The Business Year

Richard Shearer

AZERBAIJAN - Telecoms & IT

Back of the Net

CEO, Bakcell


Richard Shearer graduated in Accounting and Finance, and is a member of the Chartered Institute of Management Accountants. He joined Bakcell as CEO in 2011, and had previously held numerous senior positions in the telecommunications sector in the US, Asia, and Europe, at companies including Cable & Wireless in the UK, DiGiTelecom in Malaysia, and CCO at T-Mobile in the UK, as well as Empower Interactive Group, and BTC Mobile in Bulgaria.

Can you talk about your own brand smartphone? What informed the decision to launch this product? Ours is an Android smartphone of high quality that features a 4.3-inch screen. Our […]

Can you talk about your own brand smartphone? What informed the decision to launch this product?

Ours is an Android smartphone of high quality that features a 4.3-inch screen. Our strategy was to move from piling data via dongles onto our network to getting people to use their handsets to access and use the internet. The increasing sales of this terminal proved to be a key element of our 2013 strategy. The Bakcell smartphone was a means of achieving this quickly, and also of leveraging the trust invested in the Bakcell brand, especially in the area of mobile data and internet connectivity. The Sür@ (Bakcell 3G service) brand and the Bakcell brand are well known for providing the best mobile data and mobile internet services. Therefore, combining these with a handset of good quality and high functionality was an obvious step for us. Approximately 45% of the market uses Sür@. The key consideration with smartphones is to get people to use the internet on the go. We have seen a significant rise in the tablet segment in 2013 and are pushing smartphones and bigger screens in 2014, as well as devices that are somewhere between tablets and smartphones. What we see are more people using their phones to access the internet on a more ongoing basis. Dongles tend to be heavily oriented toward YouTube and Skype and similar programs. With handsets the array of uses is much broader.

What is Bakcell’s interest in mobile applications?

We don’t own an app store, as there are a number of challenges surrounding them in Azerbaijan. For many, you have to first register a credit card, the national penetration of which is low. Thus, purchasing an application can be a challenging activity for many customers. Moreover, many applications are in the English language, not even in Russian, and certainly not Azerbaijani. That being said, our partner, Manchester United, has launched an app globally in five languages, one of which was Azerbaijani. That was an important indication of how important our relationship with the club is to them. Generally, many customers are still at the experimental stage. They are downloading free apps rather than paid-for ones. The challenge, then, is to encourage customers to move to paid apps.

To what extent have you grown your 3G and 4G networks?

We have increased our traffic by more than 100%, and our revenues have grown substantially as a result. I think the number of regular users has increased dramatically and it is that regular usage that counts in terms of changing the nature of how people use their devices. We still believe there is a long way to go in 3G, especially beyond the peninsula. We offer good coverage and its improvement will allow us to access even more customers. We are looking at technology to widen our coverage dramatically compared to the competition. The motive behind the launch of an LTE network is the availability of LTE-enabled devices. For example, Apple does not yet enable iPhones for LTE in Azerbaijan, despite the fact that they are compatible. We will build the LTE system, but it is a focus for somewhere further down the line. First of all we need to monetize our 3G segment.

What do you expect to be the main events for Bakcell in 2014?

I expect mobile number portability (MNP) to gain momentum throughout the year. It has been long awaited and I think foresee a period of momentum building. In other major developments we are seeing fixed-line broadband providers begin to move back into the market. They created a market opportunity for the mobile providers with their limited offering at the time, whereby we observed stronger growth in fixed line in the latter part of 2013. I, in fact, expect to see a stronger fixed-line performance in 2014, which will motivate us to present greater mobility proposition to our customers.



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