Zain Jordan

Interview with Abdul Malik Al Jaber, CEO of Zain Jordan

What is your assessment of the Jordan ICT sector and what are the key opportunities and challenges we see on this market? 

Jordan’s telecommunications market is one of the most competitive in the region in terms of technological advances and is home to three GSM mobile service providers and a mobile penetration rate of 104%. The country is also ranked number one in terms of competitiveness and openness in the region..

The sector is also considered a backbone of the local economy with over 10% direct contribution to the local GDP and offers thousands of job opportunities. It also plays an essential role in providing an attractive environment for foreign investments that need strong infrastructure and up to date technology.

Fortunately, HM King Abdullah II views telecom as an economic and social enabler . As such, a lot of attention is being given to this sector, including setting up the proper regulatory framework, passing laws, and opening the market for investments. The leading investors in this sector are foreign, ranging from the Kuwaiti-owned telecom operator “Zain”, Umniah, which is owned by Bahrain, and Orange, owned by France, which is also an indication that the market is open and competitive. His Majesty has also instructed the government to push the internet penetration and allow Jordanians to have access to  internet. From her side, Her Majesty Queen Rania Al Abdullah has also helped boost internet penetration levels by    equipping schools with internet and introducing the E-curriculum.  This is to say that the whole mindset in the country is positive and friendly towards internet, which helps us very much.

 On our part, we continued to invest in building  our network and this year Zain Jordan is investing around 100 million JDs in our infrastructure because we see potential in the ICT sector here. It’s a promising and prosperous sector with major contributions to the local economic development.

Jordan mobile penetration now stands at around 104%. How much more differentiation can be offered to such a saturated market?

When penetration was below 100%, acquisition was the name of the game. Now it’s a different story. The differentiation has to be based on applications, services, and content. . It requires a change of mindset at both  operators and government levels. In Unfortunately, in Middle Eastern countries , the current model is still based on access, as opposed to content, which means that the prices of licenses are extremely high. In Europe, for example, the business model is based on content, with very minimal charge on access.  however, telecom operators are charged for the applications the use,   encouraging them to have the pipe delivered to the home without charging for the pipe. Therefore,  selling content, applications and value-added services makes a lot of sense, and I believe that there is a pressing need for that in Jordan. . As operators we have to take the lead and create some encouragement for the government to consider changing this model. At Zain, we are already focusing our efforts on content by offering  educational, entertaining, business, and financial content. This is the differentiator and what will attract customer loyalty, and we consider ourselves pioneers in this field.

Do you feel that the competition is still on the access-side of the business model?

Yes, which is unfortunate for the  country but luckily for us. As I mentioned before, this business model is very old and will lead to  a corrosion of revenues. Currently, we are the only company in Jordan that is seeing an increase in its ARPU and an increase in its revenues.

Competition in the market is intense; JTG was awarded 3G since August 2009 and services were launched in March 2010. What does this development do to the country?

Unfortunately,  3G serviecs were introduced into the local market quite late. This license should have been granted three years ago given that The world is now way beyond 3G.

 At Zain, we are installing a state of the art network – pre-LTE. There is no way you can have a content-based strategy or model without the right infrastructure, which must have the right speed for the user to have the proper experience, and a nation-wide coverage.

Can you give us an overview of your upcoming services?

We are currently in the process of deploying a pre-LTE infrastructure all over Jordan and have already signed with the government as well as international vendors who will finish the process by the end of this year. plan on having the network operational by Jab=nuary and the commercial launch by February. At the mment, the focus is one creating a large  store for applications ; a Zain Store, which will include education, business, and entertainment services targeting various customer segments. We are also launching the mobile payment system through which we will be offering mobile wallets: a virtual bank account for customers thorugh which they can performa financial transactions including  transferring cash making purchases or paying  bills,pay for filling their cars with gas,  all through their mobile handsets.  Wewill also be offering Cloud Computing and a number of other  value added services based on a content-based model.

What might be your major challenges?

With the local telecommunications market reaching saturation, we believe that maintaining what has been achieved so far is one of the most prominent challenges facing the sector.  The local market has been liberated and became open to competition, causing an increase in penetration as a result of a decline in the prices of these services.

Our role is to keep the balance between maintaining this percentage without increasing the burden on the customer. We also believe that the government must boost the industry’s growth by encouraging further investment in it and maintaining the right environment for its continuation and development. One way this could be achieved is by working on reducing the burden of high tax rates imposed on the telecommunications sector.

In our interview with them, Orange said they are the price-setters. Is this assertion correct?

We are not interested in engaging in a  price wars We don’t believe a price war is a right strategy and have decided not to follow this game.  and have made it clear that our strategy is focused on content.

How have the changes Zain has undergone on a group level affected Zain Jordan?

Zain Group has sold Africa and is now focused on the Middle East. The impact has been positive and enabled us to invest in the infrastructure and to consider expansion in the region. We are very much interested in the Syrian, Lebanese, and Palestinian markets. Expanding in the neighboring countries strengthens and empowers us in the market. The current status of the group is positive in giving us the appetite to seriously look at expansion.