Interview with Shabib Ammari, Chairman of Jordan Telecom Group
What is your overall assessment of the Jordan ICT and telecom sector and how does it compare with other countries in the region?
I am not too crazy about changing the ranking of Jordan from a specific percentage to another; I think the ranking process itself is always constrained by important variables. The ranking process is indicative and not necessarily absolutely informative about the quality of a sector in a country. The ICT sector in Jordan is probably the most developed, or amongst the very few developed sectors in the region. We have the highest level of competitiveness in so many markets in the sector and a very good regulatory environment for the sector.
His Majesty King Abdullah constructed a vision that the Jordan economy must be transformed into a knowledge-based economy. The presence of this political leadership made it an incentive to push players to develop. I am very pleased to report that the King personally likes IT and is very involved in the sector. We have achieved about 30% internet penetration rate, and he would like to spread internet even further. We have a target of arriving at 50% penetration by the end of 2011. We have our own special strategy towards the governorates outside the capital city.
There is a concentration in the use of internet in Amman, specifically West Amman. Those living in other governorates need to have more chances to catch up with the capital city. We are in the process of establishing a 3 million JD fund to support spreading the internet culture in the governorates. We are coordinating with the ministry and will be giving unlimited offers to people living in the governorates; it increases our market share in the future and also works to bridge the gap in internet usage between the capital city and the governorates.
It was Jordan Telecom that carried the flag in spreading the internet culture. Prices by ISP’s to customers have dropped since the privatization of Jordan Telecom by a percentage that exceeds 86%. We started by acquiring the market leader among the ISP’s at the time, called Global 1. It was imperative that we become the price-setters in the market and create momentum. We reduced monthly subscriptions from customers from 50JD a month to something like 10JD a month. We are proud that we did lots of campaigns in remote areas to educate people about internet, and due to our policies of lowering prices across the board, Jordanians were able to access the internet, and other companies will follow and be price-takers.
We are proud that we are the only providers of ADSL in the country and will soon be the only apparent provider of internet services in the governorates – I’m sure others will follow. This is a collective effort of the ICT sector in Jordan, but we will always remain the leader of the sector, and is one of the elements of the vision for the future of our group.
How do you compete vis-à-vis other players?
In the GSM market in particular, Jordan is the most competitive compared to other countries in the region and many in the world. I have to say that sometimes too much competition could hurt. The regulatory body in any country should observe the best interest of the customers, and at the same time, they must not reduce the value of the sector and its contribution to GDP and employment.
The GSM market in Jordan has reached unprecedented levels, to the extent that between some operators, a promotional offer would result in a response by another operator that disturbs the market. There are four players in Jordan, an oligopoly. The outcome cannot easily be determined by economists, because it’s probability analysis and theory. It has been a good strategy adopted by Orange Jordan to not respond to other players, but to be at a distance from players who insist on responding to each other in the media. Usually, people have the belief that the most important element in competition is prices. When competition is at a level where it’s as severe as it is in Jordan, you have to result to other measures to differentiate yourselves.
Consumers are intelligent enough to understand that inexpensive could mean cheap, including the overall value the consumer is receiving, like quality of service. At Orange Jordan, we have a spectrum of telecom and IT services, and we have a state-of-the-art GSM network including the fact that we are the only provider of 3G services, as well as the fact that we cover the internet markets by more than 50%, and we are wholesalers. This allows us to be a “one stop shop;” you can find all your telecom and IT solutions in the same shop, which has a lot of value for consumers.
Consumers do consider prices but if you want to create a sort of loyalty or partnership with them, you must make sure they are always satisfied with you. We give them value and receive value from them.
What is your long-term strategy in terms of market share? What is your dream for the group?
Our growth rates historically have been satisfactory. Even when the world was hit with the financial crisis, I am very pleased to report that we have done great financially in 2009. We had a board meeting this month, and I reviewed the finances, and am proud to report that the results for this half of the year are very good relative to the fact that there has been a decline in aggregate demand, including demand for telecom and IT services. I am very keen to see that the process of growth will continue, and for growth to continue, all elements that I explained about competition are relevant.
We are doing better under competition than when we were a monopoly! That is a message to all telecom operators and monopolists that competition is healthy. I am very happy with the regulatory environment in Jordan; it is investment-inducing, and the ministry is also leading to address the interests of the customers. However, controlling policies need attention by regulatory bodies. I feel we have been doing very well and for us to continue doing this well, we need more of a regulatory emphasis on the impact of their decisions on the marketplace, and not consumers alone.
It should be emphasized that the value of a sector should not be hampered by introducing further operators that have to go through pricing policies that may hurt the sector in order to get a part of market share.
Do you have a need to attract foreign investors?
Jordan Telecom and Orange Jordan are the same in terms of strategies and policies. We strongly advocate and work in the direction of getting partnerships from other operators. The fact that we have the backbone of a fiber optic network allows us to be partners with others in Jordan and outside.
Last month, our CEO signed an agreement with Saudi Telecom, and with the Syrian Telecom; four players signed an agreement to form JADI – Jeddah, Amman, Damascus, and Istanbul. This is a great achievement and I feel that it could lead to more cooperation with other operators to utilize our services, to jointly use all networks involved, resulting in more investments, and the very best interests of the subscribers as well as the countries involved.
That type of cooperation is always welcome; we invite operators and investors in value-added services, and are wide open to new ideas and suggestions as long as it’s a win-win situation. The future is broadband. There are millions of services you can offer to consumers, and all investors in that area are welcome.