TBY talks to Alireza Gh. Dezfouli, CEO of MTN Irancell, on increasing market share, the opportunity for new technologies, and areas for investment.
THE BUSINESS YEAR What were the highlights of Irancell’s activities in 2011 and 2012?
ALIREZA GH. DEZFOULI In 2011 and 2012 we reached a 47% market share in the local mobile telecommunications sector. We managed a very stable network to satisfy subscriber requirements and offers acceptable coverage. However, we are continuously working to improve our quality. MTN Irancell has achieved all the targets set under its license with the Ministry of ICT. The company has also begun to offer several new services to send and receive e-mail, as well as develop new platforms for making bank payments. We are working on expanding our channels for sales in order to open up opportunities to everyone, particularly by providing fast access to our network and offering recharge cards and other services. Our corporate offerings are also expanding; we offer our corporate clients VPN, APN, and mobile newspaper services, which allow them to broadcast their bulletins or other documents through our system. Newspapers and other media organizations are also able to utilize this mobile technology.
What specific approach do you have for corporate services that differentiate you from other mobile providers?
We tailor our services to the needs of our clients. The company also offers the enterprise messaging system (EMS) to our corporate clients. This system allows companies to communicate quickly and efficiently both internally and externally. For example, EMS is useful for banks as they communicate with their customers. Companies come to us with their needs and we create total solutions for them. There are an unlimited number of solutions that we can provide to different segments of the market.
What services are you promoting in order to attract a larger customer base and expand your market share?
One important service is our mobile media portal, or Vitrin, which is a platform with a variety of content. Through Vitrin young customers can access wallpapers, ringtones, and music. This is one of our main data services. We also provide internet access through GPRS, which is very fast and reliable. MTN Irancell is expanding its e-mail and media offerings for younger customers. In addition, we are trying to adapt our product offering according to the feedback we receive from the market. Every month, we analyze our subscribers’ feedback in order to identify solutions and provide better and high-quality customer service.
Iran’s mobile penetration rate is up 129% in 2012. In this context, how does Irancell shape its competitive strategy?
Iran is not the only country that is experiencing mobile penetration rates higher than 100%; this is common across the Middle East. Our growth during the first eight months of 2012 shows that there is still plenty of room in the market and it is not yet saturated. How can we maintain our market share? First, we provide high-quality service. During the last few years, we have maintained a higher level of quality than our competitors. We have exceeded our goals according to a number of important key performance indicators (KPIs). We have reduced the number of dropped calls and improved success rates. We have also expanded coverage and call quality. We believe that the demand for data is increasing significantly—not only in Iran, but also globally. Therefore, the company is making preparations to expand bandwidth to meet this growing demand. We are also adding new services such as the banking system, LBS, e-mail products, and other content. The key way to maintain our position is for us to adapt our capabilities to the subscribers’ requirements.
Earlier you mentioned coverage. What is the actual coverage that you have in Iran?
Irancell covers more than 80% of the population of Iran. The majority of the urban hubs in the country and about 50% of the villages are covered. We are a very young operator, and it hasn’t been easy to obtain 80% coverage. We are optimistic about further increasing coverage in 2012 and 2013 while maintaining high KPIs in areas such as call quality. There may be some specific zones that experience a lack of coverage due to interference. However, all of the main cities are covered.
How are you planning to cover other cities?
Over the last eight months, we have experienced very significant growth in terms of the number of subscribers. In 2012 and 2013, we aim to invest substantially to maintain a high level of quality and expand coverage. Our customers are used to high quality, and we are not going to change our policy because the number of subscribers is increasing. Our plan is to invest more, especially in network technology. We also plan to invest in improving the speed of data services and offer more services based on data. We want to continue to improve the services that we already offer.
What is the current data speed, and how do you plan to increase it?
Technology generation 2.0 and 2.5 is limited to GPRS. Technology EDGE or 2.75 is limited to less than 200 kilobytes per second (kbps). With the existing license and technology that we have, data is limited to this speed, but we also need to have enough capacity in our network to support all the subscribers. With this technology the data speed is limited.
What challenges do you encounter in your operations? What are the strengths and weaknesses of the local mobile sector?
One of the challenges we face is that we do not yet have access to 3G technology. At the same time, we have better quality and coverage than other companies. The second challenge is that we sometimes face difficulties with municipalities, landlords, or operators in expanding our network sites. Despite this, the market is very good and the demand for new services is high. This means that there is substantial incentive for operators to make significant investments.
In 2011, the company introduced WiMAX internet services. How is this project developing and what other internet services are you planning to offer in the near future?
WiMAX is a new service being offered for the first time in Iran. We have tried to educate our subscribers about the benefits of this new system and we have learned a lot from the market. We have introduced ourselves not only as a mobile operator, but also as a major telecommunications company. At Irancell, we are working to expand our internet network in the way that we have done with GSM in different provinces. Currently, Irancell has licenses in seven provinces. We have launched VPN products on WiMAX and have given the opportunity to banks and large corporations to use our network to support their systems. We are also aiming to activate VoIP technology so as to provide this service to our customers in the near future as well. At the same time, we are planning to combine our service options such as GSM and WiMAX to offer dual plans to our clients. Furthermore, we are testing IPTV technology. Currently, internet and VPN are available, and we have both private and corporate users.
How is Irancell integrating value-added services?
For all of the value-added services, we employ third parties. We have a very attractive revenue-sharing system that incentivizes third-party investment and participation. For example, the Vitrin service enjoys participation from private companies. We implemented the infrastructure to create opportunities for any company that wants to get involved with value-added services. There are almost 20 companies offering content with Irancell. They’re offering many new services that are controlled and managed independently. Our platform for value-added services is profitable today, and there is the potential for increased profitability in the future, as well as opportunities for any company to invest.
Are you planning to invest heavily in this area?
We have begun offering a banking platform through USSD, a system that offers more security through SMS verification. Now we are investing heavily to increase security and create extra opportunities for banks and subscribers to do more with mobile technology. This is the same for all of the value-added services we provide; we are aiming not only for growth, but also for increased quality.
How would you evaluate your position in the market?
One of our major focuses is quality. The main reason we are equipped to achieve a strong market position is because we maintain superior service quality. We are investing and we plan to invest more. For 2013 and 2014, we are planning to invest significantly in broadband technology such as 3G, 4G, and WiMAX in order to increase data speed and capacity. Another area where we excel is with corporate business. These focuses contribute to maintaining a strong market share and position in the country.
What are your expectations for 2013?
We will continue on the same level of growth as in 2011 and 2012, and we expect to achieve all of the KPI targets in coverage, quality, and services. We hope to get a license to launch 3G in response to the large demand from our customers. We expect a strong market in 2013. So far, it has been a very successful joint venture, especially for the ICT sector. We believe that we set a very strong example for other sectors to follow.
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© The Business Year - September 2012