“Five years from now if anyone in the industry sees themselves as being in the telecom industry, their future will be bleak; we will be embracing more than traditional telecom services.”

Marylou Andrew interviews Lars Christian Iuel, VP/CMO, Telenor.

MARYLOU ANDREW: Having acquired 95 million customers, is the telecom market reaching saturation level and if so, how will brands evolve?

LARS CHRISTIAN IUEL: I don’t think the market is saturated; it is becoming more mature. Brands have been very focused on price and on awareness, but they will have to evolve because anyone can match price. To make a sustainable difference you have to connect emotionally with your customers and support that with functional attributes. Price, quality of network and customer service are not sustainable differentiators.

MLA: How will the evolution of brands impact the way they are marketed and advertised?

LCI: I don’t think there will be any more price-based communication. We will not be able to deliver the same message to everyone; there will be more targeted communication based on micro segmentation and the behaviour and attitude of the customers. There will be less focus on awareness activities and a lot more on direct communication, be it in-shop or one-on-one and it will be much more emotional and value-based. Our products will become more than telecom brands. Five years from now if anyone in the industry sees themselves as being in the telecom industry, their future will be bleak; we will be embracing more than traditional telecom services.

MLA: Will ‘voice’ continue to be the major revenue earner? What other areas will you derive ARPU from in the next few years?

LCI: Over 90% of the revenue is coming from voice and SMS and even five years from now this is what will be paying our bills; after that we will see growth in other areas. In Kenya, 50% of the adult population only uses services such as mobile accounts and mobile commerce. Other African countries have leapfrogged straight into mobile internet. This is where the growth will come from.

MLA: How has the telecom companies’ investment in broadband and WiMax affected their core business and what is the potential here?

LCI: Mobile internet is a generic term for all kinds of technological solutions and the mobile handset is the best terminal to start with because the penetration is very good geographically. The existing GSM-based technology is already good enough and we believe it should be based on a mobile handset.

MLA: What practical measures need to be taken to realise the potential of mobile commerce in Pakistan?

LCI: This service has huge potential because only 12% of the population has access to, or use, financial services. The SBP is very proactive in promoting mobile commerce. With the high penetration of mobile handsets and SIM cards in Pakistan, we are equipped with all the resources, be it to pay bills, transfer money, seek information or have cash in a mobile account. The most expensive part of running a bank is the branch network. Today every branch in Pakistan has 20,000 customers which makes things very inefficient because there are long queues, etc. With easypaisa we already have 150,000 outlets and this makes the footprint for us and for our customers much wider and less costly. Since we launched easypaisa we have had more than a million transactions worth over three billion rupees, so we see potential for ourselves, for Pakistan and the Pakistani people.

MLA: There are widespread rumours of a possible merger. Does the telecom industry need a merger and if it does happen, how will it impact brands?

LCI: Pakistan is one of the most competitive telecom markets in the world, with the lowest prices and margins. However, with so many operators, this will not be sustainable in the long run, therefore consolidation will be healthy from both the operator’s and the customer’s point of view; maintaining the quality we have today requires having margins to both defend and sustain continuous investment.

From the interview ‘Whose Line is it Anyway?’ – first published in the July-August 2010 issue of Aurora.