As technologies become increasingly complex and industries continue to converge, ICT partnerships and international alliances with technology providers become ever more critical. Kuwait’s ICT sector is at the forefront of the privatization initiative and the country’s desire to become a diversified economy. Dr Ahmad Salih, CEO of Gulfnet, one of the largest and oldest Kuwaiti ICT providers, looks at his nation’s progress, and Gulfnet’s role in Kuwait’s technological rise.
Many people speak about the possibilities and advantages of a further-unified GCC, on the road towards a common market. As the leader of one of the first ICT companies in Kuwait, what opportunities do you see for your business with this greater integration?
Gulfnet was the first company to bring the internet to the GCC region, shortly after the liberation of Kuwait in 1992. I think there are significant advantages by creating a cooperative mechanism between the GCC countries. Everyone has been speaking about the experience of the European Union. The GCC, established in the 1980s, is a cooperation council of six countries. There has been much cooperation but there are several aspects that remain to be developed, namely economic ones.
Now and again the Gulf politicians bring up items for collaboration, such as creating a common customs union. This is one of the more advanced aspects of the cooperation – unifying the customs fees and system. That level is yet to be seen in other aspects of the economies, such as the telecom sector.
There has been a new initiative in the past few years, where GCC nations have established a common electricity cable throughout the GCC. Due to the development of technology, that same cable which is carrying power can also carry communications, which is our current goal. This is one example of a step in the right direction, but a lot needs to be done, especially within the private sector.
Recently, the Kuwaiti parliament approved the creation of the Telecom Regulatory Authority, which is a welcomed development, because this is something that Kuwait lacks. Other Gulf countries have such an authority and Kuwait does not. Fortunately it will soon be operational.
Perhaps if we can unify the interconnection fees within the GCC, that will give all of us a competitive advantage. For example: if you’re a company in the Far East, and you want to reach Iraq, it would be cheaper for you to go through Saudi Arabia than to go through Kuwait, mainly due to the interconnection cost. This high charge is costing Kuwait a competitive advantage. The world is becoming more competitive in both the public and private sector today. One critical example is the ICT sector.
I would like to highlight on that because Kuwait was the first GCC state to break the single operator monopoly. At Gulfnet you have many competitors within your sector that are getting global partnerships, so what are the next steps for you?
I think the level and frequency of developments in ICT is something that you do not see in any other industry; and this is mainly because of the significant changes in technology. As companies are continuously trying to accommodate these changes and provide new technologies for the market, it is simply not economically feasible to do it yourself. You must partner with the global companies that create these technologies.
Just a brief history of Gulfnet: when we started we were an internet service provider (ISP). To me, this label no longer reflects what we actually do today. We are more of an ICT company. In order to execute that transformation, you can’t do it alone. The changes in technology are significant, which you have to obtain through partners. In that sense, Gulfnet is unique.
Today we are competing for bids in projects where we don’t see the other traditional ISP competition. As you mentioned, it is because of the partnerships we have and the expertise we have built over the years. Today we have a range of partnerships of global companies and we work strategically with those companies to face the market and provide advanced solutions together. So, the value we are giving to these global companies is our knowledge of the local market and business culture. Here in Kuwait, you don’t necessarily capture business because you have the best offer in terms of quality or price. Your local network of relationships is equally important, and we at Gulfnet are very well positioned in that regard, and our vision is very clear.
Your clients are quite diverse, from individuals to SMEs to large corporations. How do you approach this diverse task through partnerships?
Our clients are diverse, and the solutions they require are equally diverse. In this part of the world, we don’t create the technology, so we rely on our partnerships with global technology creators to bring innovative solutions to the local market. As technologies continue to get complex and as industries continue to converge, partnerships and alliances with technology providers become more critical for us.
How do your business operations and your goals fit into the national plan for Kuwait’s technological advancement?
