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Perspectives: e& – from telco to tech group
546 Plays30 days ago
Hatem Dowidar, Group CEO of e&, joins Nabeel Albloushi, HSBC’s Head of Markets & Securities Services, MENAT, to share insights on the Middle East’s tech landscape and how e& made the shift from telecom operator to global technology group.
Watch or listen to find out more.
This episode was recorded on the sidelines of the HSBC Gulf Cooperation Council (GCC) Exchanges Conference in London on 19 June 2025.
Read more about the GCC conference here https://www.business.hsbc.com/campaigns/hsbc-gulf-cooperation-council-conference-gcc
Disclaimer: Views of external guest speakers do not represent those of HSBC.
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Transcript
Introduction to the Series
00:00:01
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:13
Speaker
Make sure you're subscribed to stay up to date with new episodes. Thanks for listening, and now onto today's show.
Guest Introduction: Hatem Dwader
00:00:23
Speaker
Delighted to have you today on the Perspectives podcast series for HSBC. My name is Nabil Elblushi. I head HSBC, ah Markets and Security Services for Minat. I'm delighted today to have a guest with us, Mr. Hatem Dwader, the CEO of EN, a powerhouse of the telecom in the Middle East region and technology globally.
00:00:49
Speaker
expanding in 38 countries globally. Such a pleasure to have you with us today, Mr. Hadid. Great to be here in the conference and with you, Nabil. ah Great, great.
From Telecom to Tech: Market Shifts
00:00:58
Speaker
So we would like to touch on many areas during our conversation today, but the most and exciting one and that you have been leading is the evolution from a from a telecommunication into technology.
00:01:11
Speaker
I think it would be interesting to understand the journey on that and what has initiated such a move from telecom to technology. So please enlighten us with that. I think that for many years we've seen an evolution of technology companies that have been growing value, have been growing revenues and therefore total return to their shareholders. While telecoms have evolved into being dump pipe in many countries and being a dump pipe or a utility you end up having a very very conservative and ah low growth and i think a good example of this if we look at market caps so 20 25 years ago the top seven ah global technology companies ah were probably
00:02:03
Speaker
in a pie with the top 20 telco operators of the world we're probably representing less than 10 percent yeah today it's the opposite it's these top technology companies in that case you know the regular suspects ah amazon google apple meta and so on now nvidia and you put them next to the top 20 telcos in the world. The top 20 telcos in the world, even combined, are insignificant.
00:02:33
Speaker
So the value has really shifted.
Growth and Investment: Telecom vs Tech
00:02:37
Speaker
Today, in many countries in Europe, you find that a customer can pay, you know, 10, 15, 20 euros for his telco, but he will pay more for his TV subscription.
00:02:50
Speaker
he will pay now for Chad GPT plus or for Gemini will pay another $20. Leave aside gaming. So forget the gaming, you know, gaming can be huge. So all these services are now ah really getting great returns. I'm not saying they didn't invest,
00:03:09
Speaker
But they didn't invest as much as telcos did. Telcos are building these huge data centers, putting towers everywhere, tens of thousands of towers, paying billions of dollars to governments to get the license for Spectrum and then per country.
Telcos' New Strategies: Entertainment and Fintech
00:03:26
Speaker
and then they get the same amount like a technology company that has a global platform that has a scale that is selling their services everywhere so this was becoming more and more more obvious and our thesis is we have as a telco huge customer base that we can sell them a lot of services so we have decided so go and fight in all the adjacencies and get a fair share in these adjacencies. So whether it's entertainment and content, whether it's fintech in the corporate world, cloud, cybersecurity, IoT, and try to grow in these areas. And we've been doing this in the past five years. And, you know, the jury is still out, but we have been delivering good results, which means it's probably working.
00:04:16
Speaker
great Great to hear that. It seems like there is a very compelling synergies between what I see from a technology or from a ah telecommunication into technology.
Targeting Smaller Customers with Digital Services
00:04:26
Speaker
Is it the case as you've seen as you've described it?
00:04:30
Speaker
ah Totally. And I i give ah an example in fintech. I mean, this probably close to your heart as well as HSBC, but, you know, we're looking at maybe different customers than you do because we're looking at ah customers that are sometimes too small to be considered profitable by the banks. But for a fully digital service, they can become profitable.
