New media fuels handset sales

Updated 07 January 2013

New media fuels handset sales

Arab customers are among the most tech-literate in the world, and they are very discerning about what they buy and how their device may or may not work, according to Axiom Telecom's Operations Manager Jamal Al-Bugami.
Serving about 100,000 customers in 2012, Axiom presented a unique service where its mission is to offer a unique service that encourages customers to have latest gadgets in their palms with value for their money on their old devices, Al-Bugami told Diana Al-Jassem of Arab News in an exclusive interview. Axiom Telecom is ramping up their business like never before, Al-Bugami said. "We now hold 40 percent of the Saudi handset market, based on revenue generated to date, and 20 new stores were opened across the region in 2012, which is a 25 percent increase.”
Al-Bugami noted that Axiom Telecom recorded SR 3 billion sales, which is 36 percent higher compared to 2011.

Following is the text of the interview:

How could you describe the competition among mobile and communication companies in the GCC market generally and Saudi market particularly?
Speaking from a retail perspective, there is a strong, healthy competition right across Saudi Arabia and elsewhere in the GCC. And we welcome that. We cannot be in a position where we become complacent. We need to continually assess the playing field and adapt for the better. Only then we can provide world-class services to our customers.

We noticed a massive change in the world of mobile sales during the past 10 years due to the globalization and the introduction of smartphones. Amid a tough competition in sales of smartphones, what are your expectations for their sales in the coming years?
The boom of smartphones will continue for a long time in the Middle East. This is one of the most tech-hungry parts of the world, and the demand for better connectivity and mobility is only going to rise and rise. In part, this will be fueled by a host of new and attractive offerings from regional telecom operators in the coming years.

How do you describe the interest in the field of mobile testing? And what is the exact difference between mobile testing and mobile application testing?
Mobile device testing is hugely important as it provides essential quality assurance for the hardware and software of our smart phones and tablets. Testing is multifaceted and encompasses research and development (R&D), factory testing and certificate testing. Mobile application testing entails an assessment of app functionality, usability and consistency. In an era of ever proliferating data and tech ubiquity, this is a considerable challenge. Mobile devices are markedly different in size and capabilities, operating systems are idiosyncratic and mobile networks offer variable platforms the mobile experience. Getting the right balance is tricky but essential for ease of use and enduring app success. As a company that always puts the customer experience first, Axiom Telecom is committed to closely following developments in both fields, including training our support staff to react appropriately to any issues related to either hardware or software.

What kind of deals Axiom Telecom is looking at to expand its sales in Saudi Arabia, and how do you evaluate the growth of Saudi telecom market compared to other GCC markets?
In line with our business plan, we are scaling up our operations across the region, and Saudi Arabia is one of our absolute key markets. This is a country with an extremely tech savvy population and a desire not only for best-in-class devices, but also a support network that ensures they are covered for any eventuality and kept in the loop about the latest developments. This is where Axiom Telecom already stands out from the crowd, and we will do everything we can to continue to gain momentum and build on this solid foundation.

Axiom Telecom claims that its specialized Solution Bays have knowledgeable staff to demonstrate the latest solutions to consumers, including software and applications such as GPS, email, and music. Could you give us more details about these solutions and the awareness level of Arab customers?
Arab customers are among the most tech-literates in the world, and they are very discerning about what they buy and how their device may or may not work. This is exactly why our Solution Bays are so important. Our experts, especially the trained staff, know how to hone in on the details that matter, whether they are dealing with a mobile newcomer or anw ardent tech-head, and talk about all the issues and crucially hold in-store demonstrations. This ensures the customer purchases a device that best suits their lifestyle and/or business needs. We get repeat business because people trust us and we know what we are talking about. Our Solution Bays feed into our over-arching dedication to customer engagement. In order to provide the best possible retail experience, whether in-store or online, we need to have open lines of communication, and we need to be nimble and adaptive. Our strategy here includes a comprehensive, cutting-edge CRM system and a dedicated call center open from 8 a.m. to 10 p.m. six days a week and 3 p.m. to 10 a.m. on Fridays. Customer complaints and feedback are processed instantly and acted upon without lag-time, and questions for more information are answered on the spot. We actively follow-up with customers to ensure they are satisfied. We are also extremely active in the social media space. Axiom customers want to engage with us and we have responded by creating a community that is both vibrant and fulfilling. This includes the usual communicative channels, but we also go above and beyond to offer informative e-newsletters, games, applications, ringtones and wallpapers. At Axiom, we gain the respect of our customers because we never subject them to spam or insult their intelligence. We give them exclusive, peerless content, support and insight. Above all, we keep listening to what they say. All of our service and product innovations are traceable back to customer needs.

