The difficult operating year that 2009 was is likely to have a long-term positive effect on operators in emerging markets; teaching them how best to manage costs and streamline operations. For operators in the Middle East and Africa, 2009 proved to be a year in which top-line growth may have slowed or flattened somewhat, while with more cost efficient ways in which to deliver services, profit and margins continued to grow.

Etisalat for example reported group net profit of AED 8.84 billion (US$2.41 billion) for 2009, up 3.8 per cent from AED 8.51 billion in 2008. This sum included profit on the sale of shares in Saudi subsidiary Mobily of AED 892 million after federal royalty. Net revenues grew five per cent from AED 29.36 billion in 2008, to AED 30.83 billion last year.

“These results highlight that Etisalat has followed the correct strategy by following a selective policy in our international investments,” commented Mohammed Omran, chairman of Etisalat. “In this way, we have made use of the current financial environment to identify the brightest opportunities that have arisen as a result of this situation.”

Etisalat’s Saudi Arabia subsidiary Mobily reported net profit of SAR 3.014 billion (US $804 million) for 2009, up 44 per cent year-on-year. Annual gross revenues increased 21 per cent to SAR 13.058 billion.

Mobily attributed its strong EBITDA margin of 37.04 per cent to the growing contribution made from higher margin data revenues, high-spending post-paid subscribers and improved efficiencies.

Mobile broadband revenue based on HSPA technology increased 159 per cent from the previous year, while wholesale revenues represented by sales to third parties increased 470 per cent from 2008.

The operator counts over one million mobile broadband customers subscribed to high usage bundles and with an overall mobile data exchange exceeding 50 terabytes per day, has the busiest HSPA network in the world. Data revenues contributed 14 per cent to overall revenues in 2009, compared to nine per cent the previous year.

Mobily CEO Khalid Al Kaf presides over an operator that generates some of the highest mobile data usage per subscriber anywhere in the world

Mobily’s net profit for the fourth quarter amounted to SAR 1.052 billion, a 35 per cent increase from SAR 778 million year-on-year, and a 30.4 per cent increase from SAR 807 million quarter-on-quarter. During the year the operator
also refinanced a SAR 1.5 billion loan and raised a SAR 900 million loan to extend its infrastructure. Both of these financing packages were achieved in the face of constrained liquidity and financial institutions being risk-adverse.

Batelco Group, the company that Peter Kaliaropoulos has transformed in the past three years of his tenure as CEO recorded stellar results, achieving its highest ever annual net profit of BD105 million (US $278.5 million), on the back of record gross revenues across its seven operations of BD346.9 million. This represented a nine per cent increase year-on-year, with net revenues growing by eight per cent to BD268.7 million.

Group chairman Sheikh Hamad bin Abdulla Al Khalifa said the company’s strategy to offer a full range of  communication services to customers in Bahrain, as well as growing in its regional markets – Jordan, Egypt, Kuwait, Yemen, Saudi Arabia and India – were the company’s main success factors in 2009.

“We have maintained our market leadership in Bahrain, continued to grow across the Middle East region and got off to a successful start in India, despite the highest competitive intensity in every market in which we operate,” commented Sheikh Hamad.

Kaliaropoulos said the company managed its costs carefully and delivered record EBITDA of BD153 million. Batelco’s overseas operations contributed 31 per cent of gross revenues and 22 per cent of EBITDA, adding that all Batelco’s business operations delivered within business plan expectations for the year.

Batelco’s latest mobile venture, STel in India, launched at the beginning of December and has since garnered a subscriber base of 450,000 customers.

“We also launched, together with Atheeb, our new broadband and voice services in Saudi Arabia under the Go brand, the first company to offer very credible 4G services and challenge the incumbent operator,” Kaliaropoulos stated.

Batelco’s Jordan mobile operation Umniah had a market share year-end of 27 per cent, with 1.65 million GSM subscribers, 9,000 WiMAX customers and 9,000 ADSL lines.

