SUNBIZ

Vodafone Fiji Plans to Unlock Potential in Telecom Market

Seeing huge potential for growth in the telecommunications sector, Vodafone Fiji is planning more in­vestments to increase internet coverage in the country. The mobile giant’s acting chief executive officer (CEO)
11 Aug 2018 11:00
Vodafone Fiji Plans to Unlock Potential in Telecom Market
From left: Digicel Fiji chief executive officer Mike Greig, Telecom Fiji Limited Director Umarji Musa, Attorney-General and Minister for Communications Aiyaz Sayed-Khaiyum, FINTEL chief executive officer George Samisoni and acting Vodafone Fiji CEO Ronald Prasad at the launch of the Walesi App on June 26, 2018. Photo: DEPTFO News

Seeing huge potential for growth in the telecommunications sector, Vodafone Fiji is planning more in­vestments to increase internet coverage in the country.

The mobile giant’s acting chief executive officer (CEO) Ronald Prasad says the com­pany is buoyed by figures showing most of its customers are now using smart phones.

They plan to unlock this potential by ac­celerating investment and diversifying its products, Mr Prasad said.

For a long time, the company enjoyed mo­nopoly status in the local mobile market.

But the arrival of Digicel, which coincid­ed with a growing customer demand, has made the market challenging.

Mr Prasad admits that competition has been intense, even as Vodafone Fiji retains its position as the market leader in Fiji.

In an interview, as part of Fiji Sun’s se­ries with local telecom carriers, Mr Prasad outlines some of the company’s immediate and future plans.

It comes amid a consolidated revenue of $317 million, as seen in Amalgamated Tel­ecom Holdings’ (its parent company) 2018 annual report.

The interview follows one with Fiji In­ternational Telecommunications Limited (FINTEL) CEO George Samisoni.

Vodafone’s 760,000 mobile connections is an all-time high for the company.

Mr Prasad, who is officially the compa­ny’s chief operating officer (COO), says there is also chance that prices may come down, given the increased level of growth.

He has been at the company for over 10 years, and has a history in business and marketing.

He was appointed COO in February this year.

Company CEO Pradeep Lal has previous­ly praised his abilities.

Mr Prasad also regularly acts as CEO when Mr Lal is away on regional duty.

“In terms of growth, sales and profit­ability, we want more but there has to be a calculated means of getting all of that,” he said.

“So far, we are quite happy with the level of growth.”

The company is also actively trying to convince businesses to move towards cloud computing services.

In its partnership with leading multina­tional tech firm Oracle, Vodafone is trying to provide cloud solutions for local busi­nesses.

Mr Prasad says the solutions will make it easier for local businesses to access, ana­lyse, understand and act on information.

“Because of the advent of cloud services, particularly infrastructure as a service, there are customers who are now moving from investing in their own on-premises hardware to just leasing and using it from a data centre,” Mr Prasad said.

“We are also looking at providing software as a service. All the analytics that compa­nies are doing within their own organisa­tions can very easily be outsource

What are Vodafone’s immediate and fu­ture goals?

“Our immediate goals are to continue with our smart phone penetration.

‘We are now starting small in trying to create a lot of awareness and education.

“We are also doing a lot more one-to-one direct communication with our customers in terms of getting them onto cloud plat­forms.

“Once these cloud solution matures, it’s going to become very easy for customers.

“Over the period of the next 12 to 18 months, a lot of plans with cloud services will be crystallised and developed.

“We will carry on with our campaigns to increase internet penetration because we want more and more people to be con­nected. We will carry on with our invest­ments in terms of increasing capacity and coverage.

“We want to go out to places where there are still people who don’t have coverage.

“There is a combination of technologies that will be used to do that. Certain places, for example, will be using fibre; some will use wireless; we might invest in satellite technology in some places.

“Some places are obviously more chal­lenging or don’t make sense and that’s where we require Government’s assis­tance.

“They have been very supportive in our projects to get people connected because they see the value in it.

“We will also do whatever we can to en­sure our customers get a much better ex­perience. There will be a lot of investment in cloud and self-care services.”

How has Vodafone re-positioned itself in light of digital phones and the

internet?

“We started in 1994 by providing voice and SMS services.

“Over the years we have grown into more than just providing voice and SMS servic­es.

