Financial Times

We want to be No. 1 in 2007 - Mobitel
By Akhry Ameer
Mobitel (Pvt) Ltd is gearing up to roll out a fully fledged GSM cellular network to be much more competitive in the local market. The operator was also recently bought over by existing shareholder Sri Lanka Telecom (SLT) to become a fully owned subsidiary. The Sunday Times FT spoke to Lalith de Silva, Chief Operating Officer of Mobitel on its immediate plans:

What has Mobitel's performance been after it was fully acquired by SLT?
The performance has been extremely good. While the normal operations have been continuing, we have been focusing on our GSM rollout related activities like awarding contracts to Ericsson, choosing the right systems for IT and also restructuring to meet the new challenges. From the human resources side, we have been increasing staff, changing people and the way of doing business, and getting closer to rural people while maintaining a corporate focus. So now we have introduced communication with customers in all three languages.

Funding has been a major issue and we have been working closely with banks. We have already awarded $70 million worth of contracts and mandated Standard Chartered Bank as the lead financier.

This alone shows the confidence of the banking industry in Mobitel and SLT.
We also feel we have a social obligation and we have been active with the community by organizing blood donations, etc. We were also the first operator to assist flood relief activities; our staff donated one day's salary towards this effort.
We are maintaining profitability by meeting target revenues. After the SLT takeover, customers have become more confident. Customers moving to other networks have decreased.

Mobitel has disclosed plans of launching a GSM network. To what extent will this take place?
Over the next three years the board has approved business plans to invest $140 million and over five years to invest $200 million to launch a GSM network. This will be launched in September 2003. Basically we want to be No. 1 by 2007 with one million subscribers. We don't want to be second to any operator as all our partners are world class.

We will have better coverage than what we have today. This includes both the analogue and digital networks. We will also maintain our existing TDMA network for the next three years, particularly for rural customers who have access problems with other GSM networks. By September 2003 our GSM network will have the same islandwide coverage as our existing network together with some additional cities. We will also have all other value added services such as SMS, MMS, GPRS, content applications, entertainment, games and e-commerce applications. We will also have international roaming.

In phase two and three we will expand coverage in remote cities and along some of the highways and at the same time maintain our values of customer care, clarity and coverage.

Part of the GSM rollout will greatly depend on advertising and promotions considering the spread of mobile operators in this area. How will Mobitel respond?
In fact, there is an ongoing battle. We will be very aggressive in our corporate, product advertising and PR campaigns. We will tie up with leading advertising agencies to cater to different segments and use the best talents available in the advertising industry.

Will there be a change in branding and does the company have any plans of public listing?
There is a possibility of changes in branding. Public listing could take place in the next one to two years. It is being very seriously considered.

Mobitel unlike some other GSM operators will also have a burden of changing its existing customer base to GSM. How will you manage this?
We will be coming out with new migration plans based on different options and loyalty programmes. There would be options; customers who wait will definitely derive value out of it.

A problem GSM operators have been currently facing is issues in bandwidth. How will Mobitel overcome this problem?
In fact, there was an auction. We bid for the best band with the highest bandwidth or capacity. This can translate to a customer as a clear network; and to Mobitel it means that the network can be expanded with minimum interruptions. We are confident of getting the exact slot we bid for as there were only two operators bidding for three available bands.

What are the major changes Mobitel have gone through to embrace the GSM network when it is launched?
To begin with we have obtained membership in the World GSM association, the leading body who set standards for the GSM industry. We have also applied for an external gateway operator (EGO) licence and we will be starting our own gateway in two to three months.

We also support the Sri Lankan government's liberalization policies in telecommunications and ICT and participate in processes that help to formulate policies. We will continue to assist as an operator by implementing in a timely manner CPP (Caller Party Pays), interconnection, rural telephony, etc.

The GSM penetration in the country is low and hence it provides all operators adequate opportunities within the market. All of us should therefore take steps to develop the market jointly by sharing resources such as towers, etc.

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