“Asia now accounts for 90% of Telenor’s customers, almost 50% of revenue and 50% of the profit, so Telenor is now half an Asian company,” said Sigve Brekke Executive VP of Telenor and head of Asia operations.
Telenor first moved into Asia in Bangladesh in 1996 in what Brekke termed a test project. Malaysia soon followed in 1999, Thailand in 2000, then Pakistan in 2005, India in 2008 and most recently Myanmar last year.
“I remember back in 2000, everyone was in Asia - BT, Deutsche Telecom, France Telecom, the Americans - Verizon and AT&T too. Today only Telenor is left with the only exception [being] Vodafone in India. Only Telenor has as Asian platform,” he said, speaking to a small group of journalists from Telenor Asia’s office in Bangkok.
Brekke said that back in 1997, few people believed that mobile would be a mass-market in Bangladesh. Last year, Telenor surpassed 50 million customers in Bangladesh, now the biggest in the whole Telenor group.
Today, the focus is on two different markets - one which still enjoys a high growth rate, giving connectivity to those who have never had a phone in Myanmar, Pakistan, India and Bangladesh while Malaysia and Thailand are markets now seeing intense data growth.
Myanmar in particular was a challenge with lack of infrastructure at all levels from manpower, lack of electricity to government agencies with no clue how to regulate construction and everything in between.
Today it has 3.4 million customers since launching last September, with 40% of them using data on a daily basis.
Brekke said that today Telenor Myanmar covers around 25-30% of the population. The company is working with three tower companies and is going to great lengths to train its partners on health and safety laws and to avoid child labour.
Telenor Myanmar has yet to go into the conflict areas held by rebels in Myanmar but it has established liaison officers and is communicating with local government and with military regimes.
“Hopefully we are able to build up relationships so entrance to this area is possible. We hope we are being seen as a part of the solution and not part of the problem,” he noted.
Looking forward, Brekke said that he expects data growth to grow from 15% today to 80% by the end of 2017.
“2015 will be the year the bottom of the pyramid will demand Internet,” he said.
Asked about the lawful intercept requirements, Brekke said that Telenor is clear that any lawful intercept must be governed by clear rules. In most countries that is either a court order or an order from government.
Asked if the number of lawful intercept requests had risen in Thailand since the May 22nd coup, he said, “No. Not really. We had an issue with Facebook but other than that the answer is no, we are working as before.”
On the spectrum front, most operations were getting by though India was a particularly difficult challenge where Telenor has just 5 MHz on 1800-MHz and 40 million customers. He also noted that a shortage of IPv4 addresses were also a problem in India.
Brekke said that these days it’s important to have a mix of high and low-frequency spectrum, not just handing out more spectrum in the upper bands.
Telenor expects to see capable 4G handsets in the $40 to $50 price bracket within a year. When the hardware reaches this price point, the challenge then becomes the content. The new market that is opening up will not all be using Facebook or Whatsapp, and it is up to Telenor to help develop relevant content for this new mass market. This will be in the form of financial services for the unbanked, health and insurance, agricultural price information and education.
In Thailand, Telenor has sponsored 15 startups, three of which have already received funding from venture capital.
Then there is education. Many people still do not know what the Internet can do for them and many still have this perception that the Internet is evil.
Asked how Telenor is working to rebuild trust and security in the wake of the Snowden revelations, Brekke said that on the one hand Telenor is doing everything it can to secure its networks from attacks on the outside. The company is constantly upgrading and he admits that it is probably not happening fast enough.
“This is really an issue on the top of the agenda of all operators. We are learning from each other,” he said.
Privacy for the consumer will be a bigger issue going forward and it is important to win back consumer confidence.
“I cannot tell you what we are going to do, but what I can say is that it is really high on the agenda,” he said.
Asked about the move by Apple with its soft SIM and now Google with its reports of a Wi-Fi - MVNO Hetnet and if this would soon relegate the telco into nothing more than dumb pipe, Brekke disagreed and said that this model was unlikely to make it out of the United States. In Asia it is a whole different ballgame with licensing, regulation and distribution.
On the contrary, there is a lot of opportunity for telcos to work with the likes of Facebook, Line, Whatsapp and YouTube in Asia. He noted that Facebook has prioritized Thailand as its number two market worldwide and Thailand is also the 2nd largest YouTube viewing community in the world - bigger than India, the UK and France to name but a few countries.
To that end, Sigve said that the company needs more spectrum and a better pricing model.
“I see more cooperation than real threats,” he said.
Sigve Brekke is also Interim Dtac CEO. He said that on the Thai front, negotiations with Dtac’s concession holder CAT Telecom are going well both at the management and at the board levels. He said there is agreement on both towers and on fiber and expects an agreement sometime this year.
The issue is complicated in Thailand because of the BTO concession which means that CAT (and fellow state telco TOT) own the networks not the telcos.
He also said that Dtac has intentionally played the emotional card. The company has been sandwiched by one company with the premium image (referring to AIS) and another with a value for money image (TrueMove). Dtac wants to be the one loved by consumers and to be king of content with a preferred position with the most popular domestic convent providers.