a week in wireless


Saad to see you go

There can’t be many carrier CEOs who are likened to fathers by their staff. Saad Al Barrak, the talismanic managing director and deputy chairman of Middle East and African regional operator Zain, seems to be one of them, though. So there were some distraught Zainers out there this week as Al Barrak handed in his resignation. The move fuelled speculation on what analysts are calling a “divergence of vision” between Al Barrak as the company’s owners, Zain’s board of directors promptly accepted the notice, which will become effective on March 1.

Al Barrak is spoken about with a reverence bordering on the cultish by some Zain employees. Here are examples of a few comments left on the telecoms.com website this week. Some of read as if the man’s popped his clogs rather than decided to jack in his job:

“I am one among dozens of others who look to Dr. Saad as Leader and Father that we trust.”

“The wonderful world created by Saad Al Barrak can’t be wonderful without him.”

“We believe in him, his words, his promise, his charter, his continuous dreams.”

“We love Him because He first loved us.”

Ok, ok, so the last one was a quote about Jesus. But you get the picture.

Passionate stuff, eh? No doubt the man is a visionary, the chief architect of Zain’s transformation from tiny, Kuwaiti operator MTC in 2002, to the emerging markets powerhouse it is today, boasting nearly 53 million subscribers in 22 markets. Yet this ambitious expansion strategy has not been without its detractors and Al Barrak’s vision has been under scrutiny since the economic downturn began to bite. Cynics were encouraged by his preparedness to spend eye-watering sums of money when necessary-most famously more than $6bn for the third licence in Saudi Arabia- leading to suggestions that the once bottomless Zain coffers now echo in emptiness.

But the supporters were driven by a vision to turn Zain into top ten global player in three, three-year evolutionary steps and the successful creation of a borderless African network, the One Network, where roaming charges are not incurred.

It’s tempting to suggest that Al Barrak may have simply taken on too big a task in what proved to be a rotten piece of economic timing, but his decision to step down looks to be due to differences between his vision and what the owners felt was best. As Emeka Obiodu, senior analyst at Ovum, notes: “He didn’t bite off more than he can chew, but his vision diverged from the vision of the owners. When we did some financial analysis on Zain, the company wasn’t doing particularly badly. It wasn’t like he ran the business into the ground, although you have to concede that some of the small markets in Africa were seriously under-performing.”

2009 was a tough year. Rumours abounded that Zain was looking to offload its African portfolio (they continue to abound) and the proposed merger between Zain and Palestinian operator Paltel was called off after months of courting. “His whole ambition was blown to pieces by the owners who wanted to sell off in Africa and are still contemplating selling that stake,” Obiodu said.

Al Barrak was due to be the keynote speaker at the Middle East Telco World Summit held in Dubai in December, which the Informer attended, but, perhaps tellingly, he didn’t show. Still, as telecoms.com said in its Top 40 to Watch in mobile in 2009, Al Barrak remains one to watch.

He wasn’t the only one doing the off this week. The board of France Telecom is currently considering a proposal that could remove Didier Lombard as chief executive of the operator. The proposal, submitted by Lombard himself, would see him retain the role as chairman with a focus on the group’s strategic and technological orientations, but replaced in the capacity of CEO.

Lombard may be seen as another visionary character, one who took the Orange brand to the heart of France Telecom’s operations with a re-badging strategy across the French incumbent’s service and international portfolio. But 2009 proved to be a bad year for Lombard too, with his leadership shaken by a spate of suicides among France Telecom employees. Louis-Pierre Wenes, then deputy CEO of French operations, stood down in response, but it seems this gesture was not enough. And this latest development could accelerate Wenes’ replacement and CEO-designate Stephane Richard’s ascension to the top rung of the FT ladder.

Leaving on a much sourer note this week, was Sun Microsystems CEO, Jonathan Schwartz, who decided to announce his resignation in a tweet. “Today’s my last day at Sun. I’ll miss it. Seems only fitting to end on a #haiku. Financial crisis/Stalled too many customers/CEO no more.” Schwartz’s own vision involved the embrace of open source ethics with regard to Java and Solaris, and the acquisition of MySQL, but it was a strategy that failed to bring the company any money. Schwartz was finally thwarted, or ‘schwarted’ as one wag noted, when Oracle moved to acquire the firm.

Sun may not have done well from Schwartz’s strategies, but he’s done alright. His severance package is a cool $12m, with a further $5m in stock. Nice.

