Dated: 3 May 2003
|
Harry Smith
Managing Director, Digicel |
Digicel recently launched cellular networks in St. Lucia and St. Vincent, and
within days, they had signed up over 1,500 subscribers to the network in St.
Lucia, which has a population of 150,000 people.“With St. Vincent and St. Lucia
in the bag, we are now looking at Barbados, Aruba, Grenada and hopefully by
that time we would have gotten the license for Turks & Caicos Islands, Cayman
Islands, and Trinidad & Tobago.” says Harry Smith, Marketing Director, Digicel
When they opened for business in both St. Vincent and St. Lucia, people lined
up in the broiling sun, not moving until they got their Digicel mobiles. It
reminded Smith when they first launched here. The response has been literally
overwhelming. “Overwhelming is a word we haven’t used since our first three
months here in Jamaica. It was an overwhelming response in St. Lucia and St.
Vincent.”
After two years in operation, Digicel has grown from a mere 120 staff to 400. One of their lofty goals at the beginning was to achieve 100,000 subscribers in the first year. “We achieved those 100,000 in 100 days,” recalls Mr. Smith. “Even then, our bankers thought we were too aggressive, but we did 360,000 in the first year. Now we are over 700,000. Most of that staff are between customer service and our technical department.’
This month we continue the One-on-One series with Digicel’s Marketing Director,
Harry Smith, who has provided us with some very revealing answers.
| Q: |
With the aforementioned growth, development and successes,
are you foreseeing any problems, or serious competition in those new markets? |
| |
SMITH: For the first time, we will be up against the American giant AT&T.
So far, we have only to tangle with Cable & Wireless, which is the British
giant. We have run into them both in St. Lucia and St. Vincent and we think
we are going to run into them again in Barbados. The competition is about
the ability of people to think. We are not in anyway being intimidated by
the size of those companies. It is the creative ideas that are going to
win and we are ready to compete head-on with anyone, anywhere, anytime. |
| |
|
| Q: |
Do you think the liberalization of the local telecommunications
sector has significantly improved economic prospects for all sectors of the economy? |
| |
SMITH: Most definitely. We firmly believe that a healthy telecommunications
network is indeed healthy for Jamaica’s competitiveness in the global landscape.
If you take, for instance, visitors coming to the island and being able
to stay in touch with friends, relatives, or even business associates, either
through the Internet or making a simple wireless phone call. Or if it means
the farmer in St. Elizabeth are able to make a call to their distributors
that the crops are ready, then yes, the local telecommunications sector
is significantly improving prospects for all sector of the economy. In my
view, the communications sector is certainly up and running, and certainly,
liberalization is going to provide the access to a number of players, as
prices are going to come down and of course it is going to force innovation.
In a monopoly situation, companies will make decisions that only make financial
sense, and not what necessarily make sense to the consumers. You saw what
has happened to coverage. Coverage was limited to what make sense to the
monopoly at that time, once we came in and began to put coverage in every
nook and cranny where there was no coverage before, things started changing. |
| |
|
| Q: |
Apart from yourself and others who have come into the market,
some folks are saying that there is no real economic benefit from people
having all these cellular phones and making all this talk. Does it really
translate into economic benefits to the individual, company or country?
SMITH: Why don’t you ask the many businesses that have sprung up as a result
of this cellular talk? |
| |
The business model that Digicel has introduced in Jamaica does in fact provide,
in our view, about 1,500 new jobs. When our phones come into Jamaica, they
have to be fulfilled; the SIM Cards have to be put in and packaged for retail.
That provides new job opportunities. Right now, we are working in association
with Facey Telecom (a division of the Facey Commodity Group of Companies)
in the distribution of the millions of phone cards we produce per month,
which in turn produced revenue for distributors, because those cards have
to get to the market. Right now, we have placed in geographic area across
Jamaica some 14 sub-distributors. Those sub-distributors then re-sell those
cards to retailers, which brings incremental revenue to them. What about
those who have gotten contracts to put up our cell sites? What about the
PR and advertising firms that have benefited from the growth in the business?
