Papua New Guinea’s third telecommunications operator, bmobile, has signed a partnership arrangement with the global giant, Vodafone UK. Chief Executive Officer Sundar Ramamurthy tells Business Advantage PNG what the agreement means for the company’s operations in PNG and Solomon Islands.

bmobile’s Sundar Ramamurthy

Since its inception, bmobile has had a chequered history. Nine CEOs, under resourced and with limited capacity, it has hardly dented the Papua New Guinea telecommunications market. Last October, the PNG Government invested US$85 million (K220 million) in the company following the collapse of a deal with the Fiji National Provident Fund to recapitalise the telco.

CEO Sundar Ramamurthy, also appointed last October told Business Advantage PNG he’s spent that time concentrating on ‘getting the basics right’.

‘Vodafone UK is the largest mobile phone provider in the world outside China Mobile and for us it’s an unmitigated success for us to be able to bring them on board. We get full access to all their resources,’ he says.

Strategic partnership

‘They are in 76 markets so the immediate advantage is marketing—knowing what works in other countries, what works in developing countries. Secondly, from a sales perspective, they buy 65 million handsets a month, so we can take advantage of this scale and buying power where it makes sense to.

‘And they are Huawei’s biggest customer and Huawei is our main equipment supplier, so in terms of network quality being measured up against what is the best in the world, those are the things that we need to aspire towards.’

Expanding Vodafone’s presence

‘This strategic partnership with bmobile will enable us to expand our presence in Asia-Pacific and extend the reach of our products and services across the region,’ says Stefano Gastaut, chief Executive of Vodafone Partner Markets, adding that ‘it will also deliver enhanced roaming benefits for both our consumer and multinational corporate customers’.

‘bmobile is now in 200 locations around the country and the plan is to be in another 200 to 300 locations within 24 months.’

The agreement is for a minimum of five years, and firstly involved a rebranding exercise. Bmobile will now be known as ‘bmobile Vodafone’ in both PNG and Solomon Islands.

Expanding network

Since Business Advantage PNG last spoke to Ramamurthy, he and his team have expanded bmobile’s network.

‘We used to have only three 3G sites in Port Moresby. We now have 30. We didn’t have 3G in Lae and Hagen. We now have 3G in Lae and Hagen. We now have 3G in Wewak and we’re now in Alotau.’

bmobile is now in 200 locations around the country and the plan is to be in another 200 to 300 locations within 24 months.

Getting competitive

‘We can’t reverse eight years of malaise in six months. The first 12 months are very much about creating a product that’s competitive. And today we do have it, but not in every place that we exist.’

Vodafone’s Stefano Gastaut

He agrees the plan, which includes building towers in the Highlands as well as coastal areas and where road access is easy, is ambitious.

‘Yes, but it has to be aggressive. The one thing I have learnt is build it fast so then you can start to recover the costs quicker.’

While his focus now is on mobile phone services, