FACE OF BUSINESS  Mohamed El-Hamamsy

The Gloves Are Off

ABDALLA F. HASSAN | Business Today | November 1999 | p. 44–45

In one corner of the ring is stock market darling MobiNil, in the other, underdog contender Click GSM. While MobiNil, which commands 70% of the cellular phone market, began with a subscriber advantage by taking over Telecom Egypt’s initiative, Click’s strategy is to capitalize on the woes of an oversubscribed competitor in a cellular duopoly guaranteed until 2003.

 

Recently the competition has heated up. In response to MobiNil’s preferential 25 pt a minute for calls between MobiNil subscribers, Click responded with a more egalitarian promotional offer, 25 pt a minute to either Click or MobiNil users as well as matching MobiNil’s aggressive calling plan than brought monthly charges down to LE 65.

 

Click’s promotions are obviously bids to boost its portion of the postpaid market, which is now a mere 30,000 of the country’s 3.7 million mobile phone users. Currently, 82% of Click’s 250,000 subscribers use the prepaid calling cards Click pioneered in 1998.

 

But Mohamed El-Hamamsy, who joined Click as managing director and chief executive officer on July 1, does not talk aggressively about becoming the market leader. Backed by a consortium of international telecom companies (principally Vodafone-AirTouch Plc, renowned for its stringent quality standards), El-Hamamsy’s goal in to make Click the most admired company in Egypt. “This is what we are all striving to do. This is why we work in a much more deliberate way than other companies in the same field,” says El-Hamamsy.    

 

While rival MobiNil suffers from billing problems and coverage bare spots, Click has witnessed a subscriber surge. The company’s goal of attracting 200,000 subscribers by year end was surpassed by August and is projected to reach 300,000 by the new year. Success is forcing Click to stay on its technical toes; currently its network capacity is only slightly more than 300,000 users. A $17 million contract has been inked with LCC International to install an additional 180 cell sites within a year.

 

In part due to MobiNil’s dominance of the bourse, rumors of an imminent Click IPO regularly surface. But El-Hamamsy says the proposal hasn’t even been formally presented to the company’s board. Undoubtedly, going public is a logical way to finance the continual upgrading of a growing network, but for now the company will continue to rely on bank credit.

 

The new CEO is leading one of the fastest-growing IT sectors. According to Flemings Research, cellular phone usage will overtake fixed-line penetration, jumping from its current 0.5% to 11% by 2008. “Egyptian consumers were not used to having their voices heard or their needs addressed promptly,” says El-Hamamsy. “We are learning that clients can be demanding and clients are learning it is their right to request and obtain quality service.”  

 

El-Hamamsy did have a mobile phone before joining the company. “I am embarrassed to say it was not Click, but I am very proud to say that I am a happy user of Click and all the features it has,” he says as he demonstrates the short messaging service, which the competition doesn’t offer.

 

A successful career in business management was not quite what El-Hamamsy expected when he entered the labor force in the late 1960s, an era driven by a command economy. “You think of becoming a good hardworking employee somewhere, preferably at the time in a stable public sector company,” he remembers. Having a government job and advancing through the ranks exemplified professional stability.

 

Looking back, El-Hamamsy — a connoisseur of classical music and opera who dreams of traveling along the legendary Silk Road caravan route followed by Marco Polo — would have much preferred to be an architect than an engineer or a manager. “As you mature, you realize that there are different things that interest you in life,” the 53-year old says, with Beethoven’s Ninth Symphony chiming triumphantly in his Maadi office. “You want to do them but sometimes it’s a bit late. I entered engineering and just plodded on. I discovered later that I would love to do architecture.”

 

El-Hamamsy followed his heart, earning a master’s degree in Islamic Art and Architecture from the American University in Cairo in 1992. “My son actually finished engineering, and decided while he was in his fourth year that this was not what he wanted,” he says. “When he finished, he went to law school. I respect him very much for this.”

 

Click’s new CEO spent 30 years with IBM, first working as a systems engineer. A number of years later, he was assigned as branch manager in Riyadh, Saudi Arabia, where he stayed for two years. In charge of organizing all aspects of the operation, “I had to learn quickly on the job,” he reminisces. With no management in place to guide him, he learned by trail and error. “But this was the best way to learn — to roll up your sleeves and get the job done.” At 33, he returned to Cairo for two years to become general manager, responsible for IBM’s operations in Egypt and Sudan. In 1982, he moved on to IBM’s European headquarters in Paris where he remained for five years before returning to Egypt as general manager for the next 10 years.

 

One of the biggest challenges in heading IBM’s office, says El-Hamamsy, were the uncertainties of the domestic business environment: currency was expected to devalue, new import laws were being introduced and taxes laws were changing. Another issue was the dilemma of being at the hinge of two cultures in a company managed in a Western style in an Egyptian work environment. “You need to adapt the Western style in a sensitive way to a different culture,” says El-Hamamsy, “and being in the middle is not always easy.”

 

Performance appraisals were one sticking point. Job evaluations are too often taken personally, not merely as a criticism of failure to meet sales targets, he explains. Another issue involved evaluating morale through questionnaires asking for employee feedback. “Where our colleagues in Western countries would take this process constructively by way of helping measure where working conditions need to improve,” he observes, “our people are a bit more manipulative; they don’t always use [the process] constructively. They use it as a bit of pressure exercise or a tool of negotiation with the management.”

 

El-Hamamsy left the sheltered cocoon of IBM in 1997 to start his own business called MegaCom. The firm specializes in management, human resources, organizational development and marketing consulting, in addition to offering IT services such as training and networking. “I felt I would be a mess if I don’t do this at least once on my life,” he says of venturing out on his own.  

 

He sums up his management style as being “hands-on.” “Sometimes I am too involved,” he candidly admits. “But in general I delegate especially if I trust the other person to carry the ball and run. Then I am more than happy to encourage the person to perform without too much interference from my side.” He lists the people he admires as possessing individuality: they are achievers obsessed by results rather than by process, and they have a sense of humor and a love of life.

 

He gives this management tip: trust the young. Allow the people you work with to make mistakes and learn from them. Even if they do not appear ready for the responsibility, they will grow in their jobs, performing much better than anticipated. El Hamamsy has noticed this pattern of behavior not only with colleagues but with his children too. “My daughter comes and says, ‘I want to do this.’ If I argue with her, it becomes a big discussion. If I tell her, ‘Look, I trust your judgement. You will make this decision and you will do what you want.’ It makes her think because you tell her that you will respect what she wants. She thinks she must do the right thing.”

 

El-Hamamsy cites an example of an IBM manager who was so meticulous when supervising his sales staff that he wanted to review every letter before it was sent to a client to make sure it was perfect. There was always room for improvement in any correspondence that passed over his desk: a comma here, a better selection of words there, and he would inevitably make some changes. With time the sales team would not make any effort to write a flawless letter, knowing their supervisor would rewrite it anyway. “They never made the mistakes so they never learned from them,” says El-Hamamsy. “Show them that you trust them and they become better people. They will surprise you.”