00:04:51
Speaker
And we were looking at some of the services there. as And as you know, we have ah digital wallets in many of our ah markets and these digital wallets can evolve to do things like buy now, pay later and so on.
00:05:05
Speaker
And we were looking the cost of acquisition of a customer is in the single digit dollars for us. And we were looking in one of our markets to acquire an existing business.
00:05:16
Speaker
And when we looked under the hood, we find their cost of acquisition is above $100. So it's a huge difference. This is a synergy that we can get from being a telco, from having a trusting customer base that allows us to cross-offer the technology. Exactly, to cross-offer them this.
00:05:38
Speaker
Same thing, content. When I give people cable TV through Fiber at Home, I tell them, okay, you get the normal cable TV, but you know what? I give you... a discount on StarzPlay, which is our digital streaming content, or we even give you free StarzPlay if they're getting a big bundle. So I'm able to, again, get the benefit of that scale of that customer base.
00:06:01
Speaker
Indeed, indeed.
AI's Impact on Telecom: Revenue and Experience Boost
00:06:01
Speaker
So look, talking about technology, especially today or lately, a conversation would not be complete without touching on AI. And I think this is an area we would like to explore further. Your thoughts around AI.
00:06:16
Speaker
How is AI potentially playing a role? Are you exploring? How engaged are you in AI? So let's let's also be very clear. I think AI we've been using for several decades.
00:06:28
Speaker
So AI is not new for us. I think AI in its current form or what we call generative and ai Absolutely. That is the new thing. However, AI, we've been using it in multiple things. We've been using it in an our ah customer value management. We've been using AI in parts of our networks for a long while. But now what we see is an ah an evolution of AI in a way that is also much easier to be used by people because you can talk with AI in plain language and ask it for things that are a lot more, you know, almost human in a way. indeed So we have actually hundreds of projects in AI. We actually had to buy a platform and we were one of the first customers
00:07:14
Speaker
of IBM to do that, to buy a platform for AI governance, because we found we had so many things going on that we wanted to track that we are not duplicating, that none of the projects, for example, would ah breach any of the requirements on, for example, data ah security, customer privacy and all so on. So we even have a platform that governs all our AI activities, which are At the moment, the last I looked at it, we were now approaching the 1000 AI projects live at the moment. we
00:07:47
Speaker
There were 960 something. But now I think, you know, probably in the coming few weeks, we'll pass the 1000. So a lot of projects. And as a business, you know, the tendency of people is to try to do things that are more fun.
00:08:01
Speaker
And what we have been pushing to do is tell them, no, I want to see the effect of these projects on my EBITDA. So that every project every project we do in AI now, I need to see either an increase in revenue or a decrease in cost.
00:08:20
Speaker
So we categorize now the, and and there is a third type of projects. where We have some of those as well, which is improved customer experience. So improved MPS. So these are the three parts of projects. So anything else is fun, but it's not really ah priority for us.
00:08:36
Speaker
And we are seeing that some of these things are bearing fruits. We see that ah there are some areas where we started to get some savings behind AI, especially, for example, in energy management in the network.
00:08:51
Speaker
but We see a lot of, you know, ah possibilities now reducing power at night at certain areas, it but switching off sites completely. I mean, using resources in terms of ah some of ah the operations, for example, in Karim, the food and grocery delivery, the way we optimize where the motorbike would pick up the food and deliver it is now completely using the even the suggestion engine in StarsPlay, when you open StarsPlay and say, this is a show that you might like, the accuracy of this is getting better and better because as we understand the customers and relating things together, and relating to other customers, we're are able to use AI in a much better way to understand this.
00:09:36
Speaker
And of course, the chatbots for customer service are much, much better than what they used to be. ah because they understand language a lot more now. it's not They're not perfect yet, but I think we will get to one day where the grand majority of customer service transactions will happen through AI, whether it's a chat AI or even a voice AI, and you will not be able to tell the difference if it's human or or machine. robotics and
00:10:07
Speaker
Advertising, we're able to generate now quick promotional videos in hours compared in the past. It used to take days at a fraction of the cost.
