COLOMBIA - Telecoms & IT
Esteban Iriarte is a Harvard Business School graduate. Before joining TIGO, Esteban Iriarte served as CEO of Amnet in Millicom International Cellular, as COO of the same company, Director of Tepal, and Operations Manager for the Federal Capital for Cablevision. Other roles have included Operations Manager for the Atlantic Coast region and Manager of Special Projects for Multicanal SA, and Head of Products at L’Oreal.
I would say our focus on the customers made the difference, as well as our focus on innovation. We were the first to offer many products and services to Colombian customers. We focused on customer care, the quality of our network, and innovation as the pillars of our growth.
I really believe that the way we see the customer is totally different from how others see their customers and, despite us saying we are a telecommunications company, we focus on the quality of our network first. That is why, today, our network is by far the best in Colombia in terms of data services. We invest heavily in our call center and store locations, providing a unique customer-service experience.
Innovation can represent many things. For example, we strive to bring the latest phones to our customers, or to provide timely customer service for repairs, and we were also first in selling unlocked phones. We have a plan called the “Arma Tu Plan,” and we have more than 50,000 combinations of plans, so each customer can customize a special plan personally, which is something that is totally unique in the market, both in Colombia and in Latin America. It is really complex to put such a plan in place, but after that is done, no one has matched it, even now, and we launched that over a year-and-a-half ago. It is clear to our customers that we are different. If you see the growth of the industry in the past, with the numbers that the Ministry of Telecommunications has released, you can see that we are growing twice as fast as the market. The industry is growing 6% and, in the last two or three quarters, we grew by 17%. Clearly, our strategy to focus on customers is paying off.
It is a very concentrated market, the second most concentrated market in the world. There are challenges here, but I think that, over time, we will succeed in bringing in more competition.
We will achieve this through a greater focus on the customers, and bring innovation into all services. For example, with the merger that we are planning to do, we can add more products to our portfolio and better services. We have a lot of plans for the future.
Colombians love technology. I work in a number of countries, and I only see this in Argentina and Colombia; I think that they are unique in terms of technology and innovation. For example, in terms of data usage, you can see that it is important for them. It is a market with a lot of ambitions in terms of bringing in the latest technology or products. Also, the Colombian customer is quite demanding with regard to services. During the past year, customers have made it clear that they want better services. Data traffic is about 60%-70% of our revenue, and I think that the focus has to be on data in the future. I think we are among the most developed markets in the region, probably behind Argentina and Chile. However, it is still too low, and there are many opportunities to keep growing in that area.
We need to bring more affordable smart phones to the market. I think that the reality of this market is that smart phones are still too expensive for many people. Thus, the growth will come when we manage to lower prices. Another issue is to further develop the pre-paid segment in terms of data, because 70%-80% of our total business comes from pre-paid, and data is still a post-paid-dominated business. Our growth rate is stable, at 30% per year, so that is a good result, but we can grow faster.
I think that 4G will be a challenge; we are too early in the market. We probably need a little more time, and the customer probably needs some time because we are still working on the 3G network. We have the opportunity to enter the 4G segment, which is the premium network today, and we believe that we will launch by late-2014 or at the beginning of 2015.
Clearly, we really need to change the competitive environment that we have; it is too closed. It is difficult to compete with companies that possess a total monopoly, and I think that we need more support from the government in terms of placing limits on the competition and in establishing the right limits for the regulatory environment.
It is very relevant. The last time that I looked, the ICT sector accounted for more than 3% of the country’s GDP. It is relevant, and all markets of this industry are relevant. The country is huge; you can find more than seven cities with populations exceeding 1 million people. If you want to connect these seven cities, the best way to do it is by plane, thus you need a strong telecommunications environment to do this.
I’d rather see it as an opportunity for investment and I would say that, if you invest in Colombia, you would probably get a good return.
For the sector, I believe that it will probably grow between 5% and 8%.
Roughly we have 6,000 people, including direct and indirect employees.
© The Business Year – January 2014