Another company that’s bet the farm on the open source horse is Symbian, which this week said it has completed the move to open source its software platform, effectively giving “billions of dollars” worth of code away for free. The move will likely see Nokia embrace open source software for the mass market, giving it something to go up against Google’s own Android platform with. To further this end, the Finnish company recently made its Ovi Maps navigation service available for free and this week said it has already racked up over 1.4 million downloads, of which one million within the first week.

At the recent re-launch of Ovi Maps in London, Anssi Vanjoki, executive vice president at Nokia, indicated that, in the long term, Nokia hopes to gain greater revenues through the widespread adoption of Ovi Maps as a contextual platform for mobile applications, which will, of course, be sold through the Ovi store.

Location is clearly an asset that players in the telecoms space expect to leverage, and it’s long been said that operators have the upper hand here. Estonian operator EMT clearly thinks so. The firm said Wednesday that it has completed field trials of A-GPS technology embedded into the SIM card, allowing location based services (LBS) to be deployed to legacy handsets.

EMT has been testing technology from Luxembourg-based startup BlueSky Positioning, which embeds a GPS antenna and location based applications into the SIM, allowing even 2G handsets to support LBS offerings. The tests were conducted using both GPRS and the old school signalling channel USSD – that’s Unstructured Supplementary Services Data to the uninitiated ‑ for retrieving assistance data in a live 3G network. Apparently, EMT is the first network operator to test a USSD connection for assistance data, meaning that A-GPS apps can be used with mobile phone models that do not even support GPRS.

Argo Kivilo, R&D manager at EMT, said that the tests showed accuracy and time to first fix comparable with “any commercial A-GPS handsets in the market”.

Just the other side of Latvia in Belarus, Telekom Austria’s majority owned mobile subsidiary, Velcom, has been granted a countrywide UMTS license for the bargain price of €9.5m. The respective spectrum was already allocated to Velcom at the end of 2009, and the 3G licence is valid until 2017. The mobile operator, which is 70 per cent owned by Telekom Austria and 30 per cent by Cypriot firm Samauwi Brothers, said the roll out of the UMTS network is in progress with up to ten base stations being upgraded every day.

Acquisitions were the order of the day for UAE-based carrier Etisalat as well, which snapped up the 18 per cent of Atlantique Telecom that it does not already own. Etisalat paid $75m to take its holding in Atlantique to 100 per cent, thereby securing majority shares in seven telecommunications organisations across the Ivory Coast, Benin, Burkina Faso, Gabon, Niger, Togo, and Central Africa Republic. Etisalat operates Atlantique via a ten year management contract ending in 2015.

Sticking with management contracts but shifting region, UK carrier BT must be feeling like its gone back to 2001, after it announced a five year, multi-million pound managed services agreement to run O2’s mobile and fixed core networks. The deal will see BT Wholesale consolidate O2’s mobile and fixed core networks onto its next generation 21st Century Network (21CN) platform, allowing the mobile operator to deliver a range of next generation services, better cope with the explosion in mobile data usage, and better compete with, er, BT.

Hoping to exploit the explosion in mobile data usage however is O2’s local rival Vodafone, which is courting the developer community with Vodafone 360, its social media interface and aggregation platform. The operator said that more than 7,000 apps have so far been made available to customers across eight European markets in the three months since the service launched. By March 2010 the operator also expects to have shipped two million Vodafone 360 capable handsets, with the platform featured on some 50 different handsets.

To keep up momentum with the developer community, Vodafone will hold its first 360 Developer Conference at Mobile World Congress in Barcelona on February 15 (it’s creeping up isn’t it?). The conference will feature interactive discussions on developer topics, providing tips on how to create and publish apps across Vodafone 360 devices, with developers given the opportunity to audition their apps and be rewarded with prizes

With its 360 strategy, the carrier is looking to avoid becoming a bit pipe provider by tapping into what it hopes will prove a lucrative value added service and application revenue stream by acting as the gatekeeper. But it has been questioned as to how this strategy, first pioneered by former CEO Arun Sarin around own-branded handsets, will sit with those giving the power to third parties, such as Vodafone UK’s recent launch of the iPhone.

Take care

The Informer


3 comments

    • Avatar ikem charles apache 25/03/2010 @ 11:40 am

      Live ur life, much of just rebranding to be done to Zain but the spirit remains Saad’s.

  1. Avatar ikem charles apache 25/03/2010 @ 11:37 am

    Saad was truly a leader that believed zain could wether the storm after the much needed expansions but the owners think otherwise.He has places to go and i wish em all d best. HOUSE OF LOGIC,Nigeria

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