However, Bahrain remains the most important market for the group. Active mobile subscribers reached 822,000, broadband crossed 85,000 customers and there were 200,000 fixed lines as of the end of 2009.

Looking at the wider emerging market landscape, Vodafone Group remains a good benchmark to estimate market conditions in wider regions. The operator reported revenues for the fourth quarter 2009 (third fiscal) increased by 10 per cent to £11.5 billion (US$18.37 billion). The company expects that adjusted operating profit for 2010 will be in the upper end of its forecast range and lifted its free cash flow range by £500 million after it said its cost cutting programme was on track.

Free cash flow increased by 15.6 per cent to £1.8 billion driven, in part, by Verizon Wireless dividends. Group net debt decreased by £2.3 billion in the quarter to £31.7 billion, reflecting free cash flow generated and a £600 million beneficial impact of exchange rate movements on non-sterling denominated debt.

“Service revenue trends have improved with continuing growth in our data and fixed line revenue,” commented Vittorio Colao, CEO of Vodafone Group. “Free cash flow guidance has been raised reflecting the impact of our cost and working capital reduction programmes. We are on track to deliver on our strategic priorities in the current financial year.”

The proportionate mobile customer base reached 333 million with 10.3 million net additions during the quarter.

Group data revenue exceeded £1 billion for the first time, up 17.7 per cent year-on-year, with increased take up of data-enabled smartphones across Europe where active data users now exceed 30 million. Data as a percentage of service revenue in Europe was just 11 per cent, increasing for the sixth consecutive quarter.

Vodafone Group CEO Vittorio Colao says the operator is on track to deliver on its strategic priorities in the current financial year

Fixed line revenue grew by 10 per cent to £862 million in the quarter with strong broadband customer growth; the European broadband customer base now exceeds five million. Revenue grew by 4.1 per cent in Germany, 22.3 per cent in Italy and 10.7 per cent in Spain.

Capital expenditure of £1.3 billion was at a similar level to the same quarter last year reflecting continued investment in Europe to support network quality and data growth and targeted lower investment in India consistent with previous guidance.

Vodafone country breakdown – other Africa and Central Europe:

Service revenue declined by 6.8 per cent as growth in Turkey was more than offset by revenue declines in other markets in the region. Turkey returned to growth in Q4 with service revenue increasing by 12.9 per cent driven by incoming mobile voice revenue and an improving trend in outgoing mobile voice revenue. Vodafone continues to be the market leader in mobile number portability, which contributed to a substantial increase in the contract customer base. Turkey continued to invest in improving both network quality and coverage and significantly expanded its distribution channels. In Romania, service revenue declined by 23.8 per cent, with voice revenue declining by 24.7 per cent as competition remained intense and new promotional deals resulted in lower effective pricing.

India:

Service revenue grew by 13.8 per cent, including a 6.9 percentage point benefit from the revenue stream generated by the network sharing joint venture Indus Towers. The growth rate was lower than the previous quarter primarily due to pressure on voice pricing in what is becoming an increasingly competitive market. The impact of the 51 per cent increase in average mobile customers was largely offset by lower effective prices. Indus Towers continued to show improved performance with tenancy rates up to an average of 1.7 operators per site.

Other Asia Pacific and Middle East:

Service revenue increased by 5.8 per cent driven primarily by the growth in Qatar and Egypt. Having launched services in July 2009 Qatar more than doubled its mobile customer base in the quarter to 354,000 customers at December 31, 2009, representing 22 per cent of the population. In Egypt service revenue increased by 2.7 per cent following an increase in the average mobile customer base and strong data revenue growth resulting from increased penetration of mobile Internet devices. These factors were partially offset by aggressive competition and pricing deregulation in the market. The group’s joint venture in Australia is performing well and delivering cost synergies in line with management’s expectations.

