The Middle East Interview: Dr Saad Al Barrak

By Smith, Pamela Ann | The Middle East, July 2009 | Go to article overview

The Middle East Interview: Dr Saad Al Barrak


Smith, Pamela Ann, The Middle East


Since his appointment as Deputy Chairman and Managing Director (CEO) in 2002, Dr Saad Al Barrak has transformed Kuwait's Mobile Telecommunications Company (MTC) into one of the leading telecoms companies in the Middle East and Africa. Now known by its new brand name "Zain", he hopes to take it into the world's top 10 by 2011. Given Al Barrak's past successes, together with an acquisitions budget of $5bn, this lofty ambition may just be achievable, industry sources say.

During his short tenure, the company's overall market capitalisation has grown to $16.5bn, up from just $2.5bn in 2002, while its active customer base has grown from 600,000 to more than 64.7m, covering 24 countries. At the end of March, Zain's group revenues totalled 567m Kuwaiti dinars ($1.96bn), up 25% over the first quarter of 2008. Net income increased by 3% to 75.5m Kuwaiti dinars ($260.5m) despite the global economic slowdown and intense competition in world markets.

In this exclusive interview with contributing writer Pamela Ann Smith, Al Barrak talks about his plans for the future, his pride in the company's pioneering services--One Network and Zap--and his commitment to "business romance" and social responsibility.

You are aiming to become one of the top 10 mobile operators in the world by 2011. Do you think you can achieve this goal in the current economic climate?

Zain is under no illusions about the severity of the financial crisis, but we are more [determined] than ever to achieve our 2011 goal of becoming one of the top 10 mobile operators with 150m active customers.

We aim to achieve in nine years what other companies have taken 27 years to achieve by accelerating growth in Africa, consolidating our assets and expanding into adjacent markets.

In May, Zain announced an additional programme to further propel the company towards its global top 10 2011 target. Drivell will focus on customer services and commercial activities while centralising, or outsourcing, some back office/non-core functions to strategic partners. This programme will maximise economies of scale and realise significant efficiencies, allowing Zain to provide communication services such as voice, [text] and data at an optimum cost structure.

Drivell is expected to improve Zain's operating margin by 5% within 12 months. The Group will also align its head office and operations in accordance with the new operating model, enabling Zain to reduce its current 15,500 global workforce by 2,000, or 13%.

We will create genuine market differentiation through our services and deliver on our Zain brand promise of 'A wonderful world'. We will combine our managed outsourcing, centralisation and leveraging capabilities, as well as training and development for our personnel.

Do you still expect to increase profits by 30% this year?

Due to global economic conditions, Zain is lowering its net profit growth target for this year to 20%. However, Zain has invested heavily in network expansion on both continents, resulting in robust customer acquisition and healthy revenues. We expect to reap further financial rewards from these investments in the second half of 2009.

[ILLUSTRATION OMITTED]

You were formerly known as the Mobile Telecommunications Company. Why did you decide to rebrand your operations under the Zain name? Has this helped you to grow?

Mobile Telecommunications Company (MTC) was the first mobile telecommunications company in the Middle East when it started its operations in Kuwait back in 1983. The rebranding of all of our operations is fundamentally important to our overall business plan that was launched in 2003, when we agreed a strategy to triple growth every three years across a number of parameters such as customer numbers, operational businesses and geographic footprint. This vision aimed to achieve a global position in just nine years, whereas it had taken several decades for the world's leading companies to achieve this status. …

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