How has the telecom sector evolved over the past few years and what do you think is its future?
Mobile communications have become omnipresent these days thanks, in large part, to the introduction of mobile services after the war. This decision was deemed the only sufficient way to close the technological gap. Individuals, families, and business rely on mobile communications for their personal and business needs. This same development needs to happen for data services; we need to make the next jump into the 21st century. The technology maturity curve is different from country to country and market to market, and it is largely dependent on government strategy. For example, 3G/4G has become the backbone in mature and developed markets in which the government chose to make the technological jump. However, here in Iraq, we are preparing for 3G. It is not technology that drives the future. The future is driven by vision and innovation; technology is just a tool to achieve it.
So, with all of that in mind, I would like to restrict the scope of this question to Iraq only. 40% of Iraq’s population is less than 25 years of age. Therefore, the future lies in providing services for this segment, which will soon join the mainstream economy. Moreover, Mobile Money has a big future in Iraq. More than 85% of Iraqi’s have a mobile phone but less than 10% of them have bank accounts. The convergence of mobile communication and financial services will open up a huge opportunity for new services and products. Mobile Healthcare and Mobile Education also have very big potential.
Korek is the fastest growing mobile provider in Kurdistan. What are the company’s plans to continue that rapid expansion?
Just to rephrase the statement in the question, Korek is actually the fastest growing operator not just in Kurdistan but in all of Iraq as well. As of the completion of the First Quarter of 2013, we had close to 4.8 million subscribers. We will continue to build on the momentum of 2012 and will invest in expanding both the coverage and capacity of our network.
I would also like to add that we are not just talking about expanding coverage. We are equally committed to providing the best quality of service for our customers no matter in which part of Iraq they might reside. We take this commitment very seriously. For example, we recently engaged an independent 3rd party to conduct a network quality audit of Korek, which was conducted by comparing our services to those of our competitors. I am extremely delighted and proud to share that, based on this independent audit, Korek has the best network quality in Iraq.
How has the company been so successful here in the Kurdistan Region?
Our market share across Iraq is roughly 16-17%. We have always worked with the guiding principles that customers come first and that we are the best network for both overall services as well as value. We are also heavily investing in expansion of our network and our call centers to handle customer concerns.
Korek has been in operation since 2000. However, until 2007, our license limited our business to only Kurdistan Region. We expanded into rest of Iraq only the last 5 years. Thus, we are historically strong in the Kurdish Region. However, we do not look at ourselves as a regional or niche player. Our sights are set on the entire Iraqi market. Most of our growth is going to come from the untapped region in the center and south of Iraq. As I mentioned earlier, we have done 3rd party network audit and have found that the quality of our network is way better than our competitors. Our offers like Tedalal have been hugely successful in Baghdad and Basra.
What are Korek’s growth targets and overall goals for 2013?
Before talking about 2013, it’s important that we look back at the achievements of 2012. We had a phenomenal year in 2012; our network now serves our customers in every part of the country. We achieved a revenue growth of 27% Year Over Year (YOY) and our customer base has grown 34% YoY, which translates to over 1 million new customers who are now enjoying Korek services. These results make us the Fastest Growing Mobile Operator in Iraq and put us way ahead of our competitors.
For 2013, we will continue to maintain the momentum of 2012 and focus on key areas in the center and south like Baghdad, Basra, Najaf and Karbala. In our historic strong holds, we will continue to expand capacity so we keep offering the best value and the best services to our customers. We will also be closely addressing the corporate segment in 2013 in order to meet the growing demands of rapidly expanding services sector in Kurdistan, specifically the areas of Oil and Gas, Construction, and Logistics.
Korek’s business model has not undergone any fundamental change. However, France Telecom’s involvement has helped us learn the best practices from one of the best-known telecom brands in the world.
Have there been any limitations or vulnerable areas that have slowed the spread of mobile phone usage or wireless network implementation?
The development of mobile communications in Iraq has been a success story in the last 10 years. However, Iraq still has a long way to go. Amongst 15 Arab countries, Iraq has the lowest mobile penetration. I think the Mobile Industry as a whole is enthusiastic to go and hit the market with state of the art services and products. However we need additional support in two main areas: market and/or business focused policy development and security.
Has there been any progress in terms of the establishment of a 3G network?
We are ready to launch 3G. Our network and systems are 3G capable. However, the lack of clarity and a clear time line on the issuance of the 3G licenses is stopping us from offering these high-speed services to our customers. Our customers are also eagerly waiting 3G coverage, as they want to experience high speed mobile internet. We hope to get some clarity on 3G license by the end of 2013.
How has the involvement of Agility and France Telecom (FT) impacted Korek’s business model?
Korek’s business model has not undergone any fundamental change. However, France Telecom’s involvement has helped us learn the best practices from one of the best-known telecom brands in the world. We can leverage this new knowledge on a large pool of internal talent and resources within France Telecom. They have 169,500 employees and 33 affiliates around the world, with more than 15,000 employees dedicated to working on research and innovation. New products can be quickly taken to market because we can rely on the experience of other FT Group affiliates. Our managers and engineers can quickly be trained in new technologies and products by utilizing FT Group’s training and development facilities. We can also rely on group sourcing to getter better and more cost effective offers from our vendors, which will lead to cost savings.