“If you really look at where the change happened, it was in 2008 when 3G kicked in.

“Prior to that, we had data working on GPRS, which was small and slow.

“The real change was felt when 3G was introduced. We started providing much faster access to data.

“Eventually, technology improved. Mo­biles became very critical because you could get very fast broadband and data ac­cess on your phones.

“Around 2014, we introduced the 4G tech­nology. That was the next step from 3G with much faster speeds. We are all now getting ready for pre-5G which will pro­vide even faster speeds.

“If you consider Vodafone’s coverage on 4G at the moment, it’s more or less cover­ing around 80 per cent of Fiji’s population.

Most of the Vodafone customers are now using smart phones, which is becoming the primary device for accessing the inter­net.

“Phones have become much more than just communication devices. As a telecom­munications company, we are enabling all of the functions of a modern day smart device.

“We are putting in a lot of investment to ensure that people stay connected. That’s primarily how we have evolved.

“One of the key things that have to be un­derstood is that the Fijian market is unlike other markets. In developed markets, most of the heavy lifting in terms of downloads and uploads of data is done using fixed wired.

“In Fiji, Vodafone is the primary inter­net service provider (ISP). We have got the most number of customers using Vodafone as their preferred ISP.

“This is primarily because not every­where you go will you have access to fixed line, for various reasons including the ter­rain.

“Obviously fibre is used as a medium for backhaul transmission but in order to pro­vide that last-mile service to where people live you’d have to use wireless technology.”

What are you best and most innovative products?

“M-Paisa is a very innovative product.

“It was developed in-house, and it has become quite a mainstream product in the sense that it is used to transfer money using a phone. When you have an M-Paisa account, it’s like having a secure bank ac­count on your phone.

“The M-Paisa account is separate from your phone account and you have a PIN, just like a bank card.

The virtual money stays in an account but it is available on your phone.

“You can use that to transfer money, pay bills and to top up your e-transport cards.

“That is quite phenomenal; it’s like hav­ing a digital wallet on your phone.

Another innovative product is the e-transport solution that Vodafone has pro­vided. That’s also quite innovative.

“It has helped so many stakeholders to be able to track the number of passenger, the revenue collected and crunch other types of numbers and statistics that help the in­dustry.

“The biggest innovations are coming in the form of applications that we are roll­ing out and also the cloud.

“Because of the advent of cloud services, particularly infrastructure as a service, there are customers who are now moving from investing in their own on-premises hardware to just leasing and using it from a data centre.

“That is a big shift. We are also looking at providing software as a service.

“All the analytics that companies are do­ing within their own organisations can very easily be outsourced.

“This is the cloud journey we want to take our customers on.”

Are you satisfied with the profitability and revenue trends?

“I think there is definitely a lot of poten­tial for growth.

“But we have to keep in mind that the tel­ecommunication industry is a very capital intensive industry.

“We have shown phenomenal growth over the years.

“The market is quite challenging because you have three main operators.

“You have Inkk Mobile, which is a chal­lenger brand but a brand on its own.

“You have got Digicel who are playing in the wireless space, the mobile space.

“In terms of digital transformation, mo­bile is the way to go.

“Therefore, there is a lot of innovation and advancement happening in that area.

“In terms of growth, sales and profitabil­ity, we want more but there has to be a cal­culated means of getting all of that.

“So far, we are quite happy with the level of growth. Amalgamated Telecom Hold­ings (ATH) is also investing in markets outside of Fiji and Vodafone plays a very critical role in terms of providing trusted advice to the (ATH) group.

“We have got very successful operationS running now in Kiribati, Samoa, Vanuatu, and Cook Islands.

“There’s also some work happening on other acquisition opportunities within the Pacific.”

Can customers expect prices to go down, given the level of growth?

“Absolutely. I think if you see the prices of data and even prices of voice in Fiji, its actually one of the most competitive compared to Australia and New Zealand markets.

“The price of mobile data generally in overseas markets is much more expensive when compared to the Fiji prices.

“The price of fixed data can be cheaper because it’s cost so much more to be able to deliver one megabyte of data using wire­less infrastructure vs. a fixed infrastruc­ture.

“It’s much easier and cheaper if you look at the developed markets when it comes to fixed data.

