‘My mandate is to drive data’
. . . new Econet CEO spells out vision for growing telecommunications giant
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!