Axiom Telecom was the first Saudi retailer to stock the Google Nexus 7. Tell us about this new service, and what new services Axiom Telecom is going to launch for the Saudi customers?
Google Nexus 7 is an important addition to a burgeoning global tablet market, so we were delighted to be the first in the Kingdom to stock it. In 2012, we were also one of the first retailers in the world to sell the Samsung Galaxy S3, Samsung Galaxy Note II, Blackberry 9220, Blackberry 9320, Blackberry Porsche, and one of the first in the region to bring coveted devices like Samsung Galaxy Camera and iPad Mini to our customers. Axiom is an authorized distributor for Blackberry & Samsung. In the coming year, Axiom Telecom intends to continue selling new releases ahead of the competition, as well as add to our long list of value-added support services. This will include in-store innovations and device-specific offerings.

How does Axiom Telecom keep ranking number one in communication market despite the tough competition in retail sector?
The Axiom shopping experience is carefully and intricately evolved with the customer in mind. We know that people do not want to wait for the latest and greatest products, so all the stops are pulled out to provide people what they want, when they want it – without compromising on a full spectrum of customer support. Our retail stores serve customers for the latest and innovating smart phones and tablets, and continuously strive to fulfill Saudi Arabia's growing market demand by a sophisticated business plan relentlessly focused on continuous improvement. For example, we are one of the few brands in the region to have invested heavily in systems such as the Toyota Production System (TPS), as well as cutting-edge business philosophies such as 5s, Kaizen, Hoshin and A3. To date, the Kaizen system alone has resulted in savings of more than SR 1 million through waste elimination. Furthermore, Axiom Telecom is certified to the ISO 9000 and ISO 14000 international standards for quality and environmental management.

Have political changes in Middle East affected the mobile and Internet growth since 2011?
Political developments in the Middle East have significantly boosted mobile and Internet uptake. Populations, particularly the young, are more connected than ever before and are determined to use the technology to debate, socialize and share ideas. For the region's business sector - from large corporations to SMEs and individuals — it is also proving to be particularly important in driving innovation, and creating much needed jobs.

All-American banker heads back to the Kingdom

Updated 42 min 10 sec ago

All-American banker heads back to the Kingdom

  • "The implementation and execution of Vision 2030 will produce global companies for Saudi Arabia, and we can help in that process," said Citigroup CEO
  • "The government has a lot on its plate and privatization takes a long time to set up. Privatization is one of those things that you only want to do once,”

If anybody deserves the description “all-American”, it is surely Mike Corbat, chief executive officer of Citigroup.

New England origins, a Harvard education, Ivy League American footballer and a Wall Street career are all evidence of the fact he was very definitely “born in the USA”, as is the in-bank nickname of “Clark Kent” — the alter-ego of Superman — due to his athletic physique and spectacles.

But last week Corbat was turning his mind away from the USA and toward Saudi Arabia, as the bank formally ended a 14-year self-imposed exile from the Kingdom with a ceremony at its new offices in Riyadh, symbolizing its return to the lucrative markets it first entered in the 1950s, among the first American banks to do business in the region.

Corbat took some time out of the day’s celebrations — a formal ribbon-cutting alongside Ibrahim Al Omar, governor of the Saudi Arabian General Investment Authority, and an elite dinner in the ballroom of the Four Seasons Hotel in Kingdom Tower — to talk exclusively to Arab News about Citi’s plans for the Saudi business at a time of rapid transformation in the Kingdom and the region.

“I am absolutely positive about the economic prospects for this region. We are in 13 countries here, with 2,500 employees, focusing on trade and business, with some consumer presence. The implementation and execution of Vision 2030 will produce global companies for Saudi Arabia, and we can help in that process. Citi can service some of their needs as they expand globally,” he said.

Citi withdrew from Saudi Arabia in 2004 in the aftermath of the 9/11 terrorist attacks in the USA, in a decision later described by executives as “a mistake.” Even before the enormous opportunities of Vision 2030 persuaded the bank it had to have a formal presence again in the Kingdom, and a license from the Capital Markets Authority (CMA) to pursue investment banking and other business there, the bank was back on the scene.

In 2015 it helped Saudi Aramco to raise multi-billion dollar loans, and advised the oil giant on Asian deals. The following year, which saw the formal unveiling of Vision 2030, Citi was involved in the groundbreaking $17.5 billion bond issue that marked the Kingdom’s debut on global capital markets.

Citi was back, but needed a CMA license to win more lucrative business in the big domestic economic transformation under way. That was finally granted in April of last year, and Carmen Haddad, a long serving Citi executive with extensive experience of the Middle East, was made head of the new Saudi operation.

“We’ve been at the front and center of the sovereign bonds drive Saudi has been doing for the past couple of years, and also with syndicated loans. But with the CMA license we can really show our worth. We can help with all future debt and equity transactions,” Corbat said.

