A strategic use of technology: case of

Vodafone Egypt
Nahed Amin Azab, Yasmin El Sheikh, Arwa Moharram, Basma Ibrahim and Nouran Yehia

Nahed Amin Azab is Vodafone Egypt has been consistently progressing since its establishment in 1998 until it
based at the Department ranked the first mobile provider in Egypt in May 2012. Osama Ahmed, the IT Manager, has
of Management, The been always acknowledging the role of Information and Communication Technology (ICT)
American University in
in supporting the organization’s business goals. ICT enabled the company to address a
Cairo, Cairo, Egypt.
Yasmin El Sheikh,
number of challenges and to exploit many opportunities particularly during the period after
Arwa Moharram, the Egyptian revolution in January 2011.
Basma Ibrahim and By that time, the migration from Oracle to SAP enabled the company to align its IT systems
Nouran Yehia are all
with Vodafone International. Integrating Finance, HR and Supply Chain departments
based at the School of
Business, The American
enabled the company to realize many benefits including more control and efficiency in
University in Cairo, Cairo, operational processes and better workflow for purchase orders (POs).
Egypt. Yet, it is difficult to always maintain the company’s position in the Egyptian market where
competition – with the two other mobile operators in Egypt (Mobinil and Etisalat) – is fierce,
and customers are continuously having higher expectations. It is becoming more
challenging to provide a premium service to an increasing number of consumers. The
company faced additional pressure in 2012 with the initiative of launching a forth mobile
operator. The Egyptian Telecom Company (ETC) – the state company that has a monopoly
over landlines – decided to be a mobile virtual network operator (MVNO). As such, ETC is
supposed to purchase minutes from the three mobile operators in Egypt and sell them to
consumers. At the same time, Vodafone Egypt has been growing very fast and so its
number of employees. The need for smoothing and streamlining processes within and
among different departments became evident, but without compromising on the control
functions.
What could be the future business directions to respond to the above issues? And how ICT
could assist in sustaining Vodafone’s edge at this critical stage?

Overview of the telecom industry in Egypt

The telecommunication service in Egypt is regulated by the National Telecommunication
Regulatory Authority (NTRA). The Authority is under the umbrella of the Ministry of
Disclaimer: This case is written Communication and Information Technology. NTRA’s main goal is to enhance services in
solely for educational order to satisfy citizens’ needs providing full transparency among all telecom companies
purposes and is not intended
to represent successful or operating in Egypt. Consequently, it sets the policies that encourage national and
unsuccessful managerial international investments in a way that ensures the best provision of services to all regions
decision-making. The author/s
may have disguised names; of the country (rural and urban ones). NTRA guarantees also the optimum use of the
financial and other frequency spectrum, and the compliance of telecom companies to international policies
recognizable information to
protect confidentiality. and regulations.

DOI 10.1108/EEMCS-06-2015-0102 VOL. 6 NO. 3 2016, pp. 1-16, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 Due to the relatively low subscription prices and the different offers provided by the three
telecom companies in Egypt, mobile penetration has increased significantly from 2010 to
2013 (from 70.66 to 99.7 millions) unlike fixed lines, where the number of subscribers
declined during the same period from 9.62 to 6.82 millions (Ministry of Communications
and Information Technology, MCIT, 2015).

