‘My man­date is to drive data’

. . . new Econet CEO spells out vi­sion for grow­ing telecom­mu­ni­ca­tions gi­ant

Lesotho Times - - Big Interview -

ECONET Tele­com Le­sotho (ETL) re­cently ap­pointed Leon de Fleu­riot as its Chief Ex­ec­u­tive Of­fi­cer. The Le­sotho Times ( LT) caught up with Mr de Fleu­riot for a wide-rang­ing dis­cus­sion on his back­ground and plans at the helm of the telecom­mu­ni­ca­tions gi­ant among other is­sues. Be­low are ex­cerpts from the in­ter­view.

LT: Could you please give us a brief back­ground of who you are and your ex­pe­ri­ence.

de Fleu­riot: My fam­ily is of French an­ces­try. I was born and ed­u­cated in South Africa. I am mar­ried to my lovely wife Reeva and we have been blessed with three lively boys.

Although I grad­u­ated with a Bach­e­lor of Com­merce in Eco­nom­ics, over the course of my ed­u­ca­tion I tended to fo­cus more on the tech­ni­cal side of ICT than the fi­nance side. I come from a tech­ni­cal back­ground and have spent a lot of time in­tro­duc­ing new sys­tems and pro­cesses into busi­nesses to im­prove their per­for­mance. I have also spent con­sid­er­able time in man­age­ment and oper­a­tions fo­cus­ing on data, mak­ing prod­uct sets in a way that cus­tomers can un­der­stand, and also help­ing cus­tomers to get the most out of data-cen­tric prod­ucts and value-added ser­vices that sit on top of data.

LT: Where were your pre­vi­ous two post­ings be­fore you were posted to Le­sotho?

de Fleu­riot: I spent five years in Zim­babwe where I man­aged sev­eral port­fo­lios, and one of my no­table suc­cesses was the launch of the 3G net­work. We drove in­ter­net us­age from 35 000 to 1,2 mil­lion users in the first year through ag­gres­sive pric­ing as well as the suc­cess­ful launch of low-cost en­try-level de­vices. I moved back to the head of­fice in South Africa at the end of 2014 where one of my func­tions was to over­see the data per­for­mance of Econet oper­a­tions in Africa.

LT: You have been in Le­sotho for over two weeks now. How would you char­ac­terise telecom­mu­ni­ca­tions in Le­sotho in re­la­tion to prices, de­vices and tech­nol­ogy?

de Fleu­riot: Le­sotho has about 75 per­cent cell­phone pen­e­tra­tion, but what sur­prised me is the level of in­vest­ment ETL has made in in­fra­struc­ture. We have a ro­bust fi­bre back­bone through­out the King­dom. We can pro­vide cus­tomers with fi­bre to the home, some­thing which is only just start­ing in South Africa. Some of our tech­nol­ogy is just way ahead of the tech­nol­ogy curve. We have an LTE (Long-term Evo­lu­tion) net­work that has more spec­trum than those in South Africa. So we can run fast net­work speeds and we can do this coun­try­wide. From a pric­ing per­spec­tive, we are fairly in sync, al­beit slightly more ex­pen­sive, when we bench­mark against the re­gion. How­ever, this must also be seen in the con­text of the cap­i­tal-in­ten­sive net­work up­grades that we have un­der­taken and con­tinue to un­der­take and also the ma­tu­rity of net­works on the other side of the bor­der. Nonethe­less, we should see price ra­tio­nal­i­sa­tion as we ap­proach 100 per­cent mar­ket pen­e­tra­tion and we ex­pect price will be driven by mar­ket forces there­after.

LT: Hav­ing worked and man­aged Econet oper­a­tions in sev­eral coun­tries, what is your im­pres­sion of ETL?

de Fleu­riot: ETL is a gem. It has great po­ten­tial. It has a team that un­der­stands the en­vi­ron­ment and the tech­nolo­gies. It has mas­sive as­sets in terms of tech­nol­ogy that have al­ready been in­stalled. We have just fin­ished up­grad­ing our LTE and 3G net­work. So we are poised to take all that world class tech­nol­ogy to the mar­ket and pro­vide new cut­ting edge ser­vices to the King­dom.

LT: You have just launched your 4G/ LTE net­work. Given that less than one per­cent of the de­vices in the mar­ket are Lte-ca­pa­ble, in­ter­net pen­e­tra­tion is low and data charges are rel­a­tively ex­pen­sive, what is the think­ing be­hind this?

de Fleu­riot: What you have to un­der­stand is that the mar­ket is chang­ing all the time. You have to be able to an­tic­i­pate what the changes are go­ing to be. We have a plan that is go­ing to take us to a new place for the coun­try. What we are see­ing is rapid growth in con­sump­tion of data. This mas­sive ac­cel­er­a­tion of data con­sump­tion is be­ing driven by the pro­lif­er­a­tion of mul­ti­ple de­vices such as smart­phones, tablets, PCS and smart de­vices like TVS, fridges etc. It is also be­ing driven by the change in the be­hav­ior of con­sumers who are grav­i­tat­ing to­wards con­sum­ing media through stream­ing ser­vices like Youtube and Net­flix. There is a huge data-cen­tric en­vi­ron­ment that is be­ing cre­ated in our homes and busi­nesses that ETL is poised to de­liver to cus­tomers. These en­vi­ron­ments need to be con­nected to the out­side world. The routes for this to hap­pen are the mo­bile net­works (3G and LTE) and the fixed net­works (cop­per (asym­met­ric dig­i­tal sub­scriber line = ADSL) and fi­bre). Then all these points need to be con­nected to the back­bone car­rier, and ETL pro­vides 90 per­cent of that con­nec­tiv­ity be­cause the coun­try­wide fi­bre back­bone is al­ready in place.