00:10:18
Speaker
And we have already launched a couple of campaigns. We recently did one for E&Money, our wallet in the UAE that was completely designed and ah produced using AI. So none of the people that you see there that look like very real people, none of them are real people. something for us to look at. Something that, you know, so there will be a day when this Podcast will be completely AI. you know it will it It will be our avatars and having this podcast. So these are all things that are happening today.
Making AI Accessible: Selling AI and GPU Services
00:10:50
Speaker
And then for us as a technology company, there is an added flavor. yeah We also sell AI as a service. So there are companies that don't know how to use AI. So we have experts that are consulting and helping companies use AI and we sell them GPU as a service. So the processing power for AI as a service. So they don't need to buy AI servers and so on, we can sell them fractional ah capacity and that they can do probably and customize for them.
00:11:19
Speaker
Very impressive. So coming closer to to home, I would say home being Minat region here and your presence globally in 38 markets and broadly.
00:11:31
Speaker
How do you see the difference in landscape in technology in the Mena region and when you compare it to the global landscape? Potentially challenges and opportunities in both ways.
00:11:43
Speaker
I think it's very different to put the Mena region in one pot. Fair.
Regional Leaders in AI: UAE and Saudi Arabia
00:11:49
Speaker
Okay, because we have the UE and Saudi are really ahead of the pack, not only in the region,
00:11:57
Speaker
but probably in the world. Stand up globally as well. They are very, exactly, the world. they on On a global scale, UAE and Saudi are putting a lot of investment, a lot of resources behind that transformation in AI, and they both have the capacity to ah be part of that ecosystem because the ecosystem of AI needs several components. One of them is energy, which the two countries also have ah but in abundance. yes So that really gives them the strength to be global players there.
00:12:31
Speaker
and And then I would say that they are as advanced, if not more advanced than many of the Western powers. Of course, the US is the global. US and China today are the two lighthouses that we see in terms of what AI could look like. And they are competing.
00:12:48
Speaker
Of course, the US s at the moment is
Data Sovereignty and Geopolitical Challenges
00:12:50
Speaker
a bit ahead, but not a bit ahead, they're ahead. But China is trying also hard and they are the two two entities doing it. I think then when we look at the rest of the world,
00:13:02
Speaker
UAE and Saudi are leading the pack in terms of what they are trying to do. We have, of course, some of the Western ah countries in Europe that have capabilities, and this is why we've heard of projects launched by UAE and Saudi investments in the Western markets, because also then where what you have in Europe is talent.
00:13:25
Speaker
You have great educational institutes, and we don't while we have really up the game in our part of the world, but not fast enough yeah to ah yeahpping be able to lead. You need the global talents. And we and then therefore, we can see some investments happening here.
00:13:42
Speaker
So ah the rest of the main ad region is, I think, lagging behind. The rest of GCC is lagging a bit behind. And then you go to North Africa, it's lagging significantly behind. It's not at the moment...
00:13:54
Speaker
playing this game yeah yet other than ah few nuggets of smart startups that are trying to do you know different niche things in ai we don't see anything uh that is really you know it's not worth writing home a but And focusing on the same from a geographic area, if we narrow down to UAE, Saudi, and potentially rest of G.C., how do you see them themselves positioning as global hubs for technology and possibly AI as well?
00:14:30
Speaker
And what type of changes in terms of the infrastructure regulatory? yeah I think i think the the the key problem that is facing the world today is of course the geopolitics between US and China.
00:14:44
Speaker
Yes. And how to demark the interaction between the technologies from the two kind from the two big global powers. ah That's on one side. The other part is data sovereignty and where the data absolutely is residing.
00:15:00
Speaker
And this, I think, will to a great extent ah ah dictate to us the agenda of how the evolution of AI will happen. Because to teach a model with public data, you can do that anywhere in the world and you can do it in the GCC. But if we want to run in the future big data centers that are serving big parts of the world, the world needs to come to an agreement on how data sovereignty will be like. Because if every country says, I want my data to stay inside the country,
00:15:29
Speaker
then there will be again a limit on yeah how much big investments you can do cost versus the benefit of a bigger scale scalability of the exactly exactly so you'll end up with smaller data centers everywhere rather than big plays of mega data centers that are more efficient for sure scalability of course are ah able to serve a lot of countries And and this is this is a problem that ended up, you know, we have some, and again, looking even beyond Maynard region, there are some countries in Africa that don't have data centers at all.
