General Director of ALBtelecom and Eagle Mobile, Dr. Orhan Coskun says that the merge of the two companies focuses on the customer.
ALBTELECOM & EAGLE MOBILE: NEW SERVICES AND INVESTMENTS IN 2012
Eagle Mobile surpasses 1 million subscribers
The General Director of ALBtelecom and Eagle Mobile, Dr. Orhan Coskun in an interview for SCAN TV said that the two companies have created a long-term strategy which focuses on the total enhancement of infrastructure and the provision of better quality services. He said that in both companies it was invested a total of 150 million Euros, which consists the biggest investment made in the telecommunications sector in Albania so far. ALBtelecom, according to him, has a modern network of about 1500 km fiber optic, compared to 500 km it used to have at privatization time, and until the end of this year it will be offering better quality internet services to 300 000 subscribers all over the country. Even regarding Eagle Mobile, Coskun said that it provides the best services and infrastructure in the country. This is shown from the increasing number of customers, which only two months ago registered 1 million subscribers. He has also given the reasons for the merge of the two companies, stressing the fact that users will have bigger benefits from this strategy. “We want to offer all kinds of services to the customer through one sole structure.We are merging the companies in order to provide better services to the customer”, said Coskun.
Mr. Coskun, what was the performance of ALBtelecom and Eagle Mobile during 2011 and can you mention some key figures?
As ALBtelecom and Eagle Mobile we set up a growth strategy in order to grow broad and fixed line, internet and mobile. The first thing you need to do is you need to invest in infrastructure. Right now, we have the best telecom infrastructure in Albania. What we have done so far is the fiber backbone infrastructure. In 2007 when it was privatized there was only 500 km of fiber. We increased that 500 km to 1500 km, so there is a significant increase in fiber infrastructure and we are now connecting to all neighboring countries, to Greece, Macedonia, Kosovo, even to Dubrovnik, to Italy, Bari we have fiber connections with undersea cables.
The second thing you need is to increase the capacity. I would like to give you the numbers in 2007 so that you can make a comparison of how much we have improved since then.
In 2007, the IP capacity was only 300 Mbps, now we have increased it to 30 Gbps that means 100 times increase. I think internet users now have much faster internet, can access the sites more easily, and it is all due to that increase. And also, the number of ALBtelecom broadband capacity was only 1500, so ALB telecom was able to provide broadband to only 1500 subscribers. Now we have increased it to 150 000 subscribers, so that we can immediately serve 150 000 subscribers XDSL and we are this year, in 2012 adding 150 000 more, so that we can offer 300 000 subscribers high speed broadband internet.
And also the speed, in 2009 the speed was around 256 Kbps, now our minimum speed is 2 Mbps, which is 10 times faster. Now we can offer 100 Mbps in several locations, which is a major increase, and that is the level that European countries are trying to reach actually, they are trying to reach 100 Mbps all over Europe. Those are for ALBtelecom’s side, for the Eagle’s side we increased the coverage significantly and the quality of Eagle services not only in Albania, but also in other places. We have roaming partners all over the world and we believe we have the best roaming service. In Albania we have good coverage even in tunnels and remote areas like Valbona etc.
In terms of subscribers’ number, Eagle Mobile, just 2 months ago, surpassed the level of 1 million subscribers, which is a significant achievement in a very short amount of time.
As we all know, since the mobile is more convenient, as all over Europe and the world, there is not so much increase in fixed numbers. But, on the other hand, internet subscribers are increasing and we are offering higher and higher speed internet to our customers, and we will be offering more value added services (VAS).
One recent example is the case when you miss a call, even in your fixed phone, you can receive a message. There is an answering machine service in your fixed phones embedded, so that whoever calls you, can leave a message to you and you can listen to your message, you can access your message anytime you want. So we are adding more and more functionalities to fixed phones.
In both mobile and fixed telephony, as I said before, we have set up a growth strategy, that’s why we are investing heavily and we are trying to provide the best services at affordable prices. There was one recent report from “Cullen International” which concluded, after comparing all four operators, that with Eagle Mobile you can get the best services for the money paid.
As you have been the Head of Çalik Group before coming at the lead of ALBtelecom and Eagle Mobile, can you tell us how much has the Group invested in ALBtelecom and Eagle Mobile, the two telecommunication companies, from 2007 until today?
Yes, we have actually invested a very important figure so far, 150 million Euros, and I think that it is the biggest investment made by any company in the telecommunications sector in these four years. Where did that investment go – majorly in fiber infrastructure, backbone, mobile coverage all over the place and also on some VAS services. We also transformed the whole ALBtelecom network to the next generation network. So, previously it was like kind of a technical thing, it was TDM, but now the entire world, all modern telecommunication sectors are going to next generation network, so we invested heavily on that one and right now we have next generation network, and we can offer all kinds of services.
