Marcopolis presents the Saudi Arabia Report focused on the investments, doing business, economy and other topics featuring interviews with key executives. The sectors under review in this issue are industry, real-estate, ICT, investments, banking sector, telecom sector and many more.
Qanawat (the Arabic word means channels) has been growing by operating in the communication and technology sector. It is the leading distributor for the products of the second Saudi telecom provider Etihad Etisalat Company, better known as Mobily, whose share are listed on the Saudi Stock Exchange “Tadawul”.
Qanawat distributes telecom operators’ services (such as data, GSM, fixed) in its home market of Saudi Arabia and the MENA-region. “Today you have to evaluate the product based on the services and especially the data related services,” says CEO Mohamed Sadyeh.
Qanawat is 100 percent subsidiary of HITS Telecom from Kuwait. HITS Telecom Holding Company was incorporated in 1999 and listed on the Kuwait Stock Exchange in 2004. Its shares are also dual-listed at the local stock market of Dubai, the DFM.
HITS Telecom has positioned itself as a holding company for investments in the mobile telecom sector across the value chain, with a focus on network operators and distribution networks, across various geographies around the world, with immediate focus on Africa, Europe, the Middle East and South America.
The firm describes its mission as to define and exploit high profit niches in today’s and tomorrow’s IT world and to achieve this for the benefit of shareholders, stakeholders and employees. Qanawat has focused its scope of work to serve its adaptability to the market along with foreseeing its mission. Key performance indicators (KPI) of their focus are: creating change, customer focus, organizational learning, strategic direction and intent, goals, objectives and vision.
These indicators have been set to achieve the three keys to success: branding, positioning and innovation. Sadyeh: “Saudi Arabia is ranked amongst the top twitter usage countries in the world. Brand management and customer service are very important as mistakes can impact the reputation.”
In order to reach an optimum number of clients, Qanawat has created a dense retail outlet network, a wholesale distribution network and it works with telecom dealers supplying agreements and retail management solutions. “Qanawat Telecom is managing about 60 operator franchise outlets, for customers that visit the branch they don’t see Qanawat because everything there is Mobily,” the chief executive pointed out.
Competition is fierce in the kingdom with its 30 million plus, mostly tech-savvy citizens. The company has approached the market with joint ventures, resellers and retailers to present their products, all the while focusing on their strategy to control prices, enhance their margins and specify their target and volume.
Qanawat currently has a distribution network coverage reach to more than 80 percent of the KSA population, with over 30 percent of Mobily market share. Qanawat’s subscriber base of activated SIM cards is the largest in Gulf Arab Kingdom.” Five years ago, people did not shop online. Today, you rarely meet someone who hasn’t bought something online,” says the CEO.Qanawat Telecom launched a new application in January 2016.
“The application serves people by giving them access to someone else’s infrastructure,” says Sadyeh. “Qanawat Telecom will act like the medium between the people with the need and those who provide the solution to that need. The application is going to be customer focused. It is a big shift in the business model.”
The company states on its website that its success is built on “wide geographic coverage, regional management, local knowledge, retail to dealer distribution infrastructure and strength of its management team.” In the future, Qanawat aims to develop activities focusing on loyalty programs, the corporate business sector and on rolling out more kiosks and electronic payment applications Qanawat.
Sadyeh: “Qanawat Telecom’s future is to go for economies of scale and maintain good relations with the operator. The priority is to create new revenue streams using the brand, distribution, infrastructure or any other strength to increase the revenue.” In order to sweeten deals for its customers, Qanawat regularly runs event-driven campaigns like during the Islamic month of fasting, the Ramadan, or ahead of the Saudi national day which is on September 23.
Another strategic focus for Qanawat in the next five years is e-Commerce. “The virtual world and the digital world are growing fast. People live in front of their computers much more than they spend time in the street or in malls. eCommerce is selling more than 10 retail outlets while the costs are not even one tenth,” says Sadyeh. He is convinced that the biggest retailer in 2020 will be eCommerce. “This is a big area that we are investing in for the future. I believe that for any product owner it is important that they do not ignore this product channel otherwise they will be left behind.”
In addition, Saudi telecoms have invested in data centres. “Both, STC (Saudi Telecom Corporation) and Mobily have invested in large-scale data centres because they saw the iCloud concept potential. Major international corporations are moving towards cloud solutions, explains Sadyeh. “Microsoft for example has a new CEO now who was the ex-iCloud department head. Google and Amazon are the biggest iCloud providers worldwide. “
Through innovation and growth, Qanawat aims be the leader, the number one player, in all different ICT sub-sectors in Saudi Arabia. The firm has already snatched several regional and international IT awards such as the award for “Best Strategic Growth in 2010” by the Saudi Fast Growth 100 Index under the sponsorship of the Saudi General Investments Authority.