Sigve Brekke on Telenor’s simple, yet refined recipe for success in Asia
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 mudah.com.my 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.
Sigve Brekke, Telenor’s Head of Asia sees enormous opportunities in providing internet for all.