Vodacom:

Service revenue grew by 5.5 per cent with continued robust performance in South Africa offsetting service revenue declines in Tanzania and the Democratic Republic of Congo. Data revenue continued to increase strongly with growth of 36.1 per cent following increased penetration of mobile PC connectivity devices and mobile Internet usage. Customer growth in the South African market continued to be impacted by customer registration requirements. Service revenue declined in Tanzania and the Democratic Republic of Congo reflecting price reductions aimed at improving competitiveness in key markets and a challenging economy in the Democratic Republic of Congo.

During the remainder of his tenure Nhleko has agreed to particularly focus on achieving certain key objectives including facilitating a seamless transition once his successor has been appointed.

“I have given this decision very careful consideration. I feel it is the right time to secure the next generation of leadership for the group – and the right time for me personally to start thinking about the next phase of my career”, Nhleko said.

The integration and seamless operation of devices and applications as new generations of mobile technology are developed and deployed has been one of the industry’s weakest areas, with issues arising from device availability and compatibility, through to a dearth of relevant content and applications blighting the introduction of higher-speed networks.

LTE is a significant play for Alcatel-Lucent, and such the vendor is taking no chances of the next generation technology not meeting expectations from its moment of commercialisation. Thus its NG Connect Program is a direct effort to manage the ecosystem that is set to come alive as a result of the deployment of LTE networks, taking no chances of there being a gap between expectations and actual delivery.

“The focus of the NG Connect Program is for the development of the  ecosystem for LTE and other high bandwidth products and applications,” says Laureen Cook, VP of 4G/LTE strategy for Alcatel-Lucent’s Emerging Technology & Media Global Solutions and Marketing. “It is an open ecosystem, which helps in the development of joint go-to-market strategies to the benefit of all parties.”

The NG Connect Program currently counts 36 partners, having launched with only six. As many as 78 are in the pipeline according to Cook, with the obvious benefit being the more ideas and experiences that can be exchanged, the stronger an ecosystem can be developed.

A new member to the program that is set to be confirmed at the Mobile World Congress in the middle of February is Nuance Communications, a speech recognition software maker.

The Connected Car offers the best example to date of the progress being made by the NG Connect Program, displaying how a number of various different application providers have been able to partner and utilise the in-vehicle environment to showcase and operate their respective products.

The Connected Car concept was developed under the auspices of the NG Connect Program and is a multi-industry collaboration among leading network, device, application automotive and content suppliers to develop reintegrated, tested examples of applications and services for 3G and LTE networks.

In the middle of January, Alcatel-Lucent conducted live demonstrations of a LTE network in France in the 2.6 GHz spectrum band, and was the European debut of the ‘LTE Connected Car’. NG Connect Program partners that contributed to the development of the LTE Connected Car concept include QNX Software Systems, Toyota Motor Sales (TMS ) US, Chumby, Kabillion and Atlantic Records.

The LTE Connected Car concept represents an exciting new potential revenue opportunity for network operators, automotive suppliers and application providers, and sets the stage to usher in a new era of richer and personalised in-car end-user experiences. This solution concept car offers a comprehensive menu of futuristic entertainment, infotainment, security and driving-related features that can be sampled in the vehicle.

“The car is a proof of concept,” says Cook. “And we are the only vendor operating such a program.”

LTE is of significant strategic importance to Alcatel-Lucent with the vendor stating it is actively engaged in the majority of LTE projects being pursued by tier one operators worldwide, including ongoing trials with 19 customers to date.

The vendor is also investing heavily in the development of solutions that help expedite the deployment of LTE networks and at the beginning of this month announced the introduction of a new radio module, based on software defined radio (SDR) technology, which gives mobile service providers the flexibility to support any mix of 2G GSM, 3G W-CDMA/HSPA+ and LTE services simultaneously. In addition to supporting new deployments now, this capability can be introduced in more than 700,000 Alcatel-Lucent base stations already deployed by service providers worldwide, offering a seamless, cost-effective way for operators to introduce the latest generation of technologies – at their own pace – while continuing to support their existing customers.

