“The new management has set a three-year period, after which the company will post profits,” says Rezzvi.
KARACHI: Wateen Telecom’s income statement may not seem impressive as of now, but the ‘new’ management, which took over in December 2010, is confident that it can turn the company into a major player, and turn around the books as well.
“By January 2014, Wateen will be a major player in the market,” the company’s Chief Transformation Officer Asad Rezzvi recently told The Express Tribune. “Wateen is going to stay,” he reiterated, responding to a question asking whether back-to-back losses would push the company to make an exit from the Pakistani market.
“We have set high-value targets to give direction to growth and move away from bleeding money,” the optimistic CTO said. “The new management has set a three-year period, after which the company will post profits,” he said.
Rezzvi is one of the key officials involved in the internal restructuring of a company. The management especially created the CTO position to accommodate Rezzvi’s expertise – he brings with him a vast experience in corporate reengineering in both national and international industries.
Based out of Lahore, Wateen is a venture of the Abu Dhabi Group, which also owns Warid Telecom. The WiMAX giant – which deploys the country’s largest network of fiber optic and covers 22 cities – entered the Pakistani market in 2007. However, it has been reporting back-to-back losses in the past years. Wateen has yet to report its first profit since its listing on the Karachi Stock Exchange in May 2010.
The company reported a net loss of Rs1.3 billion for the quarter ended September 30, 2011 – the latest period for which data is available. The profits were lower by 327% from the Rs317 million reported in losses in the corresponding period of the preceding year. Revenues for the same quarter clocked in at Rs1.6 billion, down 11% from Rs1.8 billion from the corresponding period of the preceding year.
For fiscal 2010-2011, the company closed its bottom line with a net loss of Rs4.98 billion – up 146% from the Rs2 billion loss it reported in fiscal 2009-2010. This is what the new management is working to fix.
The company has since made several layoffs because it was grossly overstaffed and had scores of managerial issues. The company’s board of directors has brought in a new managerial team, led by CEO Naeem Zamindar, to fix internal problems.
“The old management had a rigidly bureaucratic way of doing things, and the level of trust among staffers was zero,” Rezzvi said. “People were working in silos: instead of achieving goals, they were trying to protect their jobs,” he added.
The new management has fixed these problems and rebuilt trust among employees. “We developed an outcome and action plan; we decided that change was going to be a part of everything we do at the company, every day,” Rezzvi said.
The senior management has ensured end-to-end responsibility and eliminated redundancies, making sure employees are rewarded according to their abilities. Under the new management, Wateen has also moved towards a more open culture.
“We knew that if we give opportunity to talented people, they would deliver. That has already started to happen,” Rezzvi said.
“Reengineering a business is a much more difficult task than building a new one,” Rezzvi continued, explaining why the company is taking so much time to report profits.
“The new management inherited debts from the old one: the first two to three years, therefore, have, and will be, slow in terms of growth,” he added. Wateen’s net current liabilities on September 30, 2011 stood at Rs17.6 billion. The company also received a financial injection of Rs1.6 billion from shareholders in long-term finance during the quarter. “Even if we become profitable as an organisation, we will need to service these debts first,” Rezzvi added.
Wateen has been growing in the enterprise segment but WiMAX remains a challenging area, says Rezzvi. “The Pakistani market was not ready for WiMAX when Wateen launched,” he said. “The market did not respond as we expected.” The company has now overhauled the WiMAX business model and its operations to reduce costs and improve services.
Published in The Express Tribune, January 9th, 2013.
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Wateen Telecom
Our telecom., sector has faced crooks like prepaid card KSE listed company CallMate share holders are still shedding tears with no answer from SECP, SBP, KSE and NAB why about the prepaid cards of Pakistan's leading company disappeared. Wateen Telecom spend tons of money on IPO, advertising/promotion and now we hear about the debt's of the company. The case of CallMate should be re-examined/opened by the respective judicial authorities, and the huge expenses which are in dowry of Wateen and accountability of incurring advertising campaigns amounts of millions with resultant business gains. Is the advertising effective resulting in market share, orders, or commissions, royalties paid to advertising agencies. Pakistan is a role model of development/growth in the telecom., sector translated by FDI's and infrastructure development, and benefits to the consumers. Wateen is now a purely Pakistani company, fully accountable to consumer on the issue of Digital Divide accessibility to internet at reaonable cost, and the Government should not tax the internet services with any taxes, federal, local, or levies/charges etc. Broadband Commission at ITU Geneva is committed to provide more Landing Point Access to member administration, with lowest cost of sub-marine/under sea cable which can be reduced to 25% what is today, was quoted by Broadband Commission at the World Telecom 2012. Wateen Telecom can make bumper profits if it has more landing points with the Wimax Technology.