Telecommunication Industry in Ghana: Presentation of Airtel

Interview with Philip Sowah, Managing Director of Airtel

What is your view on the telecom sector in Ghana?

The telecom market in Ghana is extremely vibrant and extremely competitive. I personally think it is one of the most competitive in Africa in that we have six players who are all multi-nationals. There’s not one local operation here. They are large multi-nationals, probably in the top ten in the world. That makes sense because any telecom company that has a pan-African strategy wants to be in Ghana. Because of that, we live in a very competitive marketplace.

That said, it’s still an interesting marketplace because there’s still growth to be achieved. For us at Airtel that’s been our focus. The competition will always be there but our focus is where the growth is. For us, growth is in data services, improve quality of service, and in Airtel money or mobile money. These are all relatively virgin areas in Ghana so we see those as focus areas where there is definitely room to make a difference and take a strong stand.

It is better in a way to go high-end to get better revenue. The number of customers will not grow. It is at 86% percent, above the world average. All of the services are provided by the competition, so how do you have an advantage?

Yes, everyone is providing almost the same type of service. The question is whether it is the same quality of service. That’s where we think we differentiate ourselves. It’s simple things. Everyone is a data provider but what is the quality of the data? What is the speed? Is it reliable? When there are issues, do they get resolved? I think that is a big part of it.

Also, mobile penetration is always an interesting number to discuss. Actually in terms of SIM penetration, we are over 100% penetrated. We have more SIMs in the market than people. I for one use four SIM cards and I don’t double SIM. I use all Airtel. I have my phone, I have my iPad, I have a modem that I put on my laptop and I have a router at home. So I have 4 SIM cards and I use all of them depending on where I am. In theory, it means that we can go past 200% comfortably. As data services become more prevalent, that will be what we see.

We see a number of tablet PCs now becoming the norm. Almost all of them take SIM cards. So there is that. As the internet gets faster and faster, every month we are selling more modems. Really I think there is room and I think how you manage the business is what will make you successful or not.

Some people think there are too many operators and some may merge. What is your opinion on that?

Yes, I think that is a correct assessment. I think the number of players is a lot for the size of market. I think if you want true competition, anything above three players gives you pretty good competition. In terms of the government agenda of prevalent services across the country and those types of things, I think anything three and above will give you the level of competition that will drive those agendas for government. I think six is a lot. The thing, as I said earlier, is that we are all pretty large multi-nationals. We as Airtel intend to stay; we are not going anywhere. We will see who decides to leave.

How do you guess things will go in the next three years?

I’m not answering this question properly because I think I am my own worst enemy. If I execute my plan the way it has been laid out, I’m not concerned about the number of operators. For me, that is really my concern – having my team develop a plan and if we execute as per the plan, I don’t think I will have to worry about who the competition is.

As a company, what is the main focus?

Providing good-quality reasonably-priced services for the masses of people. This is what Airtel is known for and we’ve done that. We launched as a data company; we were the first 3.5G network to launch in Ghana so we’ve always been known as providing high-quality data services. We see that as our future and we will continue to do that. Right now we have a number of our 3G towers providing 21 megabits per second which is basically the latest technology on the market for 3G phones. We are deploying that across all our 3G towers and really that is where we see the growth, where we are providing increasingly faster speeds to our customers and they get to enjoy better quality of service.

What are your main challenges?

There are a couple of things. One of them is managing our costs. Last year was a challenging year for the cedi but this year it has stabilized which is good. It was a challenging year so we can generate the same revenue but in international currency it is less.

Another challenge is power, in that the government is heavily addressing the power problems but power is a big problem. We almost run our own grid if you will because we have generators everywhere, we have solar sites in places, and we have batteries, inverters and all kinds of power equipment to keep our network up.

Those two are probably the biggest challenges. The rest is just being able to get the team focused to execute the plan, getting the right people and resources, and having them execute the plan.

How easy is it to get the right people?

The right people are available. With six multi-national telecoms around, we are developing a lot of internal capacity. Now we have quite a number of good Ghanaian telecom engineers. What that does is make their rates go up because everybody wants the best resources. You have to pay for the best resources. The good thing is that the industry is developing a lot of really good international-quality engineers in the country. Because of our strategy of outsourcing our network to our partner Erikson, that gave them the impetus to set up one of their global support centers in Ghana. So they have set up a large resource center in Ghana and they hire engineers. In terms of telecom resources, Ghana is quite rich.

You are ranked number three?

We are ranked number three in terms of revenue market share and number four in terms of customer market share.

What is the target that you’ve set?

In the short to medium term, we think we can be number two. Again, my concern is making sure we execute our agenda. My competition of course will probably be saying similar things but really with the growth that we’ve experienced and with the uptake of customers, if you do a clear dipstick in terms of what the customers want, I think you’ll see that Airtel ranks extremely positively. What we now need to do is exploit that goodwill and convert it into additional market share. We need to focus on heavy branding in terms of greater affinity to the brand because in terms of just pure appreciation for the brand, research shows that we are doing very well.

From an international perspective, what connection international companies can have?

We are clearly a global player. For multi-national companies, I think our strength lies in the enterprise space. We are doing a number of large pan-African and European deals where we are providing voice and data services to large multi-nationals. Our footprint in Africa is 17 countries and right now with the deployment of submarine cables, we are linked basically by fiber to most of those countries. We are looking to extend that to all 17 countries so in effect you can provide high-speed data services. On that you can ride voice. So really for a number of multi-nationals, we play heavily and especially for multi-nationals that have a pan-African vision we are definitely the premiere telco to associate with.