Company background
Vodafone is a telecommunications company that offers mobile services, solutions and
products. Internationally, Vodafone is one of the leading communication companies with
headquarters located in London, United Kingdom. Vodafone first started operating in Egypt
in 1998, providing the consumers with great variety of technological solutions for both
businesses and consumers. It developed considerably, as it was established, was able to
dominate the market successfully and build the necessary brand trust and loyalty. The key
of its success lies in its customer-driven strategy that focuses on understanding customers’
needs and thriving continuously to satisfy them. Their consumer-focused perspective has
entitled them to remain on the top of technological advancement, being able to cope with
the extremely rapid technological innovation. Moreover, they adopt the latest information
technology tools and concepts in their different operations.
Vodafone is the number one network in Egypt, with a primary target to permanently be the
best mobile operator. As declared by the Egyptian Ministry of Communications and
Information Technology in April 2015, the number of mobile subscribers in Egypt is 96
million representing around 110 per cent penetration. Vodafone has the highest market
share at 41.5 per cent (around 40 million subscribers), followed by Mobinil (33.6 million
subscribers), and then Etisalat (22.6 million subscribers).
The company’s ideology in adapting to continuous change and in being always the leader
in the market is fuelled by the motto: “Progress is impossible without change and those who
cannot change their mind, cannot change anything”. Therefore, their work place theme is
dynamic and innovative for achieving this aim. Employees at Vodafone constitute a team of
professionals who work incessantly to develop and enhance Vodafone Egypt’s voice, data,
transport and fixed networks. Customers are provided high-end, efficient and excellent
enterprise services through the use of ITIL methodology (The Information Technology
Infrastructure Library), which is basically the collection of best practices that aims to
improve the company’s performance to achieve goals and objectives especially
technological ones. Moreover, in assurance that customers could make calls anytime and
anywhere, Vodafone’s network coverage is planned to reach 99 per cent of Egypt.
Vodafone Egypt provides a superior quality of services to their customers through a
dedicated team of over 6,500 employees working in different activities. Almost half of them
work in customer care and administration (Exhibit 1).

Types of services
Vodafone Egypt provides a variety of services to its customers:
 Voice: Vodafone Egypt is the largest carrier of mobile voice services, providing
domestic, international and roaming voice services to more than 370 million customers
worldwide.
 Messaging: Vodafone Egypt’s network received and sent over 292 billion text, picture,
music and video in 2011.
 Data: More than 75 million customers bought Vodafone Egypt’s mobile data services
that allow access to the internet, emails and other applications on their phones, tablets
or any other device.
 Fixed line: Vodafone Egypt provides fixed line services to all its customers worldwide.
They provide wholesale carrier services to over 40 African countries.

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 Other: Other revenue generating services include secure remote network access and
revenue from MVNOs generated from selling access to Vodafone Egypt’s network at the
wholesale level.
The graph in Exhibit 2 represents the percentage of revenue generated by each type of
service.

Management structure
By the end of its fiscal year on 31 March 2011, Vodafone International changed its
organization structure to ensure the delivery of the company strategic goals. Europe region
consists of all existing controlled businesses in Europe plus the ones in Czech Republic,
Hungary, Romania and Turkey. Africa, Middle East and Asia Pacific region comprises
Egypt, India, Ghana, Kenya, Qatar South Africa, Australia, New Zealand and Fiji. The
organizational structure of Vodafone usually promotes teamwork.
Exhibit 3 shows the management structure of Vodafone Egypt in which all departments are
reporting to the CEO, Hatem Douidar.

Market position
By the end of December 2011, Vodafone Egypt customers reached 36.3 million: a market
share of 43.4 per cent. Furthermore, the company leads its competitors in driving their
customers to migrate to smart phones and data packages. Vodafone continues to
capitalize on its main key growth areas of data, enterprise and emerging markets, while
maintaining investment in improving its network quality and in developing new services.
In Egypt, there was a general decline in service revenue due to a combination of
termination rate reductions, competitive pressure on pricing and socio-political unrest.
Exhibit 4 shows the low customer growth rate in Egypt as compared to India, even though
both countries are considered emerging economies (7 vs 18 per cent).