As we were the first to bring internet to the region, we were also one of the first to provide ICT turnkey solutions. If you look at other companies in Kuwait, you will see many that provide internet connectivity, others that are system integrators providing the hardware, the servers, and the IT services. What we did here at Gulfnet is we have developed ourselves over the past few years to provide all of this as a one-stop shop for a wide range of ICT services. And the technology that is available to today enables us to grow in this direction. We are not aware of a national plan for technological advancement and how we, and other companies in our industry, can fit into such plan. However, we have proactively introduced new technologies to the market. For example, two such technologies that we are actively pursuing are private cloud solutions and network security.
What is your take on SMEs, the targeted focus as the engine for global growth, in Kuwait?
Today we see many young entrepreneurs in Kuwait that we did not see several years ago. Technology is enabling these young people to advance their businesses. With today’s technology sometimes you don’t need a commercial place to rent in order to operate a business. All you need is an Instagram account. People are making significant money because of this. I’m very glad to see young Kuwaiti people gravitate towards this. Small business is evolving here in Kuwait. In order to cater for such phenomena, we have recently created a small division to specifically handle these opportunities and focus on the small business market.
We have a plan to approach the relevant governmental body to explore how we can help these entrepreneurs fulfill their IT and communication needs. Two years ago, the government of Kuwait had a plan to dedicate KD2 billion ($6.6 billion) to support Kuwaiti small businesses. I am not sure if this budget has been expensed but this gives an indication that the government is starting to understand the importance of small business for the local economy. What we want to do is to support this sector by communicating to the market that we are the one-stop shop for all the technology and communication needs of a small business. We can bring in the IT and communication services to small businesses without the need for having to invest in their own infrastructure. Furthermore, we provide these small businesses with flexible payment terms, enabling them to focus on their business and their growth.
You have spoken on the importance of information security, through the participation of Gulfnet at the Gulf Information Security Expo and sponsoring the Kuwait Information Security Forum. How do you establish this guarantee across your platforms to give your diverse clients peace of mind?
We have partnered with two leading global providers of information and network security in order to provide these technologies to the market. However, we have some challenges in marketing these services here in Kuwait. It seems that the people who are responsible for IT services, whether in the public or in the private sector, are yet to fully realize the danger of having an unsecured network. Western countries are far ahead of us in this regard. Therefore, we have realized that we need take the time and make the efforts to educate the market on information and network security. For example, we are currently doing this with the banking sector, which is obviously an important target market for us simply because of the sensitive information that banks hold.
In the future, even household appliances, such as your air conditioners and fridges, will be connected to the internet. You will be able to monitor these devices remotely from anywhere. The danger is that your information can be exposed. Other people might be able to obtain your information. It may not be critical if someone knows if you’re out of milk in your fridge, but it is if someone knows what’s in your bank account. So information and network security are critical and institutions of all kinds need to realize that this is a serious threat.
You have talked about how Gulfnet is an educator and a pioneer having so many firsts within this sector. What is Gulfnet’s role as a unifier and bridging the gap of communication for Kuwait and the Gulf? What is the future for Gulfnet in this regard?
We follow a strategy of transformation. We want to transform ourselves from an internet service provider to what is known as a managed service provider. This is our vision and we are taking steps towards the realization of this vision. We are aware of the changes in the technology sector and we seek to align ourselves with this sector so that we can grow. It is difficult to have long-term visions in the ICT sector due to the rapid technological advancements. Therefore, we are focusing on short and medium-term goals to take advantage of the technological advances and constantly look around for potential opportunities. Today we are doing business that we probably could not have imagined a few years ago, and this gives you an indication of how rapidly the technology is moving. Again, I will emphasize partnerships and alliances with technology providers if we are to keep up with these changes.
The competition within the telecom sector here in Kuwait is very fierce, and it is hitting everyone’s profit margins significantly. Many might think that this is to the advantage of the consumer. However, when considered holistically, this may not be quite the case. When businesses, particularly service providers, have lower profit margins, they tend to curtail their operations, which usually results in some level of degradation of the service provided to consumers. Therefore, such kind of competition, what I call ‘negative competition’, may not benefit the users on the long term. We hope that the Telecom Regulatory Authority, which should be operational soon, will play a positive role in regulating the market and insuring fair conditions for competition in Kuwait, as well as bridging any existing gap.