Even on the private side or the SME side, we have a product called the One Network where for as long as you roam in an Airtel country, you are treated as local. What that means is as a prepaid customer, you do nothing when you visit another country. We charge you the local tariffs of that country so you don’t pay the roaming charge that normally follows you around. The beauty of it is you can also buy recharge on the streets from that country. So you just buy a regular recharge on the street, you top up your phone in that country and you can use the service.

How does the customer feel about that?

I think the customers love it. I have a number of friends who do lots of business in East Africa. They go from Nairobi to Tanzania to Uganda to Zambia and they take their Ghana SIM card. For some of them initially it just happened that the phone was on; they didn’t plan to roam but they saw they received a call, they answered it and then they realized they didn’t get deducted any credit for picking it. It piqued their interest because they know when they go to Europe or the US they get hit with charges. That’s what piqued their interest but now we are doing quite heavy advertising on the One Network to get people to appreciate it.

Even in West Africa, we have a lot of trade with Burkina; a lot of people from Burkina Faso use our ports and you also have truck drivers coming through. Again, they are local on Airtel once they cross the border. They can buy top-up cards and they are always in touch. Niger is also another big area where traders and truckers come in to use the Tema ports.

How much does this segment of the company represent?

Right now enterprise business is still relatively small. We have just hired a very senior enterprise director and he’s been with us a little less than four months; he has significant enterprise experience and we are starting to see the results. Right now it is relatively small but the opportunity in Ghana is that in the SME space or the medium-size enterprise which is still relatively large, no one is playing in that space in an efficient way. So what happens is that somebody has a business, he buys three or four SIM cards and gives them to employees. They don’t get a plan. That is an opportunity that we are taking up. We are just about to launch a product called iCloud which is almost like an office in a box. It will give them a website and some phones; they can communicate with employees.

For example, my sister has a real estate business and she has maybe eight employees. Now, what happens is that real estate is a contact business so when an employee leaves, all the contacts that the business had actually leave with the employee. Now we have her on a plan where she has her own numbers that she gives to the employees. When an employee leaves, she retains the number for the business. With that, we also give her a closed user group; that means that employees can call each other and the head office at reduced rates and for some companies, for zero tariffs. Some companies are so large and we provide many services to them. That is another solution we have.

There are quite a number of interesting solutions for the enterprise space. For example, in a company that gives their drivers a certain amount of credit in a month so they can call the head office and communicate, what typically happens is that halfway through the month, they run out of credits. So they ask, do I need to call the head office because I ran out of credits. With this plan, you actually don’t give them any credits. You make it free for them to call the head office so even when they don’t have any credits they can always communicate. Those who have trucking businesses where they have people who are out in the rural areas, they know they can always communicate regardless of whether they have money on them or not. Those are the kinds of services we think will change how people do business.

Will that bring more revenue? Is the SME segment something you need to pursue strongly?

I think it will bring more revenue. I actually think there are a lot of services that international customers take for granted when they are outside of Africa generally and don’t even think to use when they are in Africa even when the services do exist. We actually see a lot of untapped need. The need is there but somehow they don’t think to ask for it. This is a simple thing like a bridge number to make conference calls for 20, 30 or 100 people. This exists but very few companies think to use it here. Outside the country, two or three people want to talk and they use a bridge number. Here it is not common. Those are the changes that we need to bring because there are lots of efficiencies we can bring to enterprise. All this does is bring efficiency to the enterprise. They need to be aware of these options.

In the consumer market, what are the latest services you would like to offer?

Again, I always come back to the data space because I think that data is going to transform the way we do a lot of things. I know one thing my chairman said at the GSMA conference the year before was a focus on getting cheaper smartphones because that is going to revolutionize the way we do business. Basically, now you see people starting with WhatsApp and Facebook and all the different social media platforms. You go to functions and see people at a wedding taking pictures and immediately post it on their Facebook page. That is beginning to take more root.

Where I see us gaining additional benefits or interest is starting to get businesses online, including very small businesses. A good example is why can’t I look for a plumber right now if the pipes are bursting. If I’m looking for a plumber, I need to find out who knows a plumber. I call a plumber and the plumber could live in Dansoman or Tema. It’s not efficient. Somebody needs to tell me about a plumber that lives around here. Location-based services are going to become important and I think that is going to be interesting once you start getting very small businesses online and people start using the network to get the services they need.

Please give me your vision for the future in five years’ time? What would your dream be?

What we would like to achieve is to put the telecom industry at a point where it becomes a given, I mean in the way that in Europe or the US electricity is a given. The telecom industry needs to be that so that when somebody goes to use the service they don’t have to think about whether it will actually work this time.

The next is that the internet needs to be integrated into the fiber of our being and I think that is where if somebody wants a phone number or wants to know where something is or wants to order food, the internet should be the natural place to go. With that, I think that data services and everything around that becomes key. It all boils down to education and making sure that the masses of people now start thinking in that way. It will involve a lot of education. Airtel money is going to be a big part of that because now to use remote services, you have to pay for them. I don’t think in five years the number of debits is going to increase tenfold. We know that almost any adult in Ghana owns a phone so the phone becomes a primary device for delivering service and paying for service. Airtel money is going to be a huge part of that.