Technology description
With IT being the core of the company, Vodafone has to ensure that the software they
depend on is efficient and up to date. Technology used in the operations is classified into
two main categories:
 networking; and
 billing.
The Networking part is the core IT system of the company, where one can check the
coverage of the data and its quality (2G, 3G or 3.5G). The system also enables the
gathering of statistics that pinpoint the defected areas.
As for the billing system, it is divided into six main software applications (Exhibit 5):

1. Ericson billing system: Responsible for recording voice call information (duration of the
call, call per minute, total cost, etc.). Moreover, it is the main database of all Vodafone
customers (30 million). It is always up-to-date, as Vodafone checks continuously with
its customers for any updated information. In case of any missing personal information,
the account is considered illegal and cannot be activated until its correspondent
customer completes her/his information. The system is therefore a very useful tool for
eliminating all unregistered consumers.
2. S Bill: Concerned about consumer relationship management. It mainly supplies
consumers with the usual “superior” customer services for Vodafone two main users’
segments:
 Regular customers – Retrieve all their personal and usage pattern information from
their phone number or from the serial code at the back of the phone’s SIM card.

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

  Premium customers – Provide a variety of offers such as giving free minutes, text
messages, free points, etc. “Premium Vodafone Consumers” are detected by the
system based on their usage capacity, pattern, and type of service.
3. Business intelligence (BI) system: Used by sales/marketing teams. It solely gives
information and statistics for promotional campaign purposes without interfering with
each customer’s personal account. Output of this system constitutes a competitive
edge for Vodafone Egypt due to the valuable information obtained from sophisticated
data analysis. Ahmed sees that “The BI system has solutions for almost anything in the
company starting with the IT department and ending with the Supply Chain. It deals
with a large amount of information – about almost everything; hence, we are 100 per
cent dependent on it in our daily business processes”. The system also provides
information about promotional offers and incentives provided by the competitors for
their loyal customers. Reliable and up-to-date information in this regard serves the
company in responding efficiently to competitors’ initiatives.
4. Point of sales system (POS): A basic inventory system for Vodafone Egypt official stores
that keeps track of every product’s stock. As soon as a product reaches a minimum
level set by the staff, it sends an order to the main inventory system of Vodafone
Egypt, which orders automatically this missing product without any human
intervention.
5. External system: Basically for non-Vodafone retailers to keep track of their
performance and their relationship with customers (outside the company retailers’
network).
6. Internal system: The primary financial management system that covers human
resources, warehouses and contactors’ management.
Integrating both networking and billing systems serves in providing superior customer
service.

The change
The migration to SAP ERP at Vodafone Egypt was part of a project that covers Vodafone
companies worldwide. The company’s Evo ERP project (Evo is short for “Evolution”) was its
“largest ever business transformation” that covers finance, human resources and supply
chain.
Vodafone’s head of ERP, Marcus Cotes declares that “it’s not an IT programme for the sake
of Technology; it’s sponsored by the Chief Financial Officer to deliver broad benefits. It’s a
case of IT delivering a major strategic transformation”.
He confirms also “the project was vital because it enabled Vodafone to operate on a
global basis with common processes and systems”. Evo system would help in reducing
transaction costs, increasing back office efficiency and facilitating global procurement.
At Vodafone Egypt, the implementation project of Evo programme started in 2007 and was
completed in 2011. The first project’s stage was in 2008; SAP modules were implemented
in a Shared Services centre, a Procurement centre and the Hungarian and German
markets. A year later, Portugal and The Netherlands went live. In 2010, Vodafone
transferred to SAP in its other functions in its London headquarters, Spain and Africa. By
2011, the system was expected to cover the remaining company branches: Italy, Greece,
Turkey, New Zealand, Egypt and Czech Republic.
The first phase of implementation targeted employees that would work directly – or even
indirectly with the new system. It started by introducing Evo and its benefits not only in
adding value to the business but also in smoothing and facilitating business processes for
the employees. Next, employees were given three weeks of intensive training by Evo
agents to ensure their capability in using the system. Moreover, an internal communication

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

strategy was executed to allow a smooth transformation process for all employees. For
example, a Super User was selected in each department, whose responsibility is to assist
employees in using the new system in her/his department. Super Users were the
representatives of their department to work with the overall company’s implementation
team. Although it was hard for the employees to shift to SAP in the beginning, which
resulted sometimes in delays in some daily business processes, the entire transformation
was smooth and took from 2 to 3 months. This was due to the fact that Evo’s implementation
in Vodafone Egypt was the fifth wave; hence, the migration was tested in several countries
earlier. Furthermore, Vodafone’s culture enhances constant change to ensure that the
company is always a front leader in the market and nourishes the individualistic
development of employees.
By the end of 2011, the implementation process became half way through, with most data
transferred to the new system. Employees started to use the system and were reporting
immediately any problems that occur to be solved the soonest possible.

