Airtel Chief Executive Officer Chris Tobbit shares his company’s plans about 3G with the Dhaka Tribune.
How is Airtel focussing on 3G-market penetration?
We are delighted that the country is entering the era of 3G. Having gone through the transparent and consultative auction process, we are very enthusiastic about bringing high quality 3G services.
We have already had our first test call and video call. We should have limited coverage in our office in a few days, allowing employees to test 3G network and experience. By October, we will launch 3G services in some areas of Dhaka and Chittagong. By November, most of Dhaka and Chittagong and parts of Sylhet will get coverage. By early January, we will be done with the first phase of the rollout obligation, specified in the license.
How will this benefit the industry?
The country has very low broadband penetration and there is a strong latent demand for broadband. Mobile broadband always brings additional advantages of mobility. We look at it a little bit beyond that because the objective is not just simply to be a service provider but to help the government connect with consumers. The government is on one hand, and of course, private enterprises are on the other. So, in six to 12 months, we would be looking at forging a few vital public private partnerships (PPP) to ensure that essential government services are actually brought through us.
Do you think 3G will attract new customers? What is your expectation of growth?
Currently, about 8% of our consumers have 3G enabled handsets. There are three key areas to be mastered by a service provider before 3G penetration can reach a meaningful level. One is content, the second is bandwidth, and the third and most critical is devices. Devices will be the key here: how quickly can you ramp up this consumer to 20%. Touching 50%, however, depends on supply and demand. It also depends on the latent demand that would bring the prices of the handsets to affordable levels. We feel that the government can play a stellar role by either giving tax and import duty holidays or at least reducing the import duties for a one to three year time frame so that we can bring the prices of handsets down.
Will 5MHz spectrum be enough?
In India, Airtel, Vodafone, and Idea have 5MHz spectrums. 3G is a little bit different from 2G in terms of the loading. If the network gets overloaded, the experience degrades. It also causes coverage shrinkage. Therefore, the operator which has the best consumers to MHz spectrum ratio will provide the best quality. Airtel has by far the best ratio.
What are the new aspects of the mobile services that the consumers will experience through 3G services?
Content plays a big role here. So, the world over surprisingly 3G is used residentially rather than when people are out. In Europe 75% of 3G usage happens at the residences at night where people have access to high quality wired broadband. So, which obviously means that the convenience of having information available to you on your device, whatever that device may be, outweighs even having it on a wired facility or Wi-Max facility close by. So, that convenience will come to all of us. Content plays a key role apart from the obvious developments and enhancements that people will enjoy which means high-speed access to social networking, gaming, and entertainment. On the business side, access to business applications. All of these will take business and casual internet user (mobile internet user) to the next level. But the biggest impact is on your productivity. What used to take you may be five minutes to access will take you 20-30 seconds.
How do you think this will impact us in terms of social and economic one? You know, Bangladesh has been always pioneering in social development projects. How will 3G help?
Well, that’s an area of development for all of us. That’s an area where we have to now sit down and work with the government and the NGOs and private entrepreneurs who are interested in this area to figure out how we can actually bring about social change. So, it’s not an area where I have an immediate answer for you but it’s an area of immense interest to me personally and to marketers within Airtel.
In terms of, you know, we have 8% of the people using smartphones and they have potential to access 3G. If you were to move the market to 20%, how are you going about to educate the potential customers?
That’s such a great question. I don’t know if you have noticed, but actually over last few days we have launched a ravenous campaign. So, the media is covering it. And we plan to as far as possible, completely encircle it to a 360 degree sort of education campaign.
One is in the area of tariffing and transparent tariffing. So, we have to educate customers about 3G tariffing because the bill shock is likely to result to a customer who has been used to long sessions and now suddenly the session will happen much quicker which will leave him more time to play around with his device more which can result in a temporary increase in his monthly spend. So, that’s one area of awareness.
The second is in the area of devices because device experience changes dramatically. HSPA versus non HSPA device, dongle versus smartphone, smartphone versus non-smartphone. Even within dongles, mimo which is multiple input multiple output dongle versus a non-MIMO dongle the experience is dramatically different. So, we are also mindful of the fact that Eid is around the corner. People who went shopping and the coinciding of the 3G launches which will happen at that point of time, people should make informed decisions about what to buy so that they have the best possible experience.
The third, which is a critical one, is in the area of helping customers to correlate the usage that they do with the amount of data consumed. So, in other words, if I download a song or if I download a video what does that translate in terms of actual charge to me.
Currently, if there is an obstacle what is the obstacle that will be for Bangladesh 3G services?
Devices, devices, and devices! We are working with all the smartphones, the 3G non-smartphones, as well as the dongle equipment suppliers, but pricing is key here. Currently, the cheapest handset is available for over 50 dollars. We have to bring it down 20-30 dollars. If we are having handsets available eventually within 6 months at 19.99 dollars, I think that should be the target of the industry.
We have seen many countries have service providers actually have packaged long-term instalments so that it’s beneficial to the user as well as the affording that handset. Is there some kind of similar plan rolling out for the consumers?
Yes, we are in discussion with the service providers that between the two of us and an insuring agency of some sort, bank or an insurance company, that we will offer handsets of EMIs. I do want to stress here that we are not in the business of handset sales, but what we will do is try and bundle good quality with our phones which are sold through our distributors. But we are working with them to ensure that effective EMI schemes are on so that people who can’t afford the whole upfront cost should be able to take advantage of deferred payments.