The new converged radio module, called the MC-TR X,is a key building block of Alcatel-Lucent’s Converged RAN (radio access network) portfolio, which is geared toward increasing the capacity and the coverage of all networks while minimising the overall total cost of ownership for operators. The converged radio module has the same form factor as the previous generations of TRX modules. This means that the new module can be implemented on all multi-standard base stations deployed by Alcatel-Lucent around the world since 1999, and is supported in all base stations sold today. In addition it supports any 3GPP specification and complies with all local regulatory requirements.

The new converged radio module offers very high GSM capacity, supporting up to 2.5x the transceiver capacity per cabinet to help operators address market densification requirements. The new converged radio module can be configured to maximise network coverage thus reducing the number of sites. It integrates advanced radio capabilities such as MIMO (multiple input/multiple output) to ensure the best performance when used in a W-CDMA/HSPA+ or LTE configuration. It also can address a range of spectrum configurations, supporting bandwidths of up to 20MHz, offering exceptional flexibility for deployments and maximum capacity to enable the introduction of LTE.

This new module is complemented by the company’s professional services capabilities, particularly in the areas of radio network design and deployment. Leveraging its experience managing mobile network upgrade efforts, Alcatel-Lucent can collaborate with and counsel mobile operators as they plan for and work through the re-farming process and manage the evolution of their networks to support next-generation services and applications.

Al Barrak and his managementeam have added tens of billions to Zain’s valuation over the years, and there are fears that some key executives may now also exit

It was never the modus operandi of the Zain Group to lie low and stay out of the public eye. Yet, to a large extent this is precisely what it has been doing for the past six months since Zain shareholders led by the Kharafi Group announced they had signed an agreement with a Malaysian-Indian consortium for the sale of a 46 per cent stake in the Kuwait mobile operator group. The shareholders made it clear that the negotiations for the sale were taking place at shareholder level, with little-to-no input from Zain’s executive management. This was a development that must have been particularly frustrating for Saad Al Barrak, given he had been the architect of the tens of billions of dollars of shareholder value during his time at the helm.

“There are so much unknown factors and lack of certainty,” commented a Zain insider when Comm. sought further details surrounding Al Barrak’s departure.

The insider’s comment seems to capture the mood at the operator perfectly; as is the case with the change of any leader, people become concerned with what an unknown future may hold, and what their position may be within it.

Zain’s board of directors issued a statement that Al Barrak’s resignation had been accepted and that he would officially leave his position as of the end of March – an inauspicious end to a glittering career with the Kuwait-listed mobile operator.

Al Barrak will forever be synonymous with raising the expectations of Gulf telecom operators beyond their domestic or regional markets, instead triggering a sense of self-confidence that the world setting was where operators from the region could legitimately aim for.

His 3×3x3 strategy, which revolved around growing from a regional player to becoming a leading international operation in as short a time as possible became the measuring stick for other regional operators including Etisalat and Qtel amongst others, when it came to articulating their ambitions.

Zain’s (then branded MTC) foray into Africa in 2005 for the princely sum of US$3.4 billion for Celtel International’s pan-continental assets was a brave move, which captured the telecom sector’s attention and marked the shift in power away from European telecom incumbents that had been pursuing emerging market strategies with various degrees of success, towards cash-rich Gulf-based operators.

What followed was a three-year frenzy of petrodollar-fuelled acquisitions by Gulf and other emerging market operators that literally froze out historical big hitters such as Vodafone, T-Mobile and France Telecom from investment opportunities in countries including Egypt (third licence), Saudi Arabia (second and third licences) and Iran (second licence).

The rebranding of MTC to Zain in 2007 was a manifestation of Al Barrak’s vision to bring all his energy, vibrancy and expectations for the operator under a single identity. His aim was to have Zain stand as a beacon of pride to what the Arab world had been able to achieve in the highly competitive global telecom world. Achieving the vision is now something that will likely take longer than Al Barrak had envisioned, though it is no longer his responsibility to drive it in the necessary direction. Brand Zain itself has been knocked by a number of setbacks, which in turn have impacted the company’s share price for much of 2009 and prevented Zain from seeking a prestigious secondary listing on the London Stock Exchange like it had intended to.