Organizational challenges and opportunities

Employees from both IT and HR departments revealed the challenges and opportunities
Vodafone Egypt faces.
As a multinational company, Vodafone Egypt usually faces local as well as global
challenges.
Locally, it was very difficult to keep track of all unlicensed dealers and unregistered
costumers. This fact prevented the organization from controlling the quality of service
offered to its customers, and from obtaining full insight about sellers’ activities and
customers’ behaviour. Furthermore, sharing information and smoothing processes within
and among departments were inefficient, which results always in delays and unnecessary
effort from the part of the employees.
As part of integrating with Vodafone group, Vodafone Egypt had to unify its IT systems with
those of Vodafone International. Although this move would help in integrating information
and processes in the company (hence, addressing the challenge stated earlier), it
represented a great deal of responsibility. The change took long-term planning and
constant training to ensure a smooth migration process. The crucial issue in the entire
process was in transferring data. The main focus during the transformation process was
directed toward the efficiency of the system avoiding any breakdowns. This sometimes led
to few cases of duplication or missing of data during transfer.
As for the opportunities, even though a number of businesses were negatively affected by
the 25th of January revolution, Vodafone Egypt was given the chance to contribute
positively to the development of the country. Egyptians valued the role played by social
media during the revolution. This fact was clearly witnessed when looking into the increase
of internet users by 3 million just one month after the revolution and Facebook subscribers
by 1 million. The rate of technological literacy is still in constant increase and people are
becoming more and more dependent on technology especially mobile phones, hence
providing Vodafone with wider opportunities. Currently, the number of internet users
reached 46.2 million constituting a penetration of 53.2 per cent, and Facebook subscribers
became more than 12 million.

Solutions
One of Vodafone Egypt’s competitive edges is its ability to deal with continuously arising
business risks and challenges. The challenges faced during Evo’s implementation were
addressed thanks to the teamwork spirit of the company’ employees. Both HR and IT
departments worked collaboratively step by step throughout the transformation process.
The short-term phase comprises HR, Finance and Supply Chain departments. Integrating

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 other departments with their correspondents at Vodafone International is planned to take
place at a later stage.
Tracking unlicensed dealers was handled by the Customer Service department.
Customer service agents started contacting those dealers and explained the privileges
they would receive in case they became Vodafone licensed dealers. They also drew
their attention to the legal consequences they might face if they did not correct their
status. Unregistered customers were contacted through text messages and phone calls
that urge them to provide all their personal information to avoid the deactivation of the
service.

Information technology support

Besides its alignment with Vodafone international, the new Evo system helped Vodafone
Egypt in linking the three departments – Human Resources, Supply Chain and Finance –
which provided better control over the joint processes between them. The communication
process is nearly eliminated, as the system allowed for immediate access to information
among the three departments.
The overall supply chain became more efficient, as information arrives complete,
accurate and instantly to the Supply Chain department from HR, thus allowing for
quick actions. Also, instead of being mostly occupied in daily routine operations,
employees’ tasks changed gradually into ones with higher value added. As an example,
staff in the Supply Chain department – that encompasses supply chain management,
procurement and logistics activities – who were in charge of issuing POs, shifted their
responsibilities to negotiating with suppliers as the entire PO cycle became automated;
every employee can now purchase online through the catalogue of the company’s
intranet.
Furthermore, Evo provided greater control over the financing processes. For example, if a
new contract is registered onto the system by the HR staff, this contract’s details are
transferred automatically to the Supply Chain staff, then directly to responsible employees
at the Finance department. Immediate management of monetary terms means more control
over cash flows and greater efficiency in the overall performance. The system being
connected to Vodafone headquarters allows them to manage and watch operations,
crossing boundaries and eliminating barriers.
Furthermore, connecting all registered dealers to the company’s extranet facilitates
communication with them and enables Vodafone Egypt to identify unauthorized ones.
Monitoring their activities and knowing their geographical distribution helped Vodafone
Egypt to ensure correct selling practices and improve quality of networks and services
provided to vendors and customers (e.g. accurate and timely delivery of product and
management of streams), and point out places where Vodafone Egypt needs to widen its
availability.
Having authorized dealers helps the company in registering consumer’s data. By analyzing
these data using the Business Intelligence system, the marketing department could cater
more relevant offers and campaigns based on consumers’ demographics and usage.
Vodafone Egypt hence became very successful in targeting different segments of
consumers through customized advertising. In addition, S-Bill system assists in managing
relationships with the customers by allowing end-to-end testing strategies to better
understand customer needs.

