Exceeding expectations

Exceeding expectations Dominic Smith talks to Duncan Watta, Head of IT at Essar Telecom Kenya Limited, about working with Cerillion and the BSS/OSS challenges of being a new entrant in a low ARPU market.
Duncan Watta, Head of IT, ETKL

Duncan Watta is a Kenyan national, currently resident in Nairobi, Kenya, where he is Head of IT for Essar Telecom Kenya Limited (ETKL). A graduate in Mechanical Engineering, he has 16 years’ experience working with blue chip organizations including Unilever, British American Tobacco (BAT) and Lafarge East Africa (Bamburi Cement) prior to joining Essar. Duncan has gained a broad experience from working in the IT, Telecoms, Construction and FMCG industries, and has worked in Europe, Latin America and more than 20 countries within Africa.

DS: Hi Duncan, and welcome to the Cerillion Blog. Tell me about Essar Telecom Kenya?

DW: Essar Telecom Kenya Limited (ETKL) is a unit of India based Essar Group. We are the 4th GSM operator in Kenya, having launched under the brand “yu” in November 2008. We pride ourselves as offering the most affordable prices in the market and have built the best network using the latest equipment ensuring clarity and reliability.
Our main service offerings are Voice, SMS and Data, with a range of value added services including Mobile Money Transfer (yuCash), Electronic Mobile top-up (Eneza) and Caller Ring Back Tones (Dunda).

DS: And can you tell me about your role as Head of IT? What’s a typical working day for you?

DW: The core role of IT is to enable overall business strategy and one of my prime responsibilities is to ensure that management information is provided to the business in a timely and accurate manner. Flexibility and agility in the marketplace is key to our business, as you never really know what’s going to happen tomorrow. So that means that we have to ensure that we have highly available infrastructure platforms, very flexible customer management platforms and then ultimately have a very versatile business intelligence platform.  

Never before in my career have I seen an industry which is so business intelligence driven, and my job is to ensure that this intelligence is available to our Marketing, Sales, Customer Experience and Finance departments. Of course these teams often have very differing requirements, so one of our current initiatives is to try and improve synergies between these departments and make it more cost effective and efficient to deliver our IT projects. 

Being a 24 hour industry, we are on call daily 24/7 whenever away from office. However, my typical working day begins formally by 7am at the office. The first task is to look at the performance of the last 24 hours and ensure our management reports are prepared and waiting for the rest of the business when they arrive at 8am. This is closely followed by looking at any support issues that may have been raised in the past 24 hrs. The bulk of my day is then taken up working on initiatives with the consumers of IT within our business, and managing our key supplier relationships. As the newest entrant to the market in Kenya, we have focused on rationalising our platforms from day 1 to help us differentiate from our competitors. This means we have relatively few vendors, including Cerillion for our BSS and IBM as our primary hardware platform. I try to leave the office at around 5:30pm, after which I love to do a 10km run, at least 3 days a week. 

DS: How is the competitive landscape in Kenya and what challenges do you currently face?

DW: The market is very robust with 3 other players: Safaricom, who are owned by Vodafone; Airtel, who were until recently Zain; and Orange. Fierce competitive pressures have resulted in price per minute reductions, a scenario very much supported by the regulator. This level of affordability has been very much to the benefit of the consumer and has positively resulted to greater market penetration. Currently, mobile penetration stands at about 60% and corresponding mobile internet penetration at about 40% and growing. Noticeably, revenues have fallen per user. 

Multi-SIM has been a very big characteristic of the market in Kenya, with market statistics showing that approximately 70% of subscribers have multiple SIMs – i.e. SIMs from more than one operator. However, multi-SIM now appears to be on the decline as with such low tariffs on all networks, people are asking themselves why they need several SIMs. 

Safaricom is the market leader and they have done very well on the back of their globally recognised M-Pesa service, which has become a very strong loyalty tool. All operators in Kenya now offer similar mobile money services, however the barrier is the retail network for the mobile money outlets where M-Pesa is already present in 80% of outlets. Some users keep a Safaricom phone number just for using M-Pesa and number portability has been something of a failure, because as much as people wanted to port, they couldn’t do so as they would lose their M-Pesa reach. Due to the limitations of the banking system in Kenya, the economy has become dependent to a large extent on mobile money services. 

There’s been a big growth in smartphone use over the last 1-2 years, especially with the availability of cheap phones from the Far East. However, whilst some of these are genuine, as many as 50% of the handsets may be fake. The regulator has taken notice of this and recently introduced a new policy saying that all handsets must be registered by the end of the year or be blocked. If this is fully enforced, we may well see a large reduction in the number of active users / handsets across all networks. 

