The Value Og Being Global

Perspective

Karim Sabbagh Mohamad Mourad Alfonso de Gaetano Amr Goussous

The Value of Being Global Finding Synergies within GCC Telecom Operators

Contact Information Dubai Karim Sabbagh Partner +971-4-390-0260 karim.sabbagh@booz.com Mohamad Mourad Principal +971-4-390-0260 mohamad.mourad@booz.com Alfonso de Gaetano Senior Associate +971-4-390-0260 alfonso.degaetano@booz.com Amr Goussous Senior Associate +971-4-390-0260 amr.goussous@booz.com

Wassim Kabbara also contributed to this Perspective.

Booz & Company

EXECUTIVE SUMMARY

Over the past decade and a half, an unprecedented wave of expansion has altered the global telecom industry. As part of the sector’s transformation, several global telecom operators have emerged and some have footprints that span several continents. Investors have favored these expansion-minded companies; collectively the operators with large multi-market presences have markedly outperformed local and regional telecom competitors as well as major financial stock market indices. Investors have rewarded the global operators both for increasing revenue right away and in anticipation that scale will lead to increased profitability.

Building a global platform by itself does not, however, automatically mean that operators will capture all of the opportunities of having an international presence. There are sequential steps that operators need to take in order to maximize the full benefits of their newly created scale. First, operators must identify their individual opportunities to create synergies, or their synergy potential. Then, the global operators must adopt a corresponding organizational model that will enable them to reap the full benefits of their global reach. New global competitors are emerging swiftly in the Gulf Cooperation

Council (GCC)1 region. The opportunity for these operators to capture their full synergy potential and derive maximum benefits from their footprint is enormous. GCC operators must recognize...