Sharaf Electronics has won the rights to set up and operate Etisalat-branded stores and kiosks in the local market as part of a new distribution arrangement with the telecom major. It comes into effect from this month.
The terms of the agreement also allows Sharaf Electronics to be a nationwide distributor of Etisalat SIMs and recharge facilities, including — from March onwards — ‘over-the-air’ recharge, where the retailer does the topping up on pre-paid subscriptions automatically rather than wait for the subscriber to manually key in a set of numbers each time. Both retail and corporate clients will be tapped through this arrangement.
“Etisalat is intent on growing its network and tying up with third-parties would allow for a faster rollout,” said Nilesh Khalkho, CEO of Sharaf DG, in an interview to Gulf News. “Telecom services distribution is still very much in its infancy in this market and this is where our distribution arm can expect to play a major role.”
“Any issue that is happening in the channel is taken care of by the distribution arm and, in time, this should grow into a significant business for Sharaf Group.”
On whether the Etisalat deal would allow managing any of the operator’s existing retail locations, Khalkho said: “Future possibilities are open at this moment. Getting the distribution rights for their services is the first step and there are other players involved as well.”
The Sharaf Group’s move to expand on the distribution side comes at a time when the smartphone market in the UAE is growing at 60 per cent in value terms, while that of tablets is a staggering 75 per cent. More importantly, these growth rates should hold for this year.
The deeper penetration of smartphones and tablets would mean increased consumption of data packages. This is the transition that will soon be made, according to Khalkho.
“If it was voice and SMS that were driving telecom usage, and it still does to a good extent, the future will be all about data and 80 per cent of telecom service packages built around that,” the CEO said. “Data consumption will first happen on smartphones and tablets because consumers will no longer want to wait until they reach a desktop or open a laptop to do so.
“Structured data servicing is what will happen and it gives us an opportunity to be part of that quite substantial growth.”
Khalkho does not believe that all of the opportunities in distribution arrangements have been taken up by existing players. “Tech, and telecom services in particular, is a field where the new can always come up at any time. Apple is where it is after the iPhone and that’s been around only from 2007.
“There is always a scope that new brands will come in and that’s why we need to be on the lookout constantly.”