The company’s African assets, while accounting for an overwhelming number of its overall subscriber base have been adding disproportionately low contributions to service revenues and even lower amounts to net income. Speculation that Zain was considering selling off its African assets for reasons that were believed to be as much about allowing shareholders to cash-out on the value growth as much as it may have been about selling an underperforming asset for its highest valuation marked a significant shift in the market’s perception of Zain and its strategic options going forward.

Al Barrak’s successor will be faced with a number of challenges, not least the one of trying to fill the shoes of a senior manager as confident, self-assured and effective as his predecessor was. The successor will also be required to define the direction that the operator is set to follow immediately and into the medium-term.

Zain has borrowed significantly in order to fuel its expansion and with the tightened financial markets as a result of the global economic crisis, managing the operator’s debt obligations will be a priority. Just last month Zain Saudi Arabia announced it was in discussions with creditors over missing some financial commitments during 2009, connected with a two-year US$2.5 billion Islamic loan. Al Barrak had said the unmet commitment was not debt repayment, but related to performance ratios the mobile operator was expected to deliver to banks. Lenders have pardoned it under the condition they agree to a financial plan for 2010.

According to a statement, Zain Saudi Arabia said its capacity to ensure a timely delivery on commitments and continue in its business, hinges on the firm’s ability to ensure adequate funds on time and also on its success in discussing and changing some of the commitments for the four quarters to end-December, 2010.

The incoming CEO will also have to address the market speculation with respect the sale of any part of Zain Group or its African operations to any party. The speculation and uncertainty on the matter have wreaked havoc with Zain’s strategic outlook and the market’s understanding of it.

Choice Al Barrack rhetoric

“Be first, be daring and be different… This is the motto that has guided Zain from our beginnings as a small regional player to an international leader, and it will guide us from global player, to global leader. You are as large as your dream and as able as the capabilities you build. You have… two choices as a human being: to be a subject of history or a maker of history. Zain has chosen to belong to the second category”

“Despite the challenges imposed by the global economic crisis and the competitive markets in which we operate, these impressive first quarter results are testament to the sound management practices of the group and a reflection of our unwavering commitment to reach our 2011 target of being a top-ten global mobile operator”

“When we were small we had to make these kinds of agreements (co-branding agreements) with the giants (Vodafone) in order to make our businesses visible. Now that we are bigger and can stand on our own two feet we don’t need them. We now want to become like those giants and will achieve that by either bidding against them or by acquiring them”

Mohammed Omran says prudence and the ambition to add value to the group are the premises on which Etisalat formulates its expansion strategy

“We look to 2010 with a combination of confidence and interest, and  expect the year to throw up many challenges,” says Mohammed Omran, recognising that telcos today are operating in an environment that is significantly altered to the traditional telecom sector of old. “Change in the world of telecommunications is a constant factor with new business models, and different technologies converging.”

Etisalat will face the year ahead with a measure of confidence brought about by its strong financial performance during the course of 2009, despite the global economic slump. The corporation reported net profit of AED8.84 billion (US$2.41 billion) on revenues of AED30.83 billion, up 16 per cent and five per cent respectively year-on-year. Etisalat counted 94 million subscribers across 18 markets, having entered 10 of those territories in only the past five years.

In those five years, the climate surrounding Gulf operator-fuelled expansion has altered immensely, from a rush to add scale in new regions, to a chess-like review of what next move makes the most strategic sense and how should it best be executed.

“Going forward we should expect to see more emphasis on accelerating decision making and execution”, comments Zoran Vasiljev, partner at Value Partners. “There will be shortened time-to-market and launch timelines, strengthening of management talent, and a renewed focus on key accounts and innovation.”

