Ross Cormack is the CEO of Nawras, Oman’s first privately owned telecommunications company. He spoke with The Prospect Group about the ICT sector’s contribution to the overall development of Oman, Nawras’s plans for growth and expansion, and the key challenges that the industry is currently facing.
What new initiatives is Nawras currently involved in?
CORMACK: Nawras is involved in a number of key initiatives. One of the most important is our customer experience program. This is not just a phrase. It is an actual program of work that is huge. We have been out to analyze all of the different customer touch points of the company. This means the stores where people buy services, get services, meet our employees, call our contact center, and anywhere else they might come in contact with our company. We have analyzed what people are saying about us.
We have turned what they are saying about us into a 3-year program, which involves strategic initiatives that have to be taken. Another initiative that we are taking is deep user base segmentation. We have divided up our marketplace into how people use our services, where they use them, and what they use them for. We have determined a number of segments and we have started to package our services to meet those segments needs. Most importantly, we are listening to what our customers are saying. We are turbo charging our network. We are making state of the art upgrades in terms of ability to deliver data or what customers call broadband. This is a huge program. We have already updated or replaced every single radio base station from the Al Bustan area in the Southeast right up to beyond Musana’ah of the Batinah coast. This involves many base stations. They have been completely changed out and every single one of them has been updated to 3G. We have also added a second 3G carrier on top of this to more than double the speed and capacity of our network. Furthermore, we have been building a 4G network. However, to customers, the technology is not as important as the service. It is actually measuring the customer experience through that access network that will be so important for the future.
What is the ICT sector’s overall contribution to Oman’s GDP? How do you see this progressing in the long term?
CORMACK: The ICT sector’s contribution to Oman’s GDP is approximately 6%. However, more important than GDP contribution is the enabling nature of the ICT sector. It contributes indirectly as an enabler to everybody else’s production of GDP. For example, the GMSA (Groupe Speciale Mobile Association) has stated that, with regards to telecommunications, every 10% increase in mobile penetration results in roughly a 0.8% increase in GDP. They have also analyzed broadband contribution and it is much larger. Every 10% increase in broadband penetration throughout a country results in an approximately 1.6% increase in GDP. It is a huge enabling factor for the economy. Part of His Majesty’s Vision 2020 for the country is to develop areas outside of natural resources, which still contribute a large percentage to Oman’s GDP. Nevertheless, the government has been creating initiatives across various sectors. There has been a tremendous push in all of these different areas. The government has started to focus on SMEs, the small and medium enterprises. They have realized that fostering initiatives in this area can create huge employment. We have seen in many other countries the importance of the SME sector to the whole economy. SMEs play a huge part in the growth of the economy. Nawras is doing our part to support this. We are supporting the government’s initiatives but we also play our own part in helping to create SMEs. We have created independent distribution in telecommunications. This means that when you travel along the highways to the villages and towns of the interior or to Salalah, you will see many dealers labeled Nawras. These dealers are not actually owned by Nawras. We supply them with services and, in turn, those dealers sell to the local population. In a way we have managed to grow the importance of telecommunications in people’s lives. It is very important to bring telecommunications to where people live. This is giving people huge opportunities for jobs and value creation in their own neighbourhoods. So, if only 3 people are employed by each of those and we have roughly 1,000-1,500 dealers around the country, you can see that is a big workforce multiplier in itself. In addition, we have 15,000 locations where you can buy recharge cards and vouchers. That is another area of growth for employment. These products and services that we are bringing now to the market help supports SMEs.
How would you describe Oman’s technological readiness vis-à-vis other countries throughout the region such as Saudi Arabia, the UAE, and Qatar?
CORMACK: Nawras is a subsidiary of Qatar Telecoms or Qtel. We have a direct reference with our mother company and our sister operating company in that country. The demographics are different and it has a smaller population but overall their GDP is much higher. If you were to compare Oman with other countries throughout the region, than you would have to take into consideration their GDPs. Again, if you look at Saudi Arabia, their GDP is much higher than Oman. As a result, you would expect to see further developments in those markets. However, I am proud to say that if you look at the technology currently available in Oman, it is every bit as good as the other countries throughout the region.
HE Dr. Ahmed bin Mohammed al Futaisi, Minister of Transport and Communications, stated that 60% of Oman should have access to broadband services by 2017. What key challenges is the country currently facing with regards to expanding its broadband network? What role is Nawras playing in addressing these challenges?
