This is an era of rapidly changing market conditions, shaped by new, often-disruptive technologies and business models, according to Peter Kaliaropoulos, Chief Executive of Batelco, Bahrain's leading integrated telecommunications provider, with operations across the Middle East.
He believes that the region’s telecoms providers must embrace such change across their organisation if they are to keep customer loyalty and sustain profitability.
“The hard facts are that companies of all capabilities and sizes must embrace the strategic opportunities that change offers to ensure sustainable success.
“The newly-deregulated telecoms sector (in Bahrain, Jordan, UAE and Qatar) will continue to undergo fundamental changes. We must understand the potentially disruptive impact to existing operators, the new competitive landscape, the opportunity for growth through new scale and scope strategies, and take a long hard look at revenue steams and cost management.”
He said that telco-management must shift from ‘pushing products’ to ‘marketing benefits’ across different customer segments to ensure that customers remain loyal in a competitive market place.
"We need to re-invent our operating models to deliver to the demands of the ‘new era’ customer while ensuring that we maintain market leadership in the face of economic shifts and changes.
“In the telecommunications sector across the Middle East, the current key change influencers – and opportunity drivers – include deregulation, technology convergence, entrepreneurial competition and customer lifestyle expectations,” he suggested.
Turning to current performance, Batelco recently announced a half year net profit of BD 52.3m (US$ 139 million), a 10.2% increase over the first six months of last year. Gross revenues grew to BD 136.4 m (US$ 362), whilst net revenues grew by 25% over the same period of 2006.
“This strong set of results was delivered from Batelco’s regional growth strategy while keeping in touch with Bahrain’s customer’ requirements for better products, genuine service and more affordable prices,” said Mr. Kaliaropoulos.
Batelco embarked on a niche growth strategy across the region acquiring operators and new licenses to deliver mobility and broadband services.
In 2006, Batelco acquired 96% of Umniah, the third Jordanian GSM mobile operator and Batelco has become one of the first few foreign investors in the Yemeni market with its 20% shareholding of SabaFon, the country’s largest GSM mobile operator. Batelco also has ventures in Egypt and Kuwait and in March 2007, Batelco, as part of a consortium, won one of three new, fixed services licences in Saudi Arabia.
“Growth in Bahrain’s retail operations was 2% versus the same period last year as a result of price erosion and market share loss. Meanwhile, just as we expected, operations in Kuwait, Jordan, Egypt and Yemen contributed 28% of our revenues,” stated Mr. Kaliaropoulos.
“We have more than 30,000 broadband customers in Jordan and Kuwait, in addition to 815,000 mobile customers from Umniah, Jordan and 1.6 million customers from Sabafon, Yemen.”
In Bahrain, deregulation is forcing Batelco to review both its operating model and the levels of investment in new infrastructure, according to Mr. Kaliaropoulos.
"If the TRA (Telecommunications Regulatory Authority) is going to limit commercial returns for new infrastructure investments and not address loss making local access services and rebalancing tariffs, Batelco will continue to invest in infrastructure but be more selective on projects," he said.
"Competition is something that we have embraced for some years now - and against formidable companies such as MTC-Vodafone. We also compete in markets outside Bahrain against very established operators. The fundamental debate with the TRA is not one of competition but one of proportionate regulation for the size of the (Bahraini) market.”
Mr. Kaliaropoulos confirmed that Batelco remains focused on improving customers’ telecommunications experience in Bahrain through the on-going implementation of enhanced services and latest technologies. Batelco has been at the forefront of the Kingdom’s telecommunications sector for more than 26 years and has invested more than BD 528 million (US$1.4 billion) in Bahrain’s telecoms infrastructure during that time, ensuring the provision of world-class services for consumers, businesses and new entrants to market. Today, Batelco provides fixed line access and broadband services to the majority of Bahrain’s homes and businesses.
“Our mobile customer base has grown to a record 643,000 customers. Similarly over 58,000 customers, another record figure, are using Batelco’s broadband services. The total number of telephone lines has grown to 201,000 at the end of June.”
“Subject to the TRA decisions, we plan to continue investing in Bahrain’s infrastructure for high speed data services and expansion of the fixed network infrastructure to new locations across the Kingdom.”
Looking at customer expectations specifically, Mr. Kaliaropoulos said that a recent market survey by Batelco confirmed that the consumer, both individual and corporate, is looking for better overall value including lower prices and, reliable and responsive service experience.
He said that this is driven by a desire to be e-competitive and includes a strive for greater efficiency and speed of service delivery, responsive rectification of faults, consistency in answering service enquiries whether from a call centre or retail shops, easy to understand billing, new innovative services and a true customer care ethos and attitude from all employees at all times.
Mr. Kaliaropoulos noted that these findings are not unique to the region, or the telecoms sector, and are echoed by similar survey results from around the globe.
“Perhaps not surprisingly, market influencers and customer requirements have common factors across telecommunications companies in mature markets around the globe,” he said.
In Bahrain, Batelco has accelerated its efforts to create a knowledge based, IT driven e-commerce society unrivaled in the region, by introducing new broadband services and significantly lower prices.
He also shared that as Batelco is handling significant competition in existing and new markets and as it is expanding through acquisitions, the retention and attraction of talented professionals across all disciplines is something that keeps him and his executive team ‘awake at night’.
"We face competition in the market but we compete above all for the acquisition and retention of human capital," he said.
“Competition in the Kingdom's communications sector will continue to intensify. However, Batelco operates now in six competitive markets across the Middle East and customers in Bahrain and across the region will continue to experience better service, lower prices and greater choice from Batelco, whatever obstacles we face.
“However, while customer demands, technological evolution, regulatory policies, acquisitions and new partnerships are some of the forces re-shaping the telecommunications industry in the Middle East, I believe that long-term success is based on focusing on the a vital few priorities - passion for customers, support for our employees, adequate returns to our shareholders and contribution to the community we live in.
“We must rise to opportunities and change, and not be hindered by perceived challenges,” Mr. Kaliaropoulos concluded.
