Sigve Brekke on Te­lenor’s sim­ple, yet re­fined recipe for suc­cess in Asia

Norway-Asia Business Review - - Contents - By Eric Baker

Te­lenor had its fair share of scep­tics when it de­cided to en­ter the Asian mar­ket. Its first mar­ket was Bangladesh, which couldn’t be more dif­fer­ent than Norway in terms of de­vel­op­ment, pop­u­la­tion and tech­nol­ogy. But the group’s abid­ing belief be­fore en­ter­ing any mar­ket is if you have a proper op­er­at­ing model, you can make money. “Bangladesh was more of an ex­per­i­ment than set­ting up a company,” said Sigve Brekke, ex­ec­u­tive vice-pres­i­dent and re­gional head of Asia for Te­lenor Group. “And though we’ve fol­lowed a model in all the mar­kets we’ve en­tered in Asia, we’ve learned you can­not do the same thing in ev­ery mar­ket be­cause ev­ery coun­try is dif­fer­ent.” And yet, Te­lenor has been a run­away suc­cess by any mea­sure. As Mr Brekke likes to point out, 5 mil­lion peo­ple see the company’s pro­peller logo in Norway, but 1.1 bil­lion peo­ple do so in Asia. It’s one thing to talk about fol­low­ing a dif­fer­ent strat­egy, but en­tirely dif­fer­ent to be suc­cess­ful in so many var­ied cul­tures and coun­tries. “In our business it is ex­tremely dif­fi­cult to cre­ate sus­tain­able ad­van­tages,” he said. “Pric­ing and brand­ing are easy to copy, but what we are sell­ing is up in the air. When we talk about the Te­lenor way, I think there are two fac­tors that are con­sis­tent, that we can con­trol and take across bor­ders. The first is the cul­ture, which is built on re­spect for oth­ers, pas­sion, and an at­tack­ing mind­set in the mar­ket. Th­ese val­ues are ex­actly the same in ev­ery mar­ket. The sec­ond is the peo­ple be­cause they man­age th­ese val­ues, and it is not easy to find the right peo­ple.” Te­lenor’s mantra is in­ter­net for all. One ex­am­ple of the chal­lenges the company faces de­pend­ing on the mar­ket takes place in Pak­istan and Bangladesh, where the in­ter­net is seen by some as evil, said Mr Brekke. The gov­ern­ments of th­ese coun­tries are try­ing to block ser­vices such as YouTube and set up re­stric­tive fil­ters un­der the guise of child pornog­ra­phy laws in or­der to keep peo­ple se­cluded from the in­ter­net. Te­lenor is work­ing to ed­u­cate the peo­ple

and gov­ern­ments in those coun­tries about the ben­e­fits the in­ter­net can pro­vide to their way of life, he said.

Much of that work in­volves show­ing peo­ple by its ac­tions, as Te­lenor bought a bank in Pak­istan that now has 4 mil­lion ac­tive cus­tomers and $4 bil­lion in trans­ac­tions per year. Only 15% of the pop­u­la­tion has ac­cess to bank­ing ser­vices in Pak­istan, so the company de­cided it could af­fect the big­gest change by start­ing a mo­bile bank. The bank now han­dles salaries, re­mit­tances, trans­fers and pay­ments – all via peo­ple’s mo­bile phones. Te­lenor’s strat­egy is to show peo­ple the util­ity of the in­ter­net and let de­mand grow or­gan­i­cally. It started a mo­bile health­care ser­vice in Bangladesh where peo­ple can have live video con­sul­ta­tions with doc­tors from a hos­pi­tal be­cause less than 50% of births in the coun­try are regis­tered. In Thai­land, Te­lenor started a pi­lot project where farm­ers get up­dated mar­ket prices by SMS and can read about mod­ern agri­cul­tural tech­niques on­line, while its smart­phone app tells farm­ers how much and what type of crops to plant. Mr Brekke was speak­ing at the Norway-Asia Business Sum­mit in Thai­land, and a num­ber of the par­tic­i­pants were prospec­tive or fledg­ling Euro­pean in­vestors in Asia. He of­fered three sim­ple tid­bits of ad­vice for any­one think­ing of mov­ing a business to the re­gion.

Te­lenor’s strat­egy is to show peo­ple the util­ity of the in­ter­net and let de­mand grow or­gan­i­cally.

“First, you have to be lo­cal, which means un­der­stand the mar­ket,” he said. “You can’t use the Nor­we­gian way be­cause the cul­tures are so dif­fer­ent. Sec­ond, don’t out­source the part­ner­ship. You need to be the majority owner. And fi­nally, you have to be rel­e­vant. The lo­cals will al­ways look at you as a for­eigner. If you sim­ply send tons of money back to Norway, you won’t sur­vive long. In ad­di­tion to show­ing peo­ple stud­ies that doc­u­ment how ac­cess to tele­phony and in­ter­net drives an in­crease in GDP, we also of­fer bank­ing and health­care ser­vices. You need to take an ex­tremely long-term ap­proach, which is not al­ways easy with a business, be­cause it can take years to build up.” Te­lenor has not been suc­cess­ful in ev­ery Asian ven­ture. Mr Brekke re­calls the company’s three-year run in Viet­nam, which never ma­te­ri­al­ized in an op­er­at­ing li­cense. But Te­lenor is gain­ing 2 to 3 mil­lion new cus­tomers a month in Asia, where the company gains 46% of its cash flow and 42% of rev­enue, he said. Mr Brekke cred­its the back­ing of the Nor­we­gian gov­ern­ment, the company’s ma­jor share­holder, for al­low­ing it the long-term sta­bil­ity needed to ex­pand abroad. Some of Mr Brekke’s ad­vice sounds mes­meris­ingly sim­ple, but when you look at how it is put into prac­tice there is an art to Te­lenor’s ac­tions. His in­vo­ca­tion that “the only way to suc­ceed is to meet cus­tomer’s needs” should be ob­vi­ous to any­one who’s ever run a business or taken an en­trepreneur­ship class. But Te­lenor looked at the ru­ral ar­eas in some of its mar­kets and de­cided to change the way it com­mu­ni­cates and makes of­fers to cus­tomers. Th­ese ar­eas are so cash-driven, said Mr Brekke, the company de­cided to de-pack­age its prod­ucts and sell them in smaller bun­dles be­cause peo­ple there of­ten live hand-to-mouth. Te­lenor started to sell one hour of Face­book time, or one day or even a week. Con­sumers latched on to this tac­tic and it is now an ac­cepted prac­tice. Like most mo­bile com­pa­nies, Te­lenor re­alises the fu­ture lies with data and not voice. Asia has 145 mil­lion in­ter­net users and Thai­land has 120% mo­bile pen­e­tra­tion rate, but Myan­mar only has an 11% pen­e­tra­tion rate. The company is ex­cited about the po­ten­tial in Myan­mar, as the pen­e­tra­tion rate was 1% be­fore the coun­try opened up. Mr Brekke pointed to on­line mar­ket­places in the coun­try such as mu­ al­ready of­fer­ing a mo­bile ver­sion. Thai­land will un­doubt­edly be see­ing more of Mr Brekke in the fu­ture as he was ap­pointed in­terim chief at DTAC, Te­lenor’s Thai sub­sidiary, in Septem­ber after a shake-up of man­age­ment. Time will tell whether he can mar­shal the same re­fined tac­tics in this mar­ket.

Photo: TNCC

Sigve Brekke, Te­lenor’s Head of Asia sees enor­mous op­por­tu­ni­ties in pro­vid­ing in­ter­net for all.

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