Saad al Barrak’s new book, A Passion for
Adventure: Turning Zain into a Telecom Giant, is
published by Bloomsbury Qatar Foundation
Publishing at £20 hardback, £9.99 paperback
Saad al Barrak is finally free of Zain, the company he tried to build up into a global mobile telecoms force to rival the handful of world leaders. But he’s not out of the telecoms industry: the former group CEO is setting up a series of investment companies, two in the US and two in Egypt.
His motto, says Al Barrak, is: “Don’t set out to make money. Set out to make history.” He is looking for start-ups, turnarounds and growth companies in telecoms and telecoms-related IT through his new ventures, which he is managing from his home in Kuwait.
Al Barrak is a man who generates extraordinary loyalty. In March, when he published the book of his adventures at Zain, executives from across the Middle East and the rest of the world came to his launch party in London.
Zain stood out as the single privately financed mobile operator from the Middle East region to grow out of its national boundaries. All the others are funded through state-owned or ruler-owned investments.
He took over as CEO of a small Kuwait operator, MTC, in 2003 and within two years grew it to become one of the biggest in the region — with operations in Jordan, Lebanon, Iraq and then bought Celtel, with operations in 13 African countries.
In early 2006, in a meeting at Mobile World Congress in Barcelona, he told Global Telecoms Business that in January 2003 the company had 600,000 subscribers. “Today we are in 19 countries with 15 million plus subscribers.”
And he was searching for a new global brand, “that could be understood and appreciated and celebrated and embraced from China and Gabon, in Rio de Janeiro and Madras, in Moscow and Iceland at the same time. It’s tough, but we’ll try.” The brand that he chose was Zain. By the end of 2009 it had 72 million subscribers.
He wanted Zain to become one of the 10 biggest operators in the world, with shares listed on the London Stock Exchange.
But the project to build a global company stalled. In his book, A Passion for Adventure, the explanation is the global financial crisis that started in 2008. “Our major shareholders were hit very hard,” he recalls. The Kuwait stock exchange lost 40% of its value in the last three months of 2008, and then “fell a further 70% in the next six months”.
The company’s strategic shareholder, the Al Kharafi Group, changed its priorities. “It did not make any sense for me to stay,” writes Al Barrak. His final connection with Zain was as CEO of the Saudi Arabian operation, which he left in October 2011.
Today he looks happy to be free and able to speak. He is working on his investment arm, called Ila, “which sounds good in Arabic and English, just like Zain”. The plan for the venture capital operators is to invest for five years and then exit or stay as a minority operation.
One of his new activities is Red Lambda, based in Orlando. “We want to pioneer in internet security and cloud computing. That’s one of the most promising areas of the internet. Cloud computing will not be a success unless you have the security.”
Another venture, he says, is Mobila, based in Pasadena. “It’s focused on infrastructure applications and applications for mobile.” The first product is a mobile browser “that can fit any handset”, says Al Barrak.
He is also backing Ila Egypt, “which is focused on creating products and services for the next wave of mobile, machine-to-machine”. In the next five years he expects there to be 50-60 billion SIM cards. “Anything that is moving or fixed will have a SIM card — cars, dishwashers, security systems. Ila Egypt is focused on M2M applications. Some of our products are coming out now.”
Why Egypt? “Because of the resources and the access to talent,” says Al Barrak. “The fourth company is also Egyptian — on the service side.” Mobicon will be a distributor that will be aimed at the pan-Arab world, “with our own shops or distributing to shops”. He and his colleagues “have been in operations for many years and we know the ideal profile of a distributor”.
Red Lambda is 30% owned by Al Barrak’s fund; Mobila 50% and Mobicon 51%. But Ila Egypt is 100% owned, “because that’s an area of the future”. Al Barrak is also looking for strategic advisory contracts, he says, “with me and a number of people who are ex-Zain management, and friends who are supporters”.
The next project is “to set up a fund worth $300 million to invest in telecommunications and telecoms-related IT”, adds Al Barrak. “We will manage this out of Ila. We are already being offered so many opportunities.” GTB
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