Amman, Jordan, 4 – 7 December 2006 Strategic Management – Part II Forecasting Lecture 14

1 December 2006 ITU/BDT/ HRD Strategic Management / Forecasting Lecture 14 slide 1

Amman, Jordan, 4 – 7 December 2006

Strategic Management – Part IIForecasting

Lecture 14

Country Paper: Qatar


Qatar Telecom (Qtel)

• Current situation,Current situation,• Challenges for the incumbent operator Challenges for the incumbent operator

ahead of competition,ahead of competition,• Regulatory EnvironmentRegulatory Environment


• Country Profile• Qtel-Current Status• Challenges• Approaching Competition• Regulatory Framework

CONTENT


State of Qatar• Population : 840,000 (2006 Census)• Pop. Growth : 5% • GDP/capita : US$ 54,500 (2006)• GDP Growth : 7% (2005 est., EIU)• Member of WTO since 1996• Booming Economy

Country Profile


Qatar


Sole provider of public telecom services till 2013 (Law 13, 1998) New Telecom Law ended Qtel’s exclusivity right (Law 31,

2006) Privatized Jan 1999:

Government- 55% IPO-residents & GCC-45%

Services: Fixed telephony-national & international GSM Mobile- prepaid and postpaid Data services Internet- dialup, ADSL Cable TV Paging, PMR

Qatar Telecom- Qtel (1)


Employees : 1800 Penetration:

Fixed : 26% Mobile : 102% ADSL : 2.6% (2005)

ARPL : US$ 76 (2003) ARPU (blended): US$ 79 (2003)







Qatar Telecom- Qtel (3)Revenue Growth

0

500

1,000

1,500

2,000

2,500

3,000

2003 2004 2005

mQ

R Revenue

EBIDTA


Qatar Telecom- Qtel (4)Qtel’s Share Performance


Country committed to liberalization Regulator established in 2004, exclusivity right

ended 2006 Tarrifs going down Rapid population growth- influx of expats Customers expectations / requirements New technologies External expansion Booming economy Asian Games 2006 Geo-political situation

Challenges (1)


Customer Expectations

Challenges (2)


New Technologies 3G Mobile Triple Play WiMax Next Generation Networks (e.g.NGDLC) IP-based networks/Services

Challenges (3)


Booming Economy Large Gas & Petrochemical

Industries Huge constructions (Pearl, Lausil

City, Sport facilities, Towers, Complexes)

Large Corporate Customers: dozens of new universities, new medical city, ..

Qatar Foundation E-Government

Challenges (3)





Restructuring Program Rebalance Strategic Priorities Explore Competition Scenarios Work with the Regulator/Government

Preparing for Competition


Main Themes:Main Themes:

Create a Professional BusinessCreate a Professional Business Organizational redesign & internal /external recruiting Fundamentals for high performing team Qatar’s employer of choice Strong performance culture

Earn Customer LoyaltyEarn Customer Loyalty Better segmentation and pricing Superior quality of products and services Customers enjoy interacting with Qtel Regional recognition as a customer-oriented telco or utility

Preparing for Competition (1)Preparing for Competition (1)Restructuring Program-Q-Turn (2)Restructuring Program-Q-Turn (2)


Strengthen Financial StructureStrengthen Financial Structure Optimize equity structure and balance sheet Full utilization of assets Strong Qtel share

Capture Growth:Capture Growth: Push boundaries in Qatar & new markets Leader in reshaping regional telecom sector

Achieve first class Operational Efficiency:Achieve first class Operational Efficiency: Boost performance Re-engineer key processes Outperform in benchmarking effort Prepare for competitive pressure

Preparing for Competition (1)Preparing for Competition (1)Restructuring Program-Q-Turn (3)Restructuring Program-Q-Turn (3)


Preparing for Competition (1)New Structure (2003)

CEOCEO

BoardBoard

Group FinanceGroup Finance

Group Group CommunicationsCommunications

Group StrategyGroup Strategy

Group HRGroup HR

NetworkNetwork

Wireline Wireline ServicesServices

HRHRFinanceFinance

Special Special businessesbusinesses

General General servicesservices

HRHRFinanceFinance

Corporate Corporate wirelinewireline

Residential Residential wirelinewireline Accounting Accounting

servicesservicesPersonnel Personnel servicesservices

ITIT

Support Support servicesservices

Customer Customer service service supportsupport

MarketingMarketing

NetworkNetwork

SalesSales

HRHRFinanceFinance FinanceFinance HRHR

QCVQCV

Pay-phonesPay-phones

Yellow Yellow pagespages

Directory Directory assistanceassistanceMaritime Maritime

radio radio commscomms

Product Product mgmt.mgmt.

Building & Building & eng. serviceseng. services

Wireless Wireless ServicesServices


Preparing for Competition (2) Rebalance Strategic Priorities

BEFOREDegree of focus

• Financial performance

• Human Resources

• Customers

Approach in the base case

• Push financial performance as hard as possible

Maximum

• Make the investments necessary in people to maintain performance in a saturating market

• Do enough to get by – make enough improvements to minimise noise

Strategic Priorities


Preparing for Competition (2) Rebalance Strategic Priorities (Cont.)

AFTERDegree of focus

• Financial performance

• Human Resources

• Customers

Approach in the base case

• Push financial performance as hard as possible

Maximum

• Make the investments necessary in people to maintain performance in a saturating market

• Do enough to get by – make enough improvements to minimise noise

Strategic Priorities


The Regulator: The Supreme Council for Information and Communication Technology (ictQATAR), chaired by the Heir Apparent of Qatar

Established by Decree 36 of 2004, officially launched may 26, 2005 Mission:

Regulate ICT sector in Qatar Develop a national strategy for ICT Formulate ICT policies Coordinate all initiatives to achieve ICT strategic vision Create legal and regulatory environment Contribute to programs and studies related to ICT Follow-up, evaluate, measure & develop ICT sector Represent Qatar internationally

Over 150 initiatives identified

Regulatory Framework


ICT Initiatives: State of the art infrastructure:

Broad band for all, “Mobile Neighborhood QoS monitoring National Data Center

Innovation & capability building: ICT ventures ICT R&D Job market stimulation

Regulatory & Legal Framework: Telecom sector deregulation USO Cyberspace regulations

Sectoral programs: E-education E-health E-finance E-tourism and sport

Regulatory Framework (2)


3 models for ICT initiatives:

Owned Project – ictQATAR owns the initiative end-to-end and takes a project management approach

Sponsored Project – ictQATAR sponsors the initiative, but management is the responsibility of an independent steering committee with joint participation by the Council and the concerned ministry or government agency

Supported Project – ictQATAR supports the initiative with technical inputs and assistance as needed, but a ministry or government agency manages it



In a way close to Singapore model A regulator AND enabler Initiatives: Broad band for all, Connect Qatar, State of the art

infrastructure Qtel-ictQatar partnership:

Free trade Infrastructure QoS monitoring Frequency management Numbering Plan Sector modeling Liberalization approach


Documents

Amman, Jordan, 4 – 7 December 2006 Strategic Management – Part II Forecasting Lecture 14