Etisalat continues to remain bullish about its international plans, with an aim to increase income from operations outside of the UAE from 10 per cent currently to around 50 per cent of overall revenues over time.

“Asia and Africa remain our focus areas for expansion,” asserts Omran. “These are markets with high populations and low technology penetration. They are ripe for the many new technologies and value added services that we are introducing to the region.”

Indeed at the beginning of February Etisalat announced it had acquired the remaining shares of African operator Atlantique Telecom for US$75 million, thereby gaining full control of the operator. Etisalat first acquired a 50 per cent stake in Atlantique in 2005, along with management rights until April 2015, and has steadily increased its equity in stages. The completion of the acquisition was executed through the purchase of an outstanding 18 per cent of shares. The West African company gives Etisalat access to seven countries in West Africa, namely: Ivory Coast, Gabon, Niger, Benin, Burkino Faso, Togo and Central African Republic.

At the same time as it announced its further investment in Atlantique Telecom, Etisalat also detailed its application to raise its equity in Indian subsidiary  Etisalat DB to 50 per cent plus one share. Etisalat filed an application in December with India’s Foreign Investment Promotion Board (FIPB) for a planned increase in equity of Etisalat DB, from its current 44.73 per cent shareholding to 50 per cent and is currently awaiting regulatory approval for the proposal. Etisalat originally paid US$900 million for the stake in Swan Telecom in 2008, before renaming the entity Etisalat DB in June last year. Etisalat DB holds licences to provide telephony, Internet and broadband services in 15 telecommunications circles across India, covering a population footprint of more than 900 million. The company is headquartered in Mumbai and is yet to launch services.

“We shall soon start our operations in India, one of the largest telecom markets in the world and have just applied to acquire a controlling stake,” Omran says. “We plan to invest in the company to ensure it has the dynamism to take the leading position in the market in the next few years and that it continues its role in the development and growth of the telecom sector.”

Etisalat’s ongoing appetite for investments into Africa flies in the face of the strategies being adopted by a number of its peers, which have suggested that making money in the African context is a difficult thing to achieve. Zain, the early flag bearer of Gulf investment in Africa’s telecom sector has seen some of its operations on the continent struggle to justify the premium they were acquired at, resulting in a half-hearted attempt to flog the entire business off to Vivendi last year. MTN Group, Africa’s leading mobile operator was involved in frustratingly long and fruitless merger negotiations with Indian operator Bharti Airtel in 2008 and 2009, driven as much perhaps by MTN management’s desire to cash-out of their stakeholdings as it was by a belief perhaps that in isolation the telecom market in Africa enjoys only limited upside.

Industry convergence and the pursuit of non-core activities are challenges Etisalat, like other telcos, has to devise strategies to overcome

Jamal Al Jarwan, the head of Etisalat’s international investments arm is convinced positive growth prospects still exist in Africa and parts of the Middle East, and late last year said Etisalat was considering expansion into Libya, Syria and Lebanon, amongst other markets. Etisalat has offered LYD1 billion (US$825 million) in a “comprehensive offer” for the right to operate Libya’s third mobile licence. Al Jarwan confirmed last year that Etisalat had submitted a technical, financial and commercial offer for the licence in Libya, with the investment potentially reaching around LYD1 billion. The announcement from the Libyan government is expected imminently.

Lebanon, which has two state-owned telecom operators, is once again seeking to privatise the business, which is a development of interest to Etisalat. The UAE operator also intends to participate in the privatisation of Syria’s sole mobile operator.

The timing of Etisalat’s zest for foreign investments aligns well with the growing level of competition that exists for the telco in its domestic market. There is no cause for concern though, but competitive prudence is required. Etisalat counted more than 7.74 million mobile lines in the UAE in 2009, an increase of six per cent year-on-year. Fixed line subscribers numbered 1.31 million, while the telco’s Internet customer base rose 16 per cent to reach 1.33 million end-December.