“But if you look at mobile data, Fiji rates are very comparable.”

How is Vodafone facing up to competition from Digicel and Inkk?

“Competition is quite intense in the mar­ket.

“We have majority market share seen in all the analyses that we undertake. It ap­pears that Vodafone has a good 85 to 90 per cent market share.

“This is using the Vodafone network – combined with Vodafone and Inkk run­ning on the network.

“Prices are very competitive in the mar­ket too.

“Because the market is predominantly pre-paid – around 96 per cent – that is where the real competition happens.

“The post-paid market is another area we have a lot of competition.

“It is primarily driven by solutions.

“So if there is one telecommunication company or one Information Communi­cation Technology (ICT) company that is able to come up with the solution that meets customer expectations, and it is something that the others cannot copy or replicate easily, then you can demand a premium price.

“But if it is something that is more or less becoming a commodity then it is very dif­ficult to demand any sort of premium on that.

“That is why we are now trying to differ­entiate ourselves to be able to provide a one-stop-shop for the customer, providing them with all their connectivity and band­width needs.

“The feedback that we are getting from customers is that they don’t want to deal with multiple vendors.

“More and more of our customers are opting for one vendor and one bill.

“From a product point of view, both we and Digicel offer the basic commodity products.

“It all depends on how each is able to add value and put in the differentiation and all of that.

“I think they are very decent competition.

“The amount of investment we have been doing in the Vodafone network has been phenomenal.

“Over the last three years alone, we have spent in access of $100 million.

“This year’s alone we have it at $45m.

“As I said, it is a very capital intensive industry.”

How does Vodafone’s return on investment compare with internationally accepted benchmarks?

“We have a fairly decent rate of return on our investments.

“There are various ratios that we track.

“I am not able to divulge a lot more into detail.

“But on many of these comparisons we are either on par or in some cases better than industry average.

“One of the reasons we continue to do that is because we continue to be a very lean and mean organisation in terms of bringing our cost down.

“We are very cost conscious.

“We also ensure there is sustainability in the business.

“That is the reason why Vodafone has al­ways been the technology leader in Fiji.

“One of the things we want to invest in the future is getting more and more into self-care.

“Today, there are a lot of things that we do for our customers in terms of providing them with top-notch services.

“But as technology improves, there’s a lot more automation that is happening.

“As a result of that, there will be a lot of self-care options available, hopefully with­in the next 18 months to two years.”

What is your view regarding Government’s announcement in the National Budget to penalise mobile telecom carriers for drops in their net­work?

“Telecommunication services have more or less become essential.

“I think Government’s intention is to ensure that all telecom companies put in the required investment to keep their net­works robust and resilient.

“We don’t have any particular qualms about it – we are quite happy with what has been done.

“But we would obviously need to take into account the repercussions of that.

“To an established teleco with a lot of es­tablished processes and procedures that govern everything, the move will help strengthen some of that.

“If you look at the Vodafone network, and its performance, over the last 10 years, complete network outages have been rare.

“Yes, every teleco will have some outages here and there, but a complete network outage is very rare.

“I suppose the bottom line is to always do our best to ensure that our network is al­ways up and running.”

Do you think there is enough competition in the market, or is there room for one more player?

“I think for a country of Fiji’s size there is enough competition in the market.

“Obviously, customers will move from one proposition or from one network to the other, depending on the type of value they get.

“If you talk to other vendors they’ll tell you everybody is making money and put­ting in the investment and there are so many great things are happening.

“If you look at the smart phone penetra­tion on our network, it is close to 75 per cent – that is phenomenal for a country like Fiji.

“The internet penetration is also almost as high as 80 to 90 per cent in Fiji.

“Studies have shown that a 10 per cent in­crease in internet penetration in a country almost results in a one per cent increase in the Gross Domestic Product of the coun­try.

“From a competition point of view, we’ve got Telecom Fiji Limited, there is Connect, Unwired, Inkk and Digicel.

“So in terms of different companies that are providing propositions, we have al­most six different brands.

“And that’s only in the telecom space.

“In the ICT space, there is many more. Overall, in Fiji I think there is sufficient competition and it is quite healthy.

“And of course, we welcome the competi­tion.”

Feedback: sheldon.chanel@fijisun.com.fj

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