Company Description and Market Analysis
The company under consideration is Etisalat – a leading telecommunications operator of the United Arab Emirates (UAE) and one of the largest and most influential corporations in the Gulf Cooperation Council. It was founded in 1976. Based in Abu Dhabi, UAE, it managed to expand to the whole country as well as neighboring states by creating subsidiaries in Egypt, Sri Lanka, Pakistan, Afghanistan, Benin, Morocco, Mali, Gabon, and other states.
All in all, it operates in 17 countries across the Middle East, Africa, and Asia, thus growing into the twelfth largest telecommunications operator in the world. Also, it has almost 200 roaming contracts across the globe. Nowadays, the company is public. However, initially, it was created as a joint-stock company with 60% of stocks owned by the UAE government and 40% belonging to local partners. It employs 39508 people in 17 countries and its sales make up $14.26 as of May 2017 (Etisalat on Forbes list 2017).
As for the customers, Etisalat provides services to 11.6 million residential customers as well as more than 300 thousand UAE enterprises and governmental customers, not to mention those served outside of the UAE (Company profile 2017). Its market share is constantly increasing, varying from 20 to 60% based on the country of operation. The company’s website is http://www.etisalat.ae/nrd/en/index.jsp (Etisalat 2017).
Etisalat specializes in providing media and communication services, including contracting and consultancy services necessary for guaranteeing proper operation of the telecommunication networks. These services are provided to both national and international customers as well as international telecommunications companies (Etisalat on Forbes list 2017). Its main competitors are Vodafone, AT&T, Three Mobile, and Telenor. They are a significant threat to the company’s operation due to their impact in the global telecommunications sphere, not the internal industry. Speaking of the company’s management structure, it has seven executive officers (senior management) who are responsible for governing the work of departments and medium managers. The company is the hierarchy of management.
Finally, it is essential to point to the increased role of innovations in the company’s operation. It can be explained by the fact that its mission is to create modern networks and expand the scope of using technologies in everyday life. Nevertheless, there is no manager directly responsible for innovations. Still, this function can be connected to the work of the chief technology executive.
Innovation Framework, Policies, and Strategies
In Etisalat, special attention is paid to innovating services offered to its customers regardless of the country of the company’s operation. The most common innovations involve launching 3G and 4G networks in most of the states covered by the services. Another common innovation is the introduction of cloud services aimed at virtualizing the work of the company’s networks (Etisalat partners with Canonical to deploy NFV Telco infrastructure 2016). Still, these steps were motivated by the need to avoid being outperformed by competitors that all upgraded their networks as well and keep up with the times.
In addition to 3G and 4G networks, there are some impressive innovations introduced by the company to consider. One of the novelties is the joint project with Visa aimed at enhancing customer experience in digital payments.
It is referred to as connected commerce. It is also known as mobile commerce or simply m-commerce. The major objective of the project is to promote the use of the company’s mobile wallet as well as applications and platforms connected to it to make the digital payment-related customer experience more pleasant and easier. The scope of the innovations is fantastic, as projects are implying the embodiment of connected commerce into cars, so all payment operations – from snacks to fuel – can be completed without leaving the vehicle. This project is named Connected Car (Visa and Etisalat showcase the future of ‘Connected commerce’ to mark UAE innovation week 2015).
The innovations mentioned above are the integral element of the UAE’s National Innovation Strategy. It is paramount to point to the fact that due to the support of the UAE government, as well as the company’s impressive success in financial outcomes, it is possible to allocate funds necessary for bringing this fantastic idea to life. Still, the desire to innovate the country as a whole and make it more competitive is not the only reason for focusing on launching such fantastic projects.
Instead, it is generally believed that innovating economies is one of the ways to foster economic development. From this perspective, special attention should be paid to all sectors of the economy, so the telecommunications industry cannot be an exception to the overall innovation trend. Also, the focus is made on innovations due to several significant benefits they offer. Some of them include the increased opportunities for attracting new customers and making the existing ones more loyal because innovating activities inevitably lead to expanding the scope of the offered services as well as decreasing their prices (Etisalat: innovative customer service makes them Egypt’s leading mobile telecoms provider 2017).
