SA’s telecommunications industry has become “a bit boring” and “looks too settled”, says new Cell C CEO Alan Knott-Craig, who was named on Thursday as Lars Reichelt’s successor at the mobile operator.
He appears keen to change that, promising big changes at Cell C, with a special focus on social networking, mobile broadband, improved distribution channels and a reinvigorated workforce.
He also predicts some “argy-bargy” in the industry as Cell C, under his leadership, begins to flex its muscles.
TechCentral editor Duncan McLeod sat down with Knott-Craig on Thursday and asked him about his plans for Cell C and his views on the state of the telecoms sector more broadly.
TechCentral: Some people say you’re crazy. You were enjoying the relaxed life and now you’re coming back to a very stressful job. Why?
Alan Knott-Craig: I hope it’s positive stress and not negative stress. I must say I got a bit tired of the negative stress in my life. I love positive stress. There’s nothing wrong with that. Cell C, to me, is fresh. I like the shareholders and I can certainly work with them. I only know a few of the staff, but the people I know are nice people. I think the people working at Cell C probably need a little more concerted direction, a little more enthusiasm, energy and leadership. It’s a bit like starting Vodacom 20 years ago, but with a customer base on 10m.
What are your thoughts on the state of SA’s telecoms industry?
Firstly, I think in the last year the industry has become a bit boring. We used to have quite exciting times. It looks a bit too settled.
Secondly, I think Telkom is trying hard but it’s fair to say it’s not there. I think Vodacom is doing a solid job. I think MTN is doing a solid job. And I think Cell C can do a hell of a lot better.
Cell C has 9m or 10m customers and has invested a lot of money building the network and from what I understand the size of the network is what it should be to have a decent network. For Cell C to join the fray properly and become something people notice every day and pay attention to, it needs to build a world-class network first. It is not possible to do this any other way.
Yes, it’s already busy doing that but my first priority will be ensuring we do indeed achieve that. If we can’t achieve that, it’s difficult to move forward.
In parallel, we have to need to reorganise the company so it is much more efficient, focused, empowered and energised. It should be like the company we tried to build 20 years ago at Vodacom. It should be a company where people love to work, where it’s fun, where people want to come first. You have to get than energy into the company.
Then there’s the marketing. Marketing is not a big deal, but there’s no point in trying to market something if you have nothing, so make sure you’ve got your network in place.
The distribution channels are something Cell C has lacked. We have to get a really professional distribution network. I know the distribution channels in the country very well. I was party to setting them up, so these companies are no strangers to me. I think they’re kind of excited because they can look forward to a little ‘argy-bargy’, maybe. If that’s what it takes, that’s what we’ll get.
But if you’re going to get into a fight, make sure you’ve got a product and a network behind you. You need a network that is reliable for voice and that is world class for data. On data, people want low prices, high speed and state of the art [technology].
Are you going to make money on data?
Data is a numbers game. The beautiful thing about data is the amount of data you can access in the world is unlimited, so you need to be able to get to it fast.
In SA, the biggest hold-up has been the international links have been congested and too expensive. Now we have quite a few coming in. The international side is taken care of. The national side has been hopeless and just couldn’t carry the traffic. All the companies are building pretty good national links now and in the next 12-18 months that should solve the national grid problem.
Now we need to solve the last-mile problem, but this will never be solved with fibre or wire. It will be wireless for the majority of people. The [latest] technologies are coming along at just the right time. Speeds will grow exponentially and, with the right backbone in place, traffic will explode…
Do you see a need for Cell C to migrate to next-generation long-term evolution (LTE) technology soon?
It’s no good getting into LTE ahead of the game. A lot of companies in Europe made the mistake of getting into 3G too soon. They spent a lot of money on licences and networks and waited four years to get the revenue rolling in and a lot of them went to the wall.
I think SA’s timing on 3G was perfect and I hope the timing on this will be just as good.
Social networks will play a huge role in telecommunications, by the way. At the moment, customers belong to the telcos; that could change. Telcos have to be very awake to that fact.
Do mobile operators like Cell C have to become social networking players themselves?
They have to understand if they want to maintain ownership of customers, they have to be sure they capture every aspect of their customer base. And if they want to move customers onto their base from other bases, they’d better offer them something sexy.
I admire Steve Jobs, as you know. Try and predict [what people want] and, if you can’t, make the consumer want what you invent. But you can’t get there unless the basics are right. There is no point in building a great radio network and not having enough fibre in between. People want high speeds.
When you were at Vodacom, you effectively kick-started the declining trend in mobile data prices.
The original pricing came from Vodafone. They didn’t want to bastardise the voice side. But I said who is going to buy the data? No one wanted it. We cut prices by 99%.
Do you see the falling price trend continuing? Do you think uncapped mobile data solutions will become popular?
They can only become a reality if you have a glut of bandwidth. We don’t. SA has this problem of not having enough bandwidth. If demand is bigger than supply, nothing will happen. When supply becomes bigger than demand, and that can only happen when all the fibre is in and pumping, then the dynamics will change. I think we are on the brink of getting there.
If you’ve been banking on getting R10bn from data, that’s going to change unless you increase your base or data usage. I think usage will increase. There needs to be some education [about data] in the country, but I’m always surprised at young black kids. They’re quite savvy when it comes to data. Go around the streets, they’ll tell you exactly what the world should be. Don’t think we’re dealing with unsophisticated society.
Do you see a need for mobile operators to play in financial services, for telecoms companies to get banking licences and to offer financial services products to their customers?
What networks have to do is provide every single service that requires communication to consumers. If banking requires communication and consumers want it, you’ve got to give it to them. If they want to do social networking, you have to offer it. If it requires communication, you’d better get into that game. So, I wouldn’t be surprised if banks become telcos and telcos become banks and you see a merging of these two worlds in the next few years.
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