LT: What was your man­date when you were ap­pointed CEO of ETL? de Fleu­riot: My man­date is to drive data. My back­ground is that of a data spe­cial­ist, there­fore my man­date is to drive data.

LT: As a newly-ap­pointed CEO, the ex­pec­ta­tion was you will talk about the changes you will bring to ETL from a cor­po­rate stand­point. How­ever, based on this dis­cus­sion, it is clear your pas­sion lies in bring­ing changes to the pro­vi­sion of tech­no­log­i­cal prod­ucts and ser­vices for the cus­tomers, rather than in­ter­nal changes.

de Fleu­riot: Ev­ery­thing starts with the cus­tomer. If we do not have cus­tomers, we are dead in the wa­ter. So all that we do has to be driven by the cus­tomer. The or­ga­ni­za­tion is here to serve the cus­tomer be­cause that is what is go­ing to gen­er­ate rev­enue and, in turn, prof­its. We have to keep our fo­cus on the cus­tomer; the or­ga­ni­za­tion will have to adapt to meet the needs of the cus­tomer.

LT: In­ter­net pen­e­tra­tion is linked to a coun­try’s de­vel­op­ment. Le­sotho has only about 15 per­cent pen­e­tra­tion (ITU: 2013) com­pared to coun­tries in the re­gion like South Africa 48 per­cent, Zim­babwe 47 per­cent. ETL is part owned by gov­ern­ment, and by ex­ten­sion the na­tion. What are you do­ing as ETL to en­sure bet­ter pen­e­tra­tion, af­ford­able data charges and bet­ter cov­er­age? Shouldn’t the high cap­i­tal cost on get­ting the latest net­work up­grades be bet­ter spent on en­sur­ing uni­ver­sal ac­cess?

de Fleu­riot: Ev­ery study com­ing out shows that the con­sump­tion of data is go­ing to quadru­ple in the next five years. A four­fold in­crease in traf­fic is very dif­fi­cult to build around. So what do you do? You look at the next tech­nol­ogy that al­ready has ef­fi­cien­cies built in. The next level of tech­nol­ogy is LTE. It might not nec­es­sar­ily cover ev­ery­body and pro­vide uni­ver­sal ac­cess be­cause it is de­vice de­pen­dent. How­ever, the top-end cus­tomers are al­ways get­ting new de­vices and this has the ef­fect of free­ing up ca­pac­ity on the ex­ist­ing net­works for oth­ers to join in. It might ap­pear that it is too soon to bring LTE coun­try­wide, but I do not think so. I think it is at just the right time. As all the stud­ies are show­ing a huge de­mand in data, we would rather have the ca­pac­ity that we can grow into. There are ef­fi­cien­cies in the new tech­nol­ogy, it’s cheaper to de­ploy, cheaper to run. So the cost base we are fac­ing with the newer tech­nol­ogy com­pared to the older tech­nol­ogy is much lower, which leads to lower prices for the cus­tomer which in turn will drive con­sump­tion. So our re­cent net­work in­vest­ment fits our strat­egy go­ing for­ward.

The key is to get a whole lot of de­vices at an af­ford­able price so that we can spread ac­cess and give peo­ple the op­por­tu­nity to move straight up into LTE.

LT: What is your vi­sion for ETL? Where do you see Econet in the next five years?

de Fleu­riot: Strate­gi­cally, we are go­ing to dom­i­nate the data en­vi­ron­ment in the next five years via our ADSL, fi­bre, LTE and 3G net­works that we have just up­graded. We were a lit­tle be­hind in terms of the mo­bile en­vi­ron­ment, but no longer. We are now up to speed, in­deed at a world class stan­dard, es­pe­cially for pre­mium cus­tomers that can en­joy our LTE in­ter­net on their mo­bile de­vices. The fu­ture is data.

LT: The fu­ture is data. Are you not wor­ried by this be­cause you are heav­ily in­vested in the voice net­work? I am aware of some fixed net­works try­ing to block In­ter­net call­ing like Skype, What­sapp and Viber. What’s your take on this?

de Fleu­riot: We do not block any in­ter­net call­ing pro­to­cols. In any case, why would you want to chase a Skype cus­tomer to another net­work? If a cus­tomer changes his be­hav­iour from cel­lu­lar net­work to IP net­work, who are you to tell him that he is wrong? Chang­ing con­sumers’ be­hav­iour is not easy. You can in­cen­tivise them to a point, but not en­tirely change what they want to do. By putting lim­i­ta­tions and blocks, by not be­ing cus­tomer cen­tric, you are just go­ing to drive your cus­tomers away. We do not have the lux­ury to do that.

LT: We are in a du­op­oly mar­ket where there are only two cell­phone net­work ser­vice providers. How do I know as a cus­tomer that I am get­ting the best price pos­si­ble, not the best price to beat your com­peti­tor?

de Fleu­riot: The du­op­oly is­sue does not arise be­cause you have bench­marks across the bor­der in South Africa. We might not al­ways be able to be as cheap as South Africa as con­sid­er­a­tion has to be given to the cap­i­tal cost of the net­work that we have had to build in very chal­leng­ing ter­rain. How­ever, we can­not ig­nore that mar­ket be­cause of the close re­la­tion­ship be­tween the two coun­tries and there­fore we must strike a sen­si­ble bal­ance on pric­ing.

LT: In clos­ing what would you like to tell Ba­sotho.

Watch this space!

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