Market competitor Du is ramping up competitive pressure in the market. During the course of 2009, CEO Osman Sultan said he wanted to see the operator garner a greater stake in the post-paid and enterprise market in the country, which has traditionally been Etisalat’s strongest and most profitable market segment. Earlier this month Du introduced a homephone recharge service, allowing subscribers to prepay credit on any home landline in the country, regardless of provider, and make local and international calls at attractive rates. Such offers encroach further onto Etisalat’s domestic stronghold, requiring the incumbent to look to innovate through what it offers domestically and the opportunities it pursues internationally.

“Services such as financial remittance services, which bring banking services into reach of all segments of the community, are of interest to us,” Omran says. “We foresee an area of significant growth potential in mobile commerce. Applications in m-commerce present an excellent opportunity for us to capitalise, given that Etisalat is already a known technology leader in the region.”

As early as mid-2008, Etisalat began piloting a mobile money transfer application between the UAE and India, in cooperation with Mashreqbank, Tata Communications (formerly VSNL ), Idea Cellular and HSBC India. The service enables Indian expatriates in the UAE to transfer money to their relatives in India through Idea Cellular, with Tata Communications being the central hub for the service.

“We have initiated certain steps, including our tie-up with some of the national banks. Through this we aim to revolutionise banking technology in a pilot programme enabling customers to make day-to-day purchases and pay for them using their mobile phones,” Omran explains.

Given the pace of change occurring in the telecom sector, and new directions service providers are undertaking, Etisalat is looking to embrace the divergent opportunities that are set to exist in the near-future. For example the telco continues to develop its portfolio of non-core services through Etisalat Services Holding. This suite of services extends to businesses as diverse as SIM card manufacturing; submarine cable maintenance and deployment; training and education; roaming clearing house; facilities management; as well as directory enquiry services and land cabling projects. Each of these non-core activities is being prepared to help fuel Etisalat’s growth and keep it in line with global developments.

Etisalat has been pursuing an ambition to “become a top 10 operator globally by 2010,” and though the telco is unlikely to achieve this milestone with respect to revenues or subscriber numbers, the span of its geographic presence is likely to catapult it to the top tier of global service providers.

“Over the coming period Etisalat will work to leverage its scale to drive synergies, innovate and grow new businesses, transforming to achieve operational excellence and expand internationally to further build scale,” says Omran. “This will help us achieve our ambition to be the service provider of choice in each market we operate and become a leading global telecom player – delivering top quality services and innovation, driven by empowered people.”

Ahmad has experience in the region, most recently as Gulf Carrier Sales Manager for Nortel

Ciena Corporation was established in 1992, with its corporate headquarters situated in Maryland, counting more than 2,000 employees. The company’s main area of expertise is in the automation of complex networks with
programmable optical and Ethernet platforms, intelligent software and strategic services; helping customers adapt and scale. In 2009 the company opened its first office in the Middle East, choosing Abu Dhabi as the location from which to service the UAE and Gulf region with its specialist solutions.

“We have been in the region for a few months now,” says Mashood Ahmad, regional managing director, Middle East and Pakistan for Ciena. “We have been conducting the groundwork since the middle of last year and our target audience are tier 1 and tier 2 operators, together with some of the larger government sectors,” he adds.

Ciena’s key offerings include Optical Service Delivery incorporating advanced platform integrating OTN , optical Ethernet, and programmable ports. Ciena’s Carrier Ethernet Service Delivery deals with intelligent devices backhaul and aggregation networks; while the company’s Unified Network and Service Management offers a software solution for comprehensive service life-cycle control and proactive monitoring. Ciena Specialist Services is a practice that applies the company’s expertise across a wide range of technologies and service types.

Ahmad is in a strong position to help Ciena navigate through this new geographic territory given his experience of more than a decade in the telecom sector, most recently as Gulf Carrier Sales Manager for Nortel.