What we are planning this year is to offer TV service as a platform, and on that platform, since we transformed our entire network, whenever you are watching TV and you receive a call on your mobile or fixed phone, you can receive a message on your TV: “This number is calling you. Would you like to receive that call or not?”
You will also be able to pause the TV program you are watching and watch it at a later time. So, these are some of the modern services we be will be offering with this major investment that we are doing at the moment.
In Economy everybody is talking about the crises. Has the telecommunications market been feeling these consequences of the crises?
Yes, actually we are also feeling its impact. Honestly speaking, this crisis is all over the places, even in the telecom sector. But, we are investing aggressively and have set up a strategy, which on one part focuses on the growth and on the other part offers freedom to customers, Eagle actually comes from that strategy.
So, we are establishing our brand based on eagle’s characteristics. Eagle represents Albania- that means we are part of Albania, so we represent Albania. What else does eagle represent? It is strong, always one step ahead, and eagle represents freedom, because they fly all over the sky as if the sky belongs to them. What we are trying to do here is, we are trying to offer freedom to our customers, so that they can access any kind of service, video calls, data, anywhere they want, anytime they want.
We are reducing the impact of the crisis on us; we are still growing on the mobile part, but on the fixed part we see the impact of the crisis more and do not expect a big growth. However, with our strategy we are trying to minimize the impact of the crisis.
So, while other major mobile companies are having a fall in their revenues in the last years, Eagle is still growing. How can you explain this? Is it just because Eagle is a new company, or there are other reasons?
Both actually, Eagle is a new company, but it is also due to our strategy. Our service quality is really high. We brought the latest technology our service quality is really high. We brought the latest mobile technology here and we have really good backbone and infrastructure, and on top of it, we have so many VAS services.
We are trying to make people who use our brand, our company, differentiate themselves from others with the values that our brand represents. So, when they choose Eagle, they feel different, and when they choose ALBtelecom, they feel more confident. I have even heard that other competitors, especially on the fixed side, when they are selling fixed phones or internet, they tell the customers “we are coming from ALBtelecom”, although they come from other companies. ALBtelecom has that much strong brand. Those are the things that differentiate us from others, and that’s why we are still in the growth stage.
You have taken a major decision to merge ALBtelecom and Eagle Mobile into a single company, which are the benefits of this merging?
Majorly it is for the customer’s benefits. What we want to offer is a “One-Stop-Shop”. We would like to offer all kinds of services to the customers from one shop. People more and more don’t care about the technology. What they want to do is to have access to the internet. They want to use voice services, whether it is mobile of fixed, they don’t care. They need to have voice services and internet. They want to watch TV, whereever they are. It may be a TV set, or a computer, and even more on their mobile phones, because mobile phones are having larger screens and are becoming more powerful devices. That’s why we are merging the companies, so we can offer better services to customers. Also the technology is merging. The technologies offering mobile and fixed telephony services are merging, so it doesn’t make sense to keep them separated right now.
Do you have any benefits by managing the two companies, in terms of expenditure control or other points?
Yes, it is one thing. The market is getting more and more demanding and we would like to offer better and better prices to customers. You might be experiencing that prices are going more and more down. So, how can the companies survive and grow? They need to reduce their operation expenditure to give better prices and services. I reduce the expenditure so I can offer better prices to the customer.
There were some debates last year on tariffs’ regulation. AKEP had planned to increase the monthly fee, there have been some reactions and the process seems to be slowed down. At which stage is the tariffs regulation now and do you think the monthly fee is to be increased?
Actually, what has been done is the International Consultant counting the cost of offering real fixed services, which means the cost of sending the copper cable to the client’s residence, is around 1 000 ALL. When you offer this service under this rate actually you are losing money. But of course, with the actual economic situation it is not easy to increase the monthly fixed fee, but it is creating a deficit in our balance sheet. So, it has definitely to be increased, because it has to be cost-oriented. The cost of keeping one line alive is 1 000 ALL a month and that is calculated by the international Consultant. But there are some other ways to keep the monthly fee at this level, so they could bring the termination fees a little bit higher for fixed phones, so people don’t pay higher monthly fixed fees. These days’ people pay 1000 ALL and they lose money every month. But as I said before, there are other ways, like keeping the termination rate higher, and actually that’s what AKEP did, to compensate it, which still is not enough. In Eastern Europe the mobile and fixed telephony termination prices are the same, so it is better to keep the mobile and fixed termination tariffs the same, so that the fixed telephony can also survive. Otherwise, mobile is more convenient, but fixed network is definitely required for mother society. If you look at the European countries, every household has at least one line, and that is required by mother society. You need to have at least one fixed line to be part of the mother society, so that you can have high speed internet, TV services etc. But here, the access is limited. Not every house has a fixed line. That’s why you see cables all over the places. This is not the right way to do it. All those cables should be underground. There have to be services in every apartment building. So, everyone can have access to the fixed line. Fixed line provides high quality services not only for voice but also for other services.