Next step
The IT systems adopted by Vodafone Egypt in 2011 helped the company in solving many
problems. Not only tangible but also intangible benefits were reached. For example,
employees in different departments shifted their activities to more strategic ones since
day-to-day operations required less time and effort.

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

 In 2012, there was still a need for new frameworks to manage these strategic practices
(e.g. faster decision-making, assessment of the value of new approaches, cost
Keywords:
reduction, etc.), especially with the growing volume of the company, the increasing
Competitive strategy,
customer demands and competition of the other two players in the market and the
Telecommunications,
planning of launching a forth operator. Moreover, these pressures were taking place
Customer service,
during a leadership succession stage. The situation became even tougher in an
IT strategy,
unstable political and social environment.
Competitive advantage/
gaming, How can Vodafone Egypt maintain its position in this turbulent atmosphere? What could be
Customer information/ the role of ICT in assisting the company – as always – in functioning successfully despite
analytics all these concerning occurrences?

References
Vodafone Egypt (2011), “The official board”, 2 March, available at: www.theofficialboard.com/org-
chart/vodafone-egypt-sae (accessed 1 May 2012).

Vodafone Group Annual Report for the year ended 31 March (2011), available at: www.vodafone.com/
content/annualreport/annual_report11/downloads/vf_ar2011_full_report.pdf (accessed September
2016).

Vodafone Group Annual Report for the year ended 31 March (2013), available at: www.vodafone.
com/content/annualreport/annual_report13/downloads/vodafone_annual_report_2013.pdf (accessed
September 2016).

Further reading
Internet World Stats (2015), “Internet usage statistics for Africa”, available at: www.internetworldstats.
com/stats1.htm (accessed 15 July 2015).

Investors (2012), “Vodafone”, Financial Results Archive, available at: www.vodafone.com/content/

index/investors/investor_information/financial_results.html# (accessed 15 October 2016).

King, L. (2011), “Vodafone in final stages of global SAP ERP rollout”, ComputerWorld UK, 19 May,
available at: www.computerworlduk.com/news/strategy/vodafone-in-final-stages-of-global-sap-erp-
rollout-3280669/ (accessed 4 May 2012).
NTRA (2012), “NTRA government”, available at: www.tra.gov.eg/en/Pages/ntra-in-brief.aspx
(accessed 15 October 2016).

The Best-run Business Run SAP (2012), SAP, available at: www.sap.com/solutions/index.epx
(accessed 15 October 2016).

Vodafone Egypt main page (2012), Personal Main Page, available at: www.vodafone.com.eg/
vodafoneportalWeb (accessed 15 October 2016).

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 Exhibit 1. Employees’ distribution

Figure E1

Exhibit 2. Revenue Generated by each Service

Figure E2

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 6 NO. 3 2016

Exhibit 3. Management structure

Figure E3

Exhibit 4. Customer growth

Figure E4

Exhibit 5. Billing system components

Figure E5

VOL. 6 NO. 3 2016 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9