Vision 2030 aims to reduce the Kingdom’s dependence on oil, but also to increase the contribution of the private sector to the national economy, and this is one area where Citi feels it can use its global experience. The bank has advised governments around the world on privatization strategies, and Saudi has a privatization schedule that ranks among the largest in history.

The timing and scale of the program is still unclear. Last year minsters put a value of $200bn on the program, but officials in Riyadh last week were talking more in the $60bn to $70bn range. And investors are still waiting for the first big sell-off of a state company. But Corbat insisted Citi would be ready to get involved when the time is right.

“Privatization is obviously a top priority of the Vision 2030 strategy, and we can bring our expertise to bear in this. I think it is right to take your time over something as significant as the privatization program. The government has a lot on its plate and privatization takes a long time to set up. Privatization is one of those things that you only want to do once,” he said.

By far the biggest element of the drive toward a more private sector-focused economy is the plan to sell shares in the Kingdom’s “jewel in the crown”, Saudi Aramco. Citi is among a small group of top global banks vying for business in the Aramco sell-off.

Originally planned as a big international initial public offering (IPO) by the end of this year, valuing the company at $2 trillion, doubts have begin to creep in over the valuation figure, and over the venue for what promises to be the biggest IPO in history. One suggestion is that Aramco will go only for a listing on the Tadawul exchange in Riyadh.

“I don’t know the timing of the IPO. Maybe they [the Saudi authorities] will want to start locally, in which case they have to be sure the capacity and liquidity are there,” Corbat said.

He believes that recent improvements to the market infrastructure in Saudi Arabia — which look set to see the country included in index provider MSCI’s widely-tracked Emerging Markets index from as early as next year — could make an “exclusive” IPO on Tadawul more attractive.

“The MSCI upgrade to emerging markets status will create more liquidity, and foreign investors will have to play their role,” he said.

“All the big reforms that have taken place on the Riyadh market recently have certainly made it a friendlier place for foreign investors. The CMA has been through more change than ever, and it’s a better place for that. The CMA over the past two years has proven to be progressive and consultative,” he added.

Citi found itself indirectly involved in the big anti-corruption campaign of last year, when their long-term partner and shareholder, Price Alwaleed Bin Talal, was among the businessmen detained in the Ritz Carlton hotel in Riyadh.

Corbat is reluctant to comment on the Kingdom’s internal affairs, though he did say that foreign direct investment would not be hit by the anti-graft drive. “I don’t think FDI has been or will be affected negatively by the anti-corruption campaign. Saudi Arabia is already the biggest economy in the region with only limited foreign investment. Imagine how far it could go with more,” he said.

On Alwaleed, he said: “He has been a shareholder since the early 1990s, and he has been a great shareholder, a loyal voice of support and reassurance. We’ve been fortunate to be able to count him as one of our shareholders. In all our dealings with him I’ve found him to be straightforward and transparent.”

Corbat was one of the top American executives who met with Saudi officials on the recent royal visit to the USA, intended in part to counter any adverse investor sentiment from the anti-corruption arrests, and was impressed by what he saw.

“The visit to the USA by the Crown Prince was extremely well received. The whole Saudi delegation impressed us with their drive and commitment to the transformation process. It was a very successful exercise for Saudi Arabia,” he said.

With 35 years at Citi under his belt, including responsibly for unwinding Citi’s “toxic” assets after the financial crisis, and wide ranging experience of the bank’s international operations, he is well placed to gauge global geo-politcal risk.

He sees some threat to the world financial system from the end of quantitative easing, which he called a “renormalization of the global economy”, and a more limited challenge to world economies from possible “trade wars” between the USA and China.

“I think it’s fair to say that if we did have a serious trade war, it would have an effect. But it would not be the end of trade. I think it’s more likely to redraw the trade lines of the world. Trade flows would move away from the big blocks and go through other areas, like Africa and other places for example,” he said.

On regional risks, always a factor in business and financial decisions in the Middle East, he said: “I think they are within acceptable limits and I don’t think they will go beyond that. The region is the leading center for oil and gas so what happens here has global implications,” he said, though with the caveat that the effects of a prolonged trade was on the “bookend” economies of the USA and China could have a negative impact on global commodity prices.

All-American Corbat may be, but Citi’s return to the Kingdom will just not be an exercise in stuffing US executives into the top jobs in Riyadh. The firm is committed to achieving 85 percent Saudi employment levels at its new office, and is already well on the way to achieving that.

“The market for talent in Saudi Arabia is extremely competitive, but we think we have a very strong appeal for candidates. We are very proud of our ability to invest in and train, and to improve home grown talent,” Corbat said.