Etisalat creates special post to oversee operations

A new chief executive takes charge at Etisalat, but the company faces trouble both at home and overseas.
Etisalat appointed Ahmad Abdulkarim Julfar as group chief executive. AP Photo
Etisalat appointed Ahmad Abdulkarim Julfar as group chief executive. AP Photo

Etisalat has appointed a new chief executive to steer the UAE's largest telecommunications company as it gears up for increased competition.

Abu Dhabi's biggest listed company appointed Ahmad Abdulkarim Julfar as group chief executive, a new position created to oversee the markets in which the company operates. Mr Julfar was formerly chief operating officer.

"We're now in 18 countries and it requires a person who can travel and handle all of this, who can synergise what's happening with all our current markets … including the UAE," said an Etisalat spokesman.

Mohammed Omran would stay on as chairman and Nasser bin Obood would remain the chief executive of Etisalat's operations in the UAE, he said.

Etisalat's shares rose 0.49 per cent to Dh10.20 in trading on the Abu Dhabi Securities Exchange, the biggest mover during the day's trading on the capital's exchange.

The new leadership role comes as Etisalat prepares for changes in the UAE telecoms market.

Etisalat's efforts to counteract the lost revenue at home with international expansion have run aground in a number of markets. In the UAE, Etisalat faces the prospect of losing market share to du, as plans for shared access to broadband and television networks are rolled out nationwide.

Despite the company's recent growth in revenues, Etisalat stands to lose a significant proportion of its market share in the Emirates, said Chandresh Bhatt, a financial analyst at Global Investment House.

"To stay afloat in competition they'll have to compete hard, and to compete hard they'll have to come up with new packages and new ideas," he said. Penetration rates of telecoms services in the UAE were already high, Mr Bhatt said.

There were 1.7 million fixed-line phone lines in the country in May, according to the latest statistics from the Telecommunications Regulatory Authority.

Since ending Etisalat's monopoly in 2007, du accounted for 623,600 of fixed-line subscribers in selective areas of Dubai where it operates, and slightly less than half of the UAE's mobile-phone subscriptions at the end of June.

Etisalat had looked overseas to counteract slower growth in the UAE, but its international strategy has stalled in a number of countries.

In India, Etisalat has become mired in a scandal over Etisalat DB, a joint venture it established alongside DB Group, an Indian conglomerate.

Indian authorities arrested the vice chairman of Etisalat's joint venture in February.

At the start of this month, Majestic Infracon Private, which is controlled by DB Group and owns the remaining shares in the joint venture, withdrew a petition filed against Etisalat before India's Company Law Board.

In the Middle East, Etisalat walked away from a $12 billion bid in March to acquire Zain, the Kuwait-based telecoms provider, after failing to complete due diligence on the takeover. Etisalat also cited the region's political unrest and Zain's divided board as a factor.

Meanwhile, the company's plans to expand into Syria have been derailed by the country's civil unrest, causing Etisalat to pull out of bidding for a mobile licence in March. Etisalat said in June it may make a fresh bid if the terms were right.

Published: August 25, 2011 04:00 AM


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