CORMACK: The real challenge for broadband development in the country is overcoming Oman’s shape and topography. There are huge mountains throughout the country, which present problems by themselves. To get over those mountains it takes two hops and a microwave. In other words, it is an expensive thing to do and you need power where your base stations are, as well as connectivity to get the signals back. When we first launched our fixed network in 2010, we already covered nearly 80% of households with a broadband offering. Our voice coverage in Oman is 97%. Every single one of those base stations will be 3G capable by the end of 2015 and most likely before that. This means that 97% of the population will be able to enjoy broadband. This is how Nawras will play its part in bringing that challenge to reality. We are looking forward to it.
Which segments or niches within the ICT sector present the best opportunities for growth and development? How do you see this progressing in the long-term?
CORMACK: Oman has a very young population. Roughly half of the country’s population is 20 years old or younger. They will become customers very soon if they are not already. In fact, Nawras has quite a high penetration in the youth segment. We have a special youth brand called Shababiah. It has been tremendously successful in bringing relevant community based communications to the youth. However, there is also a lot more that we can do. We are focusing on the youth because they are very important in the market. There are many other opportunities for growth. The government has implemented new initiatives to help spur the growth of SMEs. This is a really important segment for growth. We have products and services that are geared towards the SME sector. We will be focusing an awful lot more there. In terms of corporate business, they usually have a very heavy need for international communications. As a result, we have done a deal with Tata Communications of India. This deal gives us direct connectivity for international MPLS. We now have guaranteed levels of services to 80 countries directly and to 120 countries indirectly. We have a total global VPN network for those corporations as well. There is a lot going on in terms of development and we have the products and services for those different segments.
What are your future growth and expansion plans? How do you see the Nawras Brand evolving over the next 2-5 years?
CORMACK: The customer experience is a continual improvement program. It is based on what people tell us and on our initiatives to support how they would like for us to build the company. It is how we started the company in the first place. We didn’t do anything clever, we just asked customers what they wanted and then delivered it to them. It is an improvement based on that philosophy. We have this huge technological build that is going on at the moment, which we call turbocharging the network. We will soon be launching the highest speed services using 4G technologies. We will also be replacing every single base station in the country. We have already replaced several hundred in the greater Muscat Governorate and the Batinah coast. We will be moving around the country to modernize and replace every single base station and deliver broadband to a place near you. As you can see, these are tremendously large programs. The turbo charging program alone employs 650 people every day of the year. You can see the scale of what we are getting involved in. Nawras has always stood for customer experience. We have had 24/7 customer services since the beginning. We get great young people to work together as a family. They all understand and are convinced that customers matter. Therefore, they can easily work together. We have nearly 90% Omanization and I think that is one of the secrets to our success. I think the brand will continue to evolve. It will continue to stand for the customer experience and I really want us to be the coolest telecommunication company in the region.
How has Omanization impacted the ICT sector? What actions is Nawras taking in order to ensure that the skill set of local workers is on par with what is being demanded from the industry?
CORMACK: When Nawras started, we only had 250 people. 235 of those people had never worked in a mobile company before. Now we have grown to over 1,000 individuals who are directly employed by the Nawras family. They are now all telecommunication experts. The great thing is that we were able to find really bright young Omanis when we first started the company. We had 85% Omanization since day one when we switched on the service for customers in March 2005. I am happy to say we now have nearly 90% Omanization. I think it is our Omanization that has been the secret to our success. We have tried to train these young people and give them opportunities. It is very important for them to have on the job training. In fact, that is almost the most important thing. You also need vocational training to ensure that technologists or engineers are kept up to date in areas they do not know about. It has been beneficial to have someone who has done it before or a team leader from another market that has faced similar challenges. It can give you a tremendous amount of training. This has gone on consistently throughout the history of the company. In fact, people who started at relatively junior levels have joined me on the management team. They have been promoted through these 8 years right to the top of the company and they are all Omanis. However, it is very important to have an international element to a company such as ours because we have to stay in touch with the general trends. We have a constant percentage of 10% employed from maybe 25 or 35 nations. Some of them will be changing because there will be subject matter experts coming in to train people on a certain area. A significant portion of the rest is permanent staff members working together with our international team. I am thrilled with that. Finally, we are part of the Qtel Group and that gives us 17 other siblings to compare best practices with. We rotate our people through meetings and conferences and get them work experience in some of those other companies. It is great for young Omanis to be able to have this window to the world and when they come back they have new ideas for us.
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