“We are in the business of transitioning optical and Ethernet infrastructure and are looking to alternative providers to help grow Next Generation Networks in which optical and Ethernet are converged into a single network,” Ahmad says. “There is huge demand for bandwidth and we are in fact working with a large incumbent in the Middle East on the deployment of the largest 40 Gig network in the region.”

Ahmad sees similar data traffic demand in the Middle East region as is found in other parts of the world, where demand for broadband access is growing exponentially.

With respect to entering the market at this stage in its development, Ahmad believes traditional vendors have had to consolidate to large degree over the past few years, with last year’s economic downturn compounding matters for the more fragile amongst them. This, Ahmad believes, has opened up opportunities for specialists such as Ciena to offer focussed, dedicated services in specific areas that consolidated vendors may not be able to reach as effectively.

“We offer practical network transition from complicated to automated,” Ahmad says, revealing the company has plans underfoot to open a secondary office in Saudi Arabia soon.

Target sectors outside of telecom that Ciena is looking to establish a strong presence include utilities, research and education, enterprises, as well as government sectors.

“We have seen the Middle East rising to become a technology innovation market, and it is exciting to now be a part of that,” Ahmad comments. “There is a move away from ring architecture to a mesh architecture that requires automation, and our solutions exceed Optical Transport Network (OTN ) standards.”

Ahmad says that while the company has only recently established a permanent presence in the region it is known by customers, and his ambition in the immediate term is to build a wider presence. He would like to see Ciena, ‘scaling with intimacy’, without aiming to take on larger vendors directly, but rather develop a relevant relationship with customers that will see Ciena becoming the provider of choice in the services and products it delivers.

Ciena takes over Nortel’s Ethernet business

Ciena agreed to pay US$530 million in cash and issue US$239 million in aggregate principal amount of 6 per cent Senior Convertible notes due 2017 for a total consideration of US $769 million for the assets. A motion to approve Ciena as the acquirer was heard by bankruptcy courts in the US and Canada on December 2.

“These optical and carrier Ethernet assets bring exceptional technologies, talent and scale that will accelerate Ciena’s current strategy to deliver innovative network solutions to customers worldwide,” said Gary Smith, Ciena’s CEO and president. “With this combination, we are bringing together complementary technologies in switching and transport to create an innovative powerhouse with the scale to challenge the industry status quo and offer customers a practical path for transitioning to automated, optical Ethernet-based networking. We will be intently focused on integration as we work together to deliver the benefits of this transaction to customers, employees and shareholders.”

The assets to be acquired generated approximately US$1.36 billion in revenue for Nortel in 2008 and US$556 million (unaudited) in the first six months of 2009. Ciena is expected to make employment offers to at least 2,000 Nortel employees to become part of Ciena’s global team of network specialists. The transaction is expected to close in the first calendar quarter of 2010.

The board called on the ‘reserve member’ for the interim and also discussed the creation of the new position of CEO of Zain Group, the holder of which would succeed Al Barrak. However, the board members decided to defer naming Al Barrak’s successor until its next meeting.

The board expressed its appreciation of all that Al Barrak had achieved for the company over the past seven years, in particular his ambitious 3×3x3 strategy and the role he has played in transforming the group’s performance to match that of the world’s major international telecommunications companies.

“Former minister of communication Nabil bin Salama has been chosen as the chief executive,” Kuwaiti daily Al-Qabas reported.

Yesterday Zain said in a statement that the operator’s chairman would convene the board of directors at the soonest convenient time to deliberate on the matter.

It is understood that Zain’s board met today to discuss Al-Barrak’s resignation

Comm. contacted a Zain spokesperson for confirmation of the resignation, and was told, “No comment” earlier this afternoon.

Speculation regarding Al Barrak’s future at Zain began to mount last September after leading investors in Zain Group signed an agreement with a Malaysian-Indian consortium for the sale of a 46 per cent stake in the Kuwait mobile operator group. The agreement had been negotiated and entered into by Zain shareholders, with little-to-no input from Zain’s executive management, led by Al Barrak, a situation that is believed to have frustrated the CEO immensely.