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Axiom vs Cellucom

Axiom, Cellucom

One gives away gold mobile phone to celebrate the twelfth anniversary of the Dubai Shopping Festival while the other sells luxury LG Prada handsets. But beyond the bling, lays a much cruder realities: Cellucom and Axiom are fighting hard to get customers on the line. Both opened their first retail stores in 2001 in the UAE, both offer leading phone brands (Nokia, Samsung, Motorola, Sony Ericsson, etc.), and both are specialized in wireless communication products (namely mobiles, PDAs and Bluetooth devices). So the pair compete on two key issues - service and presence - coming up with creative ideas in order to widen their range of costumers and build loyalty.

Keep customers happy and make friends

Relying on its previous experience in wholesale (the company was established in 1997 but launched its first retail spot in 2001), Faisal al-Bannai’s Axiom Telecom quickly carved for itself a reputation of excellence in sales and after-sales service. In comparison with traditional mom-and-pop retailers Axiom relied on classy store design, highly trained sales teams, and attractive benefits, including a two-year extended warranty and a free mobile phone insurance, all of which justified slightly higher prices than the market average to its middle to upper income target segment. Today, Axiom has 200 standalone stores across the UAE but has also been relying on fruitful partnerships with Spinneys, the Lulu supermarket chain (with which it developed Lulu Mobile, a less expensive brand addressing a lower revenue segment of clientele without damaging its original brand image), the Union Co-Operative, Virgin Megastore mobile shop, the Emarat gas station chain and more recently Enoc & Eppco Petrol station where Mobile Phone accessories are sold.

Founded in 1990 by Arun Nagar in East Africa where it was granted exclusive distribution rights by Nokia and Samsung, Cellucom moved to Dubai Airport Free Zone in 1999. In two years, it opened six showrooms in the UAE before successfully launching in 2003 its franchisee network, Val-U-Shop (now Cellucom Xpress) with a fairly simple concept: to approach existing chains not involved in the mobile business, such as Emirates Post or Jacky’s Electronics, and have them house small outlets addressing money-conscious buyers looking for added services such as 30 minutes guaranteed repair and one year warranty. There are today 86 Cellucom standalone spots and 60 Cellucom Xpress outlets in the GCC.

Here and there

From the start, Cellucom was not planning restrict itself to the UAE (where admittedly, many of the best retail spots had already been taken) and has been quickly expanded on a global scale, which might have given it the advantage over Axiom. Al Bannai’s brand remained focused on the local market until 2004, when an estimated 200,000 handsets were being sold monthly through 1,000 outlets in the UAE. By then, Axiom had enough coverage at home, so it was time to move to virgin pastures and start branching out to Saudi Arabia, where the market is expected to grow to 20 million mobile phone subscribers by 2014. In the meantime, Cellucom had already developed operations in the UK, Singapore, Hong Kong, Saudi Arabia, Bahrain, Qatar and Kuwait.

Things accelerated further for the next two years, with ever more significant deals being inked by the two retailers: in 2005, Cellucom increased its retail operations throughout the GCC, Kuwait, Saudi Arabia, Bahrain and Qatar and set up operations in India in 2006. Today, this $500-million retailer of telecom and IT products has 150 outlets in the Middle East, Africa and India where it also signed a franchise deal with major Indian conglomerate RPG; Cellucom expects to reach a total of 500 points of sale by 2008. 2007 was a year to remember for the brand (awarded the much-coveted Superbrand award) that was appointed “key partner” by Etisalat, the largest telecom company in the UAE, and that signed a partnership with UAE giant al-Rostamani Group, as well as a new agreement with Oman’s communication provider Nawras.

Not that Axiom stood idle: al-Bannai’s business generated a turnover of around $1.4 billion in 2006, and now has 480 outlets and retail points in the Middle East - and plans to reach 600 by 2008, adding Iran, India and Tunisia to its map along the way. In 2005, 40 percent of its capital was acquired by Tecom (owned by the Dubai Holding group) and in 2006, alongside with American giant RadioShack among others, it founded of Braxda Telecom (a distribution, supply chain and retail alliance). In 2007, Axiom made its first step towards the huge Indian potential by joining forces with India’s Future Group, in order to set up service centers to refurbish used phones for around 400 Pantaloon Retail stores.

Anytime, anywhere

Beyond retail, the demand for content and value-added services is surging in the GCC and both Axiom and Cellucom - along with many other manufacturers, telecom operators, application developers - are actively engaged in providing the market with what it’s asking for… and hence further strengthen the bond with the costumer while developing high-margin revenue streams. In this race, Axiom and Cellucom are close to a tie: the former has established in 2003 its dedicated mobile services brand AxiomPlus that provides a variety of downloadable entertainment features, including real-time football updates as well as the usual, ring tones, logos and games array. The latter created, again in 2003, its UClub portal, providing a mix of Arabic, Asian, and English content, as well as specific regional options such as the Azan (prayer call) for local prayer times. The next step towards mobility will consist in becoming a Mobile Virtual Network Operator (MVNO), buying time of a traditional operator to sell it back to consumers via some creative new package. Thanks to its close relationship with satellite service provider Thuraya, Axiom is in the starting block but Cellucom is probably not lagging far behind.


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