ITU-D Regional Workshop on Strategic Management - Part 1 Cairo, Egypt 19 -22 December 2005

1. ITU-D Regional Workshop on Strategic Management-Part 1 Cairo, Egypt 19 -22 December 2005 Guest Country Paper QATAR Regional Workshop, Cairo- Egypt

2. Qatar Telecom (Qtel) Current situation, Challenges for the incumbent operator ahead of competition, Regulatory issues Regional Workshop, Cairo- Egypt

3. CONTENT • Country Profile • Qtel-Current Status • Challenges • Competition is imminent, are we ready? • Regulatory Framework Regional Workshop, Cairo- Egypt

4. Country Profile State of Qatar • Population : 760,000 • Pop. Growth : 6% (2003) • GDP/capita : US$ 26,900 (2002) • GDP Growth : 7% (2005 est., EIU) • Member of WTO since 1996 • Booming Economy Regional Workshop, Cairo- Egypt

5. Qatar State of Qatar Regional Workshop, Cairo- Egypt

6. Qatar Telecom- Qtel (1) • Sole provider of public telecom services till 2013 (Law 13, 1998) • Privatized Jan 1999: • Government- 55% • IPO-residents & GCC-45% • Services: • Fixed telephony-national & international • GSM Mobile- prepaid and postpaid • Data services • Internet- dialup, ADSL • Cable TV • Paging, PMR Regional Workshop, Cairo- Egypt

7. Qatar Telecom- Qtel (2) • Employees : 1750 • Penetration: • Fixed : 26% (2005) • Mobile : 65% (2004) • ADSL :2.6% (2005) • ARPL : US$ 76 (2003) • ARPU (blended) : US$ 79 (2003) Regional Workshop, Cairo- Egypt

8. Qatar Telecom- Qtel (2) Regional Workshop, Cairo- Egypt

9. Qatar Telecom- Qtel (2) Regional Workshop, Cairo- Egypt

10. Qatar Telecom- Qtel (3)Revenue Growth Regional Workshop, Cairo- Egypt

11. Qatar Telecom- Qtel (4)Qtel’s Share Performance Regional Workshop, Cairo- Egypt

12. Challenges (1) • Country committed to liberalization • Regulator established in 2004 • Rapid population growth • Customers expectations / requirements • New technologies • External expansion • Booming economy • Asian Games 2006 • Geo-political situation Regional Workshop, Cairo- Egypt

13. Challenges (2) Customer Expectations Regional Workshop, Cairo- Egypt

14. Challenges (3) New Technologies • 3G Mobile • WiMax • Next Generation Networks (e.g.NGDLC) • IP-based networks/Services Regional Workshop, Cairo- Egypt

15. Challenges (3) Booming Economy • Large Gas & Petrochemical Industries • Huge constructions (Pearl, Sport facilities, Towers, Complexes) • Large Corporate Customers: 12 new universities, new medical city, etc • Qatar Foundation • E-Government Regional Workshop, Cairo- Egypt

16. Challenges (3) Regional Workshop, Cairo- Egypt

17. Challenges (3) Regional Workshop, Cairo- Egypt

18. Challenges (3) Regional Workshop, Cairo- Egypt

19. Preparing for Competition • Restructuring Program • Rebalance Strategic Priorities • Explore Competition Scenarios • Work with the Regulator/Government Regional Workshop, Cairo- Egypt

20. Preparing for Competition (1)Restructuring Program (Q-Turn) Regional Workshop, Cairo- Egypt

21. Preparing for Competition (1)Restructuring Program-Q-Turn (2) Main Themes: • Create a Professional Business • Organizational redesign & internal /external recruiting • Fundamentals for high performing team • Qatar’s employer of choice • Strong performance culture • Earn Customer Loyalty • Better segmentation and pricing • Superior quality of products and services • Customers enjoy interacting with Qtel • Regional recognition as a customer-oriented telco or utility Regional Workshop, Cairo- Egypt

22. Preparing for Competition (1)Restructuring Program-Q-Turn (3) • Strengthen Financial Structure • Optimize equity structure and balance sheet • Full utilization of assets • Strong Qtel share • Capture Growth: • Push boundaries in Qatar & new markets • Leader in reshaping regional telecom sector • Achieve first class Operational Efficiency: • Boost performance • Re-engineer key processes • Outperform in benchmarking effort • Prepare for competitive pressure Regional Workshop, Cairo- Egypt

23. Board CEO Group Finance Group Strategy Group Communications Group HR General services Wireline Services Wireless Services Special businesses Finance HR Finance HR Finance HR Finance HR IT QCV Network Network Building & eng. services Pay-phones Marketing Product mgmt. Support services Yellow pages Sales Corporate wireline Customer service support Directory assistance Residential wireline Accounting services Maritime radio comms Personnel services Preparing for Competition (1)New Structure (2003) Regional Workshop, Cairo- Egypt

24. Preparing for Competition (2)Rebalance Strategic Priorities BEFORE Degree of focus Strategic Priorities Approach in the base case • Push financial performance as hard as possible • Financial performance • Make the investments necessary in people to maintain performance in a saturating market • Human Resources • Do enough to get by – make enough improvements to minimise noise • Customers Maximum Regional Workshop, Cairo- Egypt

25. Preparing for Competition (2)Rebalance Strategic Priorities (Cont.) AFTER Degree of focus Strategic Priorities Approach in the base case • Push financial performance as hard as possible • Financial performance • Make the investments necessary in people to maintain performance in a saturating market • Human Resources • Do enough to get by – make enough improvements to minimise noise • Customers Maximum Regional Workshop, Cairo- Egypt

26. Regulatory Framework • The Regulator: The Supreme Council for Information and Communication Technology (ictQATAR), chaired by the Heir Aapparent of Qatar • Established by Decree 36 of 2004, officially launched may 26, 2005 • Mission: • Regulate ICT sector in Qatar • Develop a national strategy for ICT • Formulate ICT policies • Coordinate all initiatives to achieve ICT strategic vision • Create legal and regulatory environment • Contribute to programs and studies related to ICT • Follow-up, evaluate, measure & develop ICT sector • Represent Qatar internationally • Over 150 initiatives identified Regional Workshop, Cairo- Egypt

27. Regulatory Framework (2) • Over 150 initiatives identified • State of the art infrastructure: • Broad band for all, “Mobile Neighborhood • QoS monitoring • National Data Center • Innovation & capability building: • ICT ventures • ICT R&D • Job market stimulation • Regulatory & Legal Framework: • Telecom sector deregulation • USO • Cyberspace regulations • Sectoral programs: • E-education • E-health • E-finance • E-tourism and sport Regional Workshop, Cairo- Egypt

28. Regulatory Framework (3) • 3 models for ICT initiatives: • Owned Project – ictQATAR owns the initiative end-to-end and takes a project management approach • Sponsored Project – ictQATAR sponsors the initiative, but management is the responsibility of an independent steering committee with joint participation by the Council and the concerned ministry or government agency • Supported Project – ictQATAR supports the initiative with technical inputs and assistance as needed, but a ministry or government agency manages it Regional Workshop, Cairo- Egypt

29. Regulatory Framework (4) • In a way similar to Singapore model • A regulator AND enabler • Initiatives: Broad band for all, Connect Qatar, State of the art infrastructure • Qtel-ictQatar partnership: • Free trade • Infrastructure • QoS monitoring • Frequency management • Sector modeling • Liberalization approach Regional Workshop, Cairo- Egypt