How about the millions of dollars the media houses made and are still making
from advertising as a result. The evidence is there for everyone to see
that all these cellular phones and cellular talk has brought about a lot
of positives for a lot of people in different sectors of the society. |
| |
|
| Q: |
How much on average do you budget for advertising and marketing? |
| |
SMITH: There is no way we could disclose that number, not when we are in
this competitive market place. Suffice to say, between mobile phones and
the gaming business and the elections last year, a lot of money was spent
on advertising. |
| |
|
| Q: |
Do you see, as one of the most important challenges facing service
providers in this new dispensation, the retaining of customer loyalty? |
| |
SMITH: Retaining customer loyalty is definitely important. We think that
the exchange starts from the moment the customer walks into the store. Through
research, we have found that the exchange the subscriber has with our customer
care people, with our dealers, has tremendous impact on the loyalty that
a subscriber has to the network. The deeper the relationship the subscriber
has with our operators, the more lasting the relationship. They tend to
use only one phone, they tend to make more calls and the land line becomes
a secondary instrument. Therefore, all local and international calls are
made via cellular phones, which has literally becomes another member of
the body. It is not just a jewelry adorning their waist or gadget they keep
in their hands, but it has become a part of their lives by way of improving
their efficiencies. So, we think that customer loyalty is critical. Personally,
because of the passion I have for the brand, if even one customer has a
complaint about any of our products or service, I take it very seriously,
because I realise that our job is to make every subscriber happy with our
service it must improve their life, not make it miserable. |
| |
|
| Q: |
What are some of the other challenges your company faces? |
| |
SMITH: The challenges are ongoing, and that’s part of the fun being in this
business. With over 700,000 subscribers, in two years, the challenge is
to make sure, for example, our network capacity, continues to grow faster
than our subscribers growth. We pride ourselves in providing 99.9 per cent
network availability at all times. For our contract customers, for example,
we make it clear to them that if you drop a call because of problems on
the network, there is compensation for them. That’s part of the differentiation
we want to introduce. So the challenge is to make sure that our subscriber’s
experience is good. The other challenge is with our handsets. Handsets choice
is part of the reason we have done so well. We came to the market with over
12 different types of handsets; previously you had a choice of two or three.
Jamaican consumers doesn’t lag in terms of types of handsets and technology
available anywhere. |
| |
|
| Q: |
Facing increasing competition, telecommunications companies need
to attract new customers and to retain old customers.
How is Digicel measuring up? |
| |
SMITH: The important thing is not for us to constantly recruit new subscribers,
as we feel that the market is going to be saturated in a few months with
serious mobile users. One of the measures that we have implement in this
regard is what we call ARPU (average revenue per user). We count those who
are active subscribers, not those who have ever signed up, and we keep a
check as to how many people have used the service in the last 48 hours.
If there is a hundred million dollars available, what percentage of that
million dollars do we have? That’s the kind of stuff we look at, including
the number of handsets we sold. To get that growth, it isn’t about acquiring
new subscribers, but instead the rolling out of value added services such
as allowing our customers to access news on their handsets to downloading
a variety ring tones and pictures. We even provide collect call service,
where people can now call you from their handsets, locally and internationally,
even if there is no money on your account. We even segment the product offerings
between the mass-based products and the business-based products. The business-based
products deals with, moving data from point to point. The consumer-based
products are those that provide leisure and convenience. That’s where the
next threshold is going to be...who can roll out more value added services
and products that can increase revenue. |
| |
|
| Q: |
Do you think the next generation telecommunications service providers
will be valued on the quality of their customer base and on their ability
to employ information in order to manage their business effectively, grow
their market share and reach out to their communities of interests? |
| |
SMITH: Yes. The first phase of our business was to get up to critical mass,
which means getting as much subscribers on the network, as much as possible.
The next phase is segmenting that customer base, based on various kinds
of measures, which I will not get into because of the competitive nature.
But certainly you are going to identify certain types of homogeneous groups
and target your products and services towards them. The obvious big one
today is prepaid roaming. |
| |
|
| Q: |
As it relates to new service providers entering the market, with
new and improved state of the art networks, what do you think incumbents,
like yourself, will be required to do in handling capabilities, solid legacy
products, and portfolios? |
| |
SMITH: The first task we had was to differentiate ourselves from competition
and to stand for something. Hopefully, we have done a bit of that. Even
in the way we pay our people is not about guaranteed income, it is based
on performance-related pay. What it means is really, what have you done
for me lately. That reward process drives innovation removes the dependency
to become complacent. We will always be innovative and we think we’ll always
be leading the market in terms of introducing new and better products. If
you recall, we were the ones who introduced GSM (global systems and mobile)
phone technology to Jamaica, the world’s most popular mobile communication
system. Over 72 per cent of digital mobiles in the world are on GSM technology.
We notice that the incumbent (C&W) are just joining the party. |
| |
|
| Q: |
Companies like the U.S.-based telecommunications giant, Oracle,
are developing business solutions for telecommunications service providers
that will offer them a comprehensive suite of integrated solutions to address
Customer Relationship Management (CRM) and other e-business challenges in
the emerging market. Where does Digicel falls, as regards to future plans? |
| |
SMITH: Customer Relationship Management is very important to us. We literally
track all aspects of our customers’ behaviors, using technology. We use
it to group the size of our customer service start of times during the day,
to do our outbound campaigns and to up-sell customers. For example, if we
see that you are not on the right package and as a cost saving to you, we’ll
introduce you to new products and services. Right now, we are about to form
a new department that will focus on customer retention. There are opportunities
for us to change the way we do business and our customer care department
has in fact gone through a change in mission as it is more about customer
retention now. In conclusion, Mr. Smith hopes that Digicel will maintain
its competitive advantage as it seek to broadened its scope of products
and services while, widening its sphere of influence throughout the Caribbean. |
|