DS: How does all this translate into your BSS / OSS strategy? What current initiatives or projects are you undertaking within ETKL?

DW: The drop in average revenue per user (ARPU) has not made it easier for CIOs who operate in a technology vendor market where costs are typically rising. IT is seen as a cost centre and spend is closely scrutinised, so there has to be very good business cases for new CAPEX to aid our BSS/OSS strategy. 

In ETKL we have to innovate to optimise our operational costs as well as enhance our front office user experience, which has a direct benefit for the customer experience. A key requirement to support this is the need for light touch interfaces to be deployed in remote market outlets and for self-care. This is a key challenge for the business especially where internet connectivity is not very good. So we have set out on a programme to create and connect regional customer centres to establish ourselves across the wider country. 
Speed of rollout of our back office solutions is also critical. As such, we are focused on building our in-house skills to increase our flexibility and maximise return on our product investments. 

DS: ETKL has been working with Cerillion since 2008, how has the relationship developed and what is it like working with Cerillion?

DW: We kicked off with Cerillion from day one, and I must say the experience has been very positive. Cerillion was key to our launch by delivering both our CRM and Interconnect solutions against very tight timescales, and exceeding our expectations. Cerillion’s project management was excellent, and I think because of that, Cerillion was ahead of the rest of our vendors in terms of delivery. 

Another big milestone was in 2009 when we swapped our core network from Ericsson to a ZTE platform. Cerillion definitely understood the potential risks because of their experience with similar implementations, but were able to commit to a very tight project delivery of just 7 weeks. The project team analysed the new network elements and interface requirements, and even challenged the product specifications in some areas. Ahead of schedule, Cerillion had re-integrated with the new network, again exceeding our expectations. 

Cerillion’s account management has been the key to our successful relationship. Cerillion closely understands our business and hence is able to offer very reliable advice as regards our BSS/OSS strategy. Cerillion also closely understands the local mobile market in Kenya for that matter, and this is a critical lesson as a best practice for the vendor / customer relationship. It is vital for the vendor to understand the customer’s market and internal business strategy, and Cerillion does this very well. 

DS: What results have you been able to achieve and how is Cerillion helping you to differentiate from your competitors?

DW: Cerillion has helped us to differentiate through a faster return on investment (ROI) and very low IT OPEX, much lower than globally recognised standards. We are operating our complete BSS/OSS at less than half of the cost of some of our competitors. This just wouldn’t be possible if we were running a big name CRM platform, for example. 

However this is not a compromise on functionality or performance, in fact Cerillion helps us deliver a much better customer experience because the CRM Plus product is specifically designed for telecoms services. We are able to query the system much faster than other platforms, and when we train our CSRs, they very quickly grasp the functionality because of the ease of navigation and usability of the CRM interface. 

We also achieve significant benefits through the ease of use of Cerillion’s interconnect product. WithInterconnect Manager we are able to turnaround very quick billing and settlement times with other operators, leading to much better revenue management for us and very good financial visibility. 

If I compare with other industry vendors, such as SAP and IBM, I think Cerillion’s delivery is excellent. I also think the pricing of Cerillion is very fair, compared with other leading BSS/OSS vendors, and it is clear that Cerillion staff stay for a long time, which means there is something very good in Cerillion. I would have no hesitation buying Cerillion again and would definitely recommend Cerillion to other operators. 

DS: And finally, what do you see as the key challenges and opportunities for ETKL in the next 3-5 years?

DW: The fundamental challenge for ETKL is how to sustain itself in a market predicted to continue experiencing very low ARPU. We must retain close control of our cost base, and I think this is something we are doing very well at the moment. This then presents an opportunity in the marketplace that we can leverage in the future for further investments. We must also sustain our speed of delivery to the marketplace of our solutions. This has been one of the key success stories for the Cerillion product. It’s very easy to integrate and interface with other systems, and helps us launch new offers quickly in the market. 

The big opportunity for us is getting into the data space. The government has launched an Expression of Interest for 4G licences and they are encouraging operators to form consortiums. We are participating in this process and by the start of next year we should know whether we have been successful. In Kenya, 65% of customers are below 30-35yrs old and this means they are much more willing to experiment with content and applications. Official figures indicate there are around 1.2 million Facebook users here in Kenya, but we believe the real figure could be as high as 8 million, the majority of which are using smartphones to access these services. Google is also getting in on the act, having launched YouTube in Kenya at the beginning of October. So the appetite for data services is growing fast, and this presents an enormous opportunity for us in the future. 

DS: Duncan, thank you very much for your time and sharing your experiences with our readers.