Finally, innovations are inseparable from building capacities in both national and international business environments, so it is possible to encourage the development of the telecommunications sector as a whole not to mention the chances of becoming a more powerful company (Ugwu 2015).
Based on the details regarding the innovation projects, it is obvious that Etisalat generates customer experience innovation. The rationale for this statement is the recognition of the focus on improving customer experience by the senior management of the company. It is true in the case of all innovations – 3G and 4G networks, connected commerce, and cloud services – because all of them were introduced keeping customers in mind. Still, there is another approach to viewing these innovations. It is known as service innovation. However, a customer – and, therefore, their experience while consuming the offered services – remains at the heart of the innovative process.
More than that, it is imperative to consider that the mentioned innovations were not introduced in isolation from the other industries or operations of competitors. It means that innovations are the result of interactions, and they evolve based on the needs of the country as well as the desire of the company to minimize the risks of being outperformed by competitors. These statements are the main provisions of the evolutionary theory of innovations (Godin & Vinck 2017). It applies to Etisalat because the main sources of innovation are the needs of the UAE national development priorities and the operation of powerful rivals.
Finally, it is essential to focus on the innovation strategy deployed by Etisalat. One of the elements of the strategy is intellectual property rights, the company reserves all rights regarding the specificities of services as well as all information provided on the website. These rights are protected according to the provisions of the UAE and international legislation. One of the common ways to protect these rights is by signing contracts with end-users of services. Another common element is value capturing. In the case of Etisalat, the main focus is made on capturing customer value – making them more loyal. Except for it, no other value capture strategies are deployed. Green innovations and innovation offshoring are not practiced. All in all, the foundation of the innovation strategy is the desire to comply with national innovation policies and strategies. Therefore, the innovation process is financed from different sources, including public and private investments.
Based on everything that was mentioned about Etisalat and its specificities, there are several significant outstanding features of the company and its operations. First and foremost, regardless of having no senior manager designated specifically for driving innovations, the company is successful at implementing innovative projects. More than that, they are launched and supported not only in highly developed and innovative states (for instance, the UAE) but also poorly developed ones, such as Pakistan, Sri Lanka, and others.
Here, it is essential to clarify that the level of development is poor from the perspective of telecommunications technologies only, as no other aspects are taken into consideration. Also, even though the company is not owned by the UAE government, it still focuses on the national innovative development strategy as a plan of action and a framework for making vital decisions. More than that, one of the most impressive features is that it introduces fantastic innovative projects, such as Connected Car, as well as manages to offer network services of exceptional quality in technologically poorly developed states. All in all, what is liked the most is the strive of the senior management to enhance the customer experience when enjoying the services offered by the company and paying special attention to all users regardless of their national and economic background and well as the scope of needs of operations.
All of the specificities mentioned above are the major strengths of Etisalat that may be used as guidelines for other companies interested in becoming more innovative. In this case, the main attribute is the focus on the end-user of the services, as it may be helpful for any company without regard to its financial and human resources as well as popularity at the national or international market.
Nevertheless, regardless of being successful and innovative, there are still some recommendations to consider. For instance, the company should pay attention to allocating funds in upgrading networks outside of the UAE. The main idea is to maximize launching 4G networks where possible because it would make the company more attractive compared to other providers that do not offer such benefits. Furthermore, it is advisable to focus on the further development of the connected commerce initiative. Even though the company already introduced the Connected Car concept, it is recommended to make the mobile-based payment experience flawless first by developing all necessary applications needed for the successful launch of the virtual mall and then shift to vehicles.
Company profile 2017. Web.
Etisalat 2017. Web.
Etisalat on Forbes list 2017. Web.
Godin, B & Vinck, D (eds.) 2017, Critical studies of innovation: alternative approaches to the pro-innovation bias, Edward Elgar Publishing, Northampton, MA. Web.
Ugwu, P 2015, ‘Etisalat promises more local innovation in telecoms industry’, Nigeria Communications Week. Web.
Visa and Etisalat showcase the future of ‘Connected commerce’ to mark UAE innovation week 2015. Web.