Bakcell CEO talks companys priority development plans for near future

Trend News Agency's interview with Bakcell LLC CEO Nikolai Beckers.

- Mr. Beckers, how do you evaluate the current situation in the telecommunication market of Azerbaijan? Which challenges were encountered by the mobile communications market for the last several years and how did these challenges and changes affect the operations of Bakcell?

- I’d like to go back to a couple of years. I’ve joined Bakcell in April 2016, and it was the period of the second devaluation wave of the national currency. At that time, the situation for the whole business sphere in the country, including our business, was not very favorable. Devaluation of the national currency has affected the financial results of our company, as well as other aspects of its operations. Considering the fact that about 90 percent of the telecommunications equipment is being imported and purchased for foreign currency, our expenses have increased considerably during the said period.

Therefore, we had to take urgent measures aimed at substantial restructuring of our company. We have reduced our expenses and thanks to timely measures, we have managed to avoid any serious price increase and succeeded to give the people as much purchasing power as possible, despite the fact that prices paid by us for equipment became much higher and it has become much more difficult to get a return of investment and to make it a profitable business.

At the end of the day this is a company and we have to make profit, otherwise we won’t be able to make any investments. Thus, we have achieved at keeping our business profitable and avoided any damages to our investment policy.

Today, we see positive growth again, which is currently around 4-5 percent and the situation is improving. The market has stabilized and the economy has stabilized and this is very good for Azerbaijan. We even see it in the purchasing pattern, and the people have definitely traveled a lot in the summer 2018, because we observed a good level of usage in our roaming services. We are cautiously optimistic to see good results of this year’s end and the 2019. I think the growth will continue.

According to forecasts of such leading organizations as the World Bank and the International Monetary Fund, the country’s economy will grow by 2-3 percent during the next year. I also assume the growth will be in this range, even though we certainly hope to see even better improvement. Overall, I would say that certain measures should be undertaken for a further liberalization of the whole economic system, to make it more dynamic. And we as a telecom operator are very optimistic and will be happy to contribute to this process.

- Do you think people will talk less on the phone?

- Overall, yes, they will talk less on the phone. The main thing is that it’s not about whether they will talk less or more, it’s about the fact that people will talk differently. People will use the classic voice services less, but at the same time the use of various messaging tools will increase. But this doesn’t mean that the usage of telecommunications service will drop.

As you know, today the phones are like portable computers which connect us with the rest of the world. For us, the voice revenue is still very important and Azerbaijan’s telecom market is still very voice centric. However, there is a massive growth in data services and we see it not only in the increase of consumed traffic. The overall data services revenue has grown by 30-40 percent, while the voice revenue went down. This trend will definitely continue and to be in line with the latest tendencies, we are offering our customers various packages, which include voice and internet traffic.


- There is a tendency in the world that the operators stop using the regular SIM cards. Is there a possibility that the mobile operators of Azerbaijan will also stop using the SIM-card system in the future?

- Well, actually the operators would like to continue working with SIM-cards, because it is important from the stand point of keeping the ties, or having a stronger physical connection with the customers. On the other hand, there are so called OTT providers, such as Apple, Google and others, who don’t need the SIM cards since they tie the customers to the classic operators. In principle, you can use some kind of virtual SIM card or E-SIM card but the devices have to be ready for it. I think in the course of the next 2-5 years, many operators of the world will stop using the chip (SIM-card), and of course it will happen in Azerbaijan eventually. Technically this is not very complicated but it all depends on negotiations between the largest OTT operators and mobile network operators, as well as the readiness of the phone manufacturers.

- Which services will cease to exist in the near future? For instance, earlier this year your close competitor has announced that MMS service will be cancelled. What other services are also destined to disappear?

- Surely things come and go and this is called technical progress. Today, for instance people are using the SMS service less. Just as in any other area, the services are becoming outdated and useless, which is a very normal process.

Today, the consumers prefer using various messaging apps, video services and etc. You’re probably using WhatsApp as well. Of course, we will not cut the MMS service provisioning instantly, we still have it in our system. However, according to my persona forecast, in the course of the next 5 years not only MMS but SMS services as well are going to disappear completely.

- When do you think the first 5G trial zones in Baku will be available?

- Azerbaijan is a very fast-growing and progressive country. Innovation which is one of the main components of any country’s development is going along with any growth and therefore we fully support the government’s initiatives related to innovation. We will support development of innovative products and technologies, and application of the latest technological innovations in the country. Innovation needs further liberalization of the economy, and the companies have to have opportunity to make their ideas work. As one of the largest telecom companies in the country, we are able to support this.

Another important thing is that the high speed internet in Azerbaijan develops rapidly. I’m not talking only about mobile, but the broadband internet in general. Today it’s mainly 4G, and this technology is able to fully satisfy the needs of the customers in terms of speed. As for the 5G, we surely support the implementation of the latest technologies. However, just as with 4G, implementation of 5G needs a good and wide coverage of the fiber-optic infrastructure in the country, because the fiber optic is the way of implementing connection between the base stations.