00:16:04
Speaker
And if they do not, and they have data sovereignty rules. So it's it's almost like dooming themselves that they never become part of the global ecosystem. yeah Absolutely. so So there is a lot in these regulations that need to evolve and...
00:16:18
Speaker
Some of these regulations exist. Some of them will have to be created in the next ah months and years. And how do you see the technology shaping up the future of the GCC region in the coming five years?
GCC's Digitalization and Future Tech
00:16:34
Speaker
I think the GCC today in terms of digitalization and advanced technology is really ah one of the very prominent regions in the world. We can see all across the GCC region everything being done by apps, ah people are all connected, smartphones everywhere. I mean, the penetration, GCC as as a region, not one country, but as a region has the highest penetration of smartphones in the world, 5G everywhere.
00:17:04
Speaker
and you know of course, we we're not only 5G, we have the fastest 5G in the world, you know, for the past four years. I'm very proud of this. And this allows us ah to really build a lot of things in the ecosystem behind this. So you will see in the GCC things like self-driving taxis before anywhere else. At some point, we'll see ah drones that carry shipments and people faster than anywhere else because the infrastructure is there.
00:17:35
Speaker
The energy is there and and very importantly also, the investment is there. Absolutely. Because some other countries might have ideas and have some capabilities but don't also have the power to invest.
00:17:46
Speaker
We are very lucky and to be in a region that can do this. And the vision and the leadership in the region has been committed absolutely to advancing technology basically. Absolutely.
00:17:58
Speaker
So Hatem, touching on a topic or ah something you mentioned here, the advancement that you're progressing on, the adaptation and technology, and then the sustainability element of it.
Technology in Sustainability and Energy Reduction
00:18:12
Speaker
How do you see sustainability working through your very ah passionate and aspirations in terms of growth in technology? Look, I think technology has...
00:18:23
Speaker
you know, created a lot of energy use, but also a lot of opportunities to reduce use. And I think that as a company, we were one of the first companies to have ah ah announced clearly our climate plan.
00:18:41
Speaker
and our ah carbon targets. So we have ah pledged to become ah emission neutral in the in the UE by 2030 and across the group by 2040, which yeah I think very few companies have put dates with this.
00:18:58
Speaker
And so far we've been able to cut emissions by ah almost 60% over the last three years, and we're working more. And I think that AI and the other technology we're doing are really going to help because as we need to cut emission, we will always need energy. So what we need is a combination of buying sustainable energy and at the same time reducing the actual energy. And we've done a number of things. We've, for example, moved most of our fleet to become electric cars.
00:19:31
Speaker
And not only that, we're enabling other people. we We've launched a company that provides charging stations in the UE for electric cars called Charge and Go. We are ah ah doing, ah you know, using IoT, a lot of services for our customers to help them also reduce their carbon footprint.
00:19:53
Speaker
So it's it's a mixture of us really being responsible and working on ourselves. But as a technology company, we're an enabler for other people. Adding the community and their clients says Absolutely, that they can also reduce their carbon footprint. And I think that You know, ah technology companies generally are ahead of the curve and when it comes to sustainability.
00:20:15
Speaker
But I think again, I think we're doing a really good job in overall in Minat and the GCC in terms of the variety of renewables in the UAE. We also have emission free energy from and nuclear power. So we have a lot of things that are positive. Absolutely. That can help.
00:20:34
Speaker
with you know ah reducing global warming and so on. Although I think there is a lot of discussion about how much of that is happening and how much is not, but we're still very committed committed indeed to reduce our energy usage and our emissions.
00:20:48
Speaker
That's a great way of concluding today. Hatem, it's been really a great pleasure. Thank you for your time and thank you for the very valuable insights. Wish you all the best with the EN strategies over the coming years.
00:21:00
Speaker
Great to have you here. Thank you very much. It's been a pleasure. thank you Thank you for joining us at HSBC Global Viewpoint. We hope you enjoyed the discussion. Make sure you're subscribed to stay up to date with new episodes.