and the GDP is quite high here. The amount to be spent on telecom is very attractive. After several years, profitability needs to come at certain levels. Then, unless something different is done to manage and to consider new revenues, it will be difficult for the continuity and growth of the company. Concerning Mobily, we will continue with our digital transformation and digital journey. We will be able to maintain, if not increase, the same level in our profitability and returns. Each year we will sit and review things and I am sure if this is done we will reach good levels.

You are relatively fresh in the company, what are the three major challenges as a CEO and perhaps for the sector in general?

Like other sectors, this sector has its own challenges and it needs some frequent corrections. Our challenges will remain in this huge amount of data usage and the lack of spectrum. So, we will keep pushing, discussing, and negotiating with our regulators on the release of more spectrum for our use. This is essential to our customer experience. I have been here for six months now, but these things will stay and we will be working on them. For me, I would love to continue the journey where we look at the three things. I can put Mobily under three parameters in random order: bring value for our shareholders, bring value for our subscribers, and value for our staff. By staff I also mean the community. We are quite aware of our social responsibility. We have a long list of what we believe as our social responsibility. We need to be part of this society as well. So these are the three pillars that I hope for achieving. 

You have been working all over the world. How is the Saudi market different from others?

It is a wonderful market, because the entire combination is quite phenomenal. There are no similar markets that use 1TB    per month. Many subscribers in this market use 1TB per month. So, the challenge is to understand the Saudi market, attend to its needs and hopefully, to be able to deliver all that.

What are the specific policies that are followed to avoid government issues or financial problem in the future?

The Executive Committee and I have set some rules of governance and made sure that the company is working in accordance with these rules. What happened to Mobily, can really happen to any other company. We need to understand that. The most important thing is that we learn from our mistakes so that we avoid making them in the future.

Can you speak a little about your distribution channels, and how are you different in this respect?

We are inventing our distribution. We want to go more into the electronic era of the processing in our distribution without reporters. We will be doing it on a digital basis and we have our partners getting together. Distribution is a very important aspect of our business. If we have enough will and the value proposition, then this product need to reach our subscribers and different distribution channels are there. We are doing our best to reach an electronic distribution and to be on a wireless distribution in order to reflect this digital era. And we are discussing this with our partners.

What will be some of the innovations on the product side?

They will cease to be innovations if I disclose them. However, a lot is expected from Mobily and from its CEO. I hope I will be able to put this philosophy into practice. We would like to give our subscribers complete freedom to choose what they want and what suit them at the prices they can afford. It is an ambition that I will follow that our subscribers be able to decide how much data and voice they want to consume for a month, the international calls they want to make, and the contents they want to buy. So, at the end of the day I will be able to have a value proposition that suits every subscriber we have.

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