Telco CEO ad­dresses data boom

Lars Erik Tell­mann, who took over as CEO of Te­lenor in Au­gust this year, spoke to The Myan­mar Times about the phe­nom­e­nal growth in data con­sump­tion, pre­par­ing to com­pete with a fourth oper­a­tor and why Te­lenor has not repa­tri­ated a sin­gle kyat of Myan­mar p

The Myanmar Times - - Front Page - STEVE GIL­MORE s.gil­more@mm­times.com

Te­lenor chief ex­ec­u­tive Lars Erik Tell­mann talks about the coun­try’s grow­ing de­mand for data ser­vices.

HOW quickly is data us­age grow­ing and how much of Te­lenor’s rev­enue will come from data in the fu­ture? We have a cus­tomer base of 18 mil­lion and 64 per­cent are ac­tive data users. They use data in such large amounts that on a daily ba­sis our net­work is car­ry­ing around 360 ter­abytes.

To put that in per­spec­tive, [daily] us­age has in­creased around 1500 times since Jan­uary 2015. Still, we find [the use of dif­fer­ent data] ser­vices is lim­ited. Around 70pc of data us­age is on web brows­ing, and 77pc of that is on Face­book. The rest is stream­ing and video, of which 70pc is on YouTube. [Ac­tiv­ity] in other cat­e­gories of brows­ing is very small.

Around 40pc of my rev­enue is from data. I would not give fore­casts [on fu­ture per­cent­ages] but we be­lieve there is growth [po­ten­tial for data us­age]. The dom­i­nant fac­tor [in fu­ture growth] is more ser­vices used and a pickup in ru­ral cus­tomers get­ting from 2G to 3G and hav­ing their first ex­pe­ri­ence on the in­ter­net and be­com­ing ac­tive users.

How far have data prices fallen for cus­tomers? All prices have come down. You started off pay­ing per megabyte and now you have a sit­u­a­tion where we give Face­book for free. You have seen a rapid de­cline in [the] pric­ing [of] megabytes down to the unit fac­tor. We have two [data plans] My In­ter­net and Smart In­ter­net. [When we started] My was K6 per MB and Smart was K10, we later brought that down to K5 and K6.

On [our] pack­age where peo­ple get Face­book free up un­til 150MB [a day], you are then pay­ing for ex­tended us­age at K3 per MB. Over a month that’s 4GB [of free Face­book]. Even by western stan­dards you could say 4GB is a heavy plan.

You’ve said in the past that ev­ery­one in Myan­mar who wants a SIM card al­ready has one. If the fourth telco sched­uled to start op­er­a­tions next year will have to rely on tak­ing cus­tomers from ex­ist­ing firms, is there a con­cern it will of­fer un­sus­tain­able pric­ing or in­tense com­pe­ti­tion in other ar­eas? The gen­eral an­swer is that there’s ev­i­dence that if you go from a three- to a four-player mar­ket it gen­er­ally hurts the in­dus­try. We don’t spec­u­late on how [the fourth oper­a­tor] will come to mar­ket, but we’re clearly pre­pared for the dif­fer­ence sce­nar­ios of they can come to mar­ket and how we can make sure we al­ways have the best value and prod­uct.

MPs have re­ported res­i­dents com­plain­ing about the noise that tower gen­er­a­tors make. Is that an is­sue for the tower-build­ing com­pa­nies or is Te­lenor also in­volved? We are very much [in­volved] in those dis­cus­sions. We built 6800 sites pre­dom­i­nately through tower com­pany part­ners. In some vil­lages where con­struc­tion was not al­lowed in rice [farm] land [it was nec­es­sary] to build in a vil­lage, and there have been some com­plaints about gen­er­a­tors be­ing used that are not of the silent type. The first el­e­ment is to con­nect tow­ers to the grid, which gets rid of the prob­lem. Right now around 55pc of our tow­ers are fully grid-con­nected so you have no is­sues.

[In other cases] we’ve worked with the tower com­pa­nies to find so­lu­tions, one is to change to silent gen­er­a­tors; an­other is to al­ter­ing some [tow­ers] to [use] so­lar pan­els. We’re work­ing with the reg­u­la­tor to see if [in some cases] it’s pos­si­ble to forgo the re­stric­tion we were given on build­ing on farm­land. But out of al­most 7000 tow­ers we’re talk­ing about very few [cases of com­plaint].

What pieces of tele­coms in­dus­try reg­u­la­tion would you like to see put in place? Le­gal in­ter­cept [leg­is­la­tion] is still in the draft stage. It’s a draft based on in­put from the EU Com­mis­sion and it would ben­e­fit the whole in­dus­try and pro­vide more clar­ity in terms of how to han­dle re­quests from the au­thor­i­ties [for ac­cess to com­mu­ni­ca­tions net­work data].

[With­out that clar­ity] we have an ar­range­ment with our reg­u­la­tor in terms of what pro­ce­dure to fol­low in case of a re­quest. We only re­lease [in­for­ma­tion] if the po­lice ac­quire a first in­stance re­port from the mag­is­trates’ court, the court or­der con­firms the au­then­ti­ca­tion and the need [for a] re­quest, and we will then val­i­date it be­fore we re­lease any­thing. The num­ber of re­quests [we re­ceive] is pretty small, and [the num­ber we agree to] is ex­tremely small.

[Te­lenor re­port­ing in­di­cates the firm re­ceived 37 re­quests from au­thor­i­ties for data in 2015 and com­plied with nine. It had re­ceived 14 re­quests as of April this year, and com­plied with none.]

There have not been any re­quests [for] law­ful in­ter­cept, mean­ing lis­ten­ing in to live con­ver­sa­tion, and we have never been asked to shut down our net­work. These are in­ter­est­ing bear­ings for a coun­try that has just opened up, and we’ve been su­per­clear that if we have re­quest we will have to tell the me­dia through our trans­parency re­ports that we have been or­dered to shut down.

Gov­ern­ment of­fi­cials have sug­gested that for­eign com­pa­nies repa­tri­at­ing prof­its has con­trib­uted to ex­change rate volatil­ity. Has Te­lenor had any is­sues in mov­ing prof­its abroad? There are so many mis­con­cep­tions [about this]. It’s been raised in par­lia­ment that tele­coms [firms] are repa­tri­at­ing money out of the coun­try. We’ve been here for al­most three years and in­vested al­most US$1.5 bil­lion to build the net­work and in­fra­struc­ture.

We have not [moved] one sin­gle US dol­lar out of the coun­try. We have rein­vested ev­ery dime. There’s this myth out there that we don’t pay taxes. We’ve paid K80 bil­lion in taxes since we started our op­er­a­tions.

We have kept in­vest­ing and what you’ve seen here [in Myan­mar] is quite amaz­ing. It’s not that you make a one­off in­vest­ment and then you’re able to have a time lag un­til the next [in­vest­ment] cy­cle comes. What you’ve seen is that we took 2G and 3G and then sud­denly 4G is com­ing and then sud­denly a fourth oper­a­tor is com­ing. This in­vest­ment is com­ing in a much more com­pressed [time­frame] than what you’ve seen in tra­di­tional roll-outs [in other coun­tries].

‘[Data] us­age has in­creased around 1500 times since Jan­uary 2015.’

Lars Eric Tell­mann Te­lenor CEO

This in­ter­view has been edited for length and clar­ity

Photo: Sup­plied

Te­lenor CEO Lars Eric Tell­mann sees data con­sump­tion con­tin­u­ing to grow.

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