8- So, you think that the problem is definitely the monthly fee and the termination fees? Are the termination fees enough to compensate the loss or the monthly fee has to be further increased?
There has to be a kind of optimization. So the fixed line termination fee has to increase a little bit more, to be closer to the mobile termination fee. Mobile termination so far has been very high, but on the other hand the fixed termination has been extremely low. It means that fixed telephony was totally a failing business. Now they have increased the termination fees a little bit, and also the monthly fixed fee, but they need to increase the monthly fee more. The good strategy is to bring the fixed termination closer to the mobile one.
9- AKEP has recently opened the race for the third 3G license. Will you be part of this race and which are the potentials of 3G markets in Albania?
Right now there is not so much 3G pick up in the market. You might have experienced that. That’s why we are still evaluating entering this tender. Of course 3G is necessary; maybe not 4G, but the timing and the license fee are very important. As they are asking 12.5 million Euros, we as Eagle Mobile need to be a bigger company in terms of potential subscribers to accept that price. So, we will definitely get the 3G license one day, but now we are still evaluating and assessing entering this tender.
You have participated in the race for the previous two bids, even though you have not resulted the winner. You look pretty much the favorite to get this license. The fourth operator has definitely accepted that they do not have the capacities to pay that amount. So, you would almost automatically be the winner. Would you lose that chance?
Timing is important. We participated in those tenders, because at that time we were thinking that everyone would use 3G. What we see right now it is not the case. The market is shrinking. In a shrinking market the prices are going down and 12.5 million Euro is a little bit too high. We are still in evaluating process.
11- There has been an increasing competition in the market with the alternative operators. According to AKEP these operators have increased their market share. Some of them are making important investments, naturally not comparing to ALBtelecom investments. How much are you feeling the competition?
Competition is always good. It is not good for a company to have 90% or sometimes 80% market share. That means there is not so much competition. But if you see the figures now we don’t have 80% market share in terms of internet and that is good for us. Because we don’t want to be a monopoly in that market, and it is not good for the customers as well. But on the other hand, all those operators have to make their required investments. “Lawful interception” is the major key thing to prevent the terrorism over the internet. They need to do that kind of investment, but only this investment is 2 million Euros. They get some capacity and they distribute with cables, but it is not that simple. You need to care about your customers, and you need to do all the required investment like Lawful Interception, which by law it is actually required to offer that service to the Prosecution or Intelligent Services. The only company offering this service is ALBtelecom. I don’t see them permanent in the market. It shouldn’t be a simple buyer-seller business.
Anything else important to add?
If you see the position of ALBtelecom and Eagle Mobile and what they brought to the market, you realize that before Eagle Mobile prices were too high, customer care was not considered so much and bills were not distributed properly. So, in a few words, we brought competition to the market. Even other operators, at the time we entered the market, increased the quality of services. This was good for us and for the Albanians. Such responsibilities are very important to us. We care a lot about Social Responsibility. For example, this year we are announcing the Year of Technology, while last year was "Year of Education". Just before the end of the year we donated 25 computers to some brilliant students. These things are very important to us, and we believe we bring values to Albania. We have increased the quality of services. When our customers have a problem, actually we are working every day to reduce problems, but when any problems occur, they get support from the "Call Center".
But the legal basis should be ready also for Albania. I lived 8 years in the United States. When i was subscribing to a fixed line or internet there, it was enough to make just a phone call and to give your personal information to get the services directly. This is what we are trying to do in Albania. But there are some legal barriers here. Another thing is that we already are offering online invoices through the internet. There is no need to go anywhere to get the bill as you can receive an e-bill via the Internet. Internet offers many things. You can do researches, watch movies, get different information, etc.
We invested a lot in the Internet infrastructure to make the users enjoy these services. Of course, we must get rid of these barriers at first. It is important for the competitors in the market to invest. If you want to earn money quickly, telecommunications sector shouldn’t be that sector of practicing. All the competent parties, the government, AKEP or competition authority, must stop them. On the contrary it would damage the market. If no one invests, the user will not be able to enjoy the cheap prices and the good services. The investing companies should stay in the market, and so should those who offer something and care about the customer. So, the government and legal parties have to do their part.