A common view of the downtown space in Dubai, United Arab Emirates, December 08, 2021.
Satish Kumar | Reuters
DUBAI, United Arab Emirates — The United Arab Emirates’ largest listed telecommunications supplier Etisalat has rebranded to “e&” and introduced a strategic restructure aimed toward driving new investments and increasing worldwide growth.
“We wish to actually up our recreation,” e& CEO Hatem Dowidar advised CNBC in an unique interview. “We noticed how the tech giants grew. We look now at their market caps and the returns they provide, and we really feel jealous,” he mentioned.
The restructure splits the telco into a number of new divisions. The telecom division, which operates in 16 markets and contains its Etisalat UAE enterprise, will stay the identical. New enterprise verticals together with “e& life” and “e& enterprise” will break up its shopper and enterprise divisions, whereas a brand new vertical referred to as “e& capital” will function an funding arm to focus on joint ventures, acquisitions and startup funding alternatives.
“On whether or not the technique is smart, I imagine the reply is sure,” Omar Maher, Director of telecom analysis at EFG-Hermes advised CNBC.
“Telcos typically, not simply Etisalat, want to maneuver out of the normal telco mannequin and transfer up the worth chain as a result of they’ve been and proceed to face vital competitors from OTT (excessive) gamers, resembling Google and Facebook, that are reaping all the advantages of an more and more digitized world with out paying a cent within the connectivity a part of the equation,” he mentioned.
New enterprise and abroad growth
Analysts at EFG-Hermes anticipate low-single-digit income growth and steady margins from e& within the yr forward. Maher additionally mentioned the restructure might assist to “crystallize the worth of Etisalat’s belongings as they carve them out and doubtlessly have them listed as separate entities.” Dowidar did not rule out asset divestments or listings as a part of future growth plans.
“When the companies are prepared, we’ll research whether or not we invite companions or we listing any of those,” Dowidar mentioned. “We can see sooner or later once they attain a sure stage of maturity, some listings, whether or not for the division or among the firms beneath the division, however they’re going to all stay beneath the umbrella of e&,” he added.
The firm has undertaken acquisitions lately, together with cyber safety agency Help AG, information middle operator Khazna, and on-line retailer elGrocer. The firm additionally moved into digital banking, launching a partnership deal for digital financial institution WIO earlier this yr.
“It appears there might be much more going ahead with the brand new construction in place,” Maher mentioned.
The group mentioned it plans to focus on yet-to-be-named international locations and corporations in Asia and Europe over the following 18 months to speed up its growth, however stopped wanting offering particular particulars.
“We’re wanting primarily in the mean time at markets which have geopolitical stability in addition to a mature regulatory atmosphere,” Dowidar mentioned. “Even on the telco aspect, we wish to create extra diversification of sources of income and revenue, in addition to foreign money stability,” he added.
Whatsapp, FaceTime bans keep in place
The growth of companies come regardless of a long running frustration over a ban on Whatsapp and Facetime calls within the UAE, rumored to be resulting from safety issues and efforts to guard revenues of the home duopoly of the state’s two telecom suppliers, E& and Du.
“With the dimensions now we have and the enterprise now we have, it isn’t about safety,” Dowidar mentioned. A call to unblock Whatsapp voice and video calls rests with the regulator and never the telco.
“There are necessities, possibly they can not meet the regulatory necessities,” Dowidar mentioned.
“I don’t know,” he replied when requested if safety was a key concern.
The UAE lifted some restrictions on work from home tools resembling Zoom and Skype in 2020, however the preferred companies stay blocked, which means residents usually have to make use of fee-based companies from telcos as a substitute.
e& is among the largest listed companies within the UAE and one of many largest listed telcos within the Middle East by market capitalization. Consolidated full yr web revenue rose to 9.3 billion dirhams ($2.5 billion) within the 2021 monetary yr.