Thus, we are ready to support all the initiatives of the government aimed at improvement of the fiber-optic network in the country, in order to be prepared for the launch of 5G. This is exactly the case when the government’s long term plans coincide largely with our own plans.

As for the actual 5G deployment, in my opinion, this will happen no earlier than 2022 and maybe even later. For us, the 5G will be a continuation of our 4G business, and we will be implementing it in the scope of our large and high quality LTE network. This is more a long term vision for us, which is of course also very important.

- Will Bakcell concentrate on the provision of the IoT (internet of things) services? Or has the process already started? Could you give us an example of the largest project implemented in this area?

- We are already implementing an IoT project with one of the agricultural companies. Although we are using our 3G network for this project at the moment, it is intended for working on more modern networks. Actually, the 5G network will be used for provision of a higher speed connection between the machines, which is the basis of all the IoT services.

- How many base stations are there in Bakcell network today, and how many have you installed during this year?

- We currently have more than 7000 base stations which cover 99% of the country’s population. Bakcell has a great network actually, and we definitely have the best data network in Azerbaijan, which we are very proud of.

We invested and continue to invest largely to development of our LTE network, and our LTE network is the largest in the country. Today, Bakcell is using the biggest LTE Network in the country, coverage and capacity wise with more than 1500 stations supporting up to 225 mbps data speed and this network is growing very fast. Bakcell 4G network is already available in more than 40 regions of Azerbaijan. This year, the company has launched almost 700 4G base stations, nearly 300 of which were installed in the country’s regions.

These efforts are being regularly recognized on the local and international level. Thus, just recently Bakcell was named “Azerbaijan’s Fastest Mobile Network” by world-famous “Ookla” company. It was confirmed that Bakcell has the best average download speed in the country, as well as the lowest average latency time on the market. Also, in 2017, Bakcell network has been recognized as the “Best in Test” in Azerbaijan by P3 Communications, being one of the most trusted independent authorities in mobile benchmarking. The P3 Communications held similar research for such large telcos as Vodafone, Orange Deutche Telecom and others.

We provide high quality and high performing network in combination with high quality services, and it works very well.

- Is Bakcell planning to outsource its network? If yes, what are the advantages of such option?

- We don’t intend to outsource our network to some mobile equipment providers to run it. This is actually happens from time to time in Western Europe or in US. I don’t see advantages of such an outsourcing in Azerbaijan. However, I believe we have done something much smarter.

As you know, Azerbaijan is not a very big country with around 10 million of population. That means that the maximum number of subscribers is also 10 million. At the other hand, the telecommunication equipment evolves quickly and as I’ve already mentioned, all the equipment is being purchased for a foreign currency and the profit is received in manats. Therefore, in order to cover expenses and ensure constant investments to the network, we had to think of a solution and we’ve found it.

We have created “Azerconnect” as a joint venture company which runs the major portion of our network for us. This way, we have managed to cut the costs of network maintenance and continue the investment input. So it was a very smart move from our side, allowing us to expand our 4G network and bring even more innovation and convenience to our users.

- The majority of payment systems are concerned that the launch of financial services by the mobile operators will seriously damage their positions. Is that really possible? How substantial are these concerns?

- The financial services sphere is strictly regulated by the government, and there are certain rules and regulations which need to be followed. As I already said, the progress never stops. We even today have certain projects in development, but I can’t actually talk about them right now. The modern financial services will become a reality sooner or later, and the traditional financial services providers need to be ready for changes. They will have to learn to coexist with the new realities of the market. Today, people in the world tend to prefer digital financial services. For instance, there is a method of transferring money from phone to phone by a simple touch without even using a physical credit card, which is very convenient.

Entry of new digital financial services to the market depends on legislation and on the regulatory measures. I’m confident that the government understands that switching to the modern services is very beneficial. From our side, we are always ready to support the government’s initiatives related to modernization of the existing financial services and introduction of new ones.

- What goals do you have today as the chief executive officer?

- Actually, we have a very consistent and coherent strategy, which we are going to follow. We will continue investing to the state of the art technologies and our 4G network in order to strengthen our core mobile business and compete on quality. We want to ensure that our 4G services are available all over the country, at the same time, work aimed at improving the quality of our network and services will also continue. Bakcell will become the most customer-oriented company on the local telecommunications market. At the same time, our team is working on digitalization of relations with our customers.

As you know, not long ago, we’ve introduced our “My Bakcell” application, which helps the customers to perform necessary operations with their numbers without visiting a customer care office. This is the most innovative approach to customer care, aimed not only at customer satisfaction but at digitalization of services as well.

Another objective is to keep working on introducing innovation in the country’s telecommunications sector, increasing the access speeds and developing the broadband internet in Azerbaijan. We are ready to invest not only to the mobile network but to the adequate fiber-optic network.


19.11.2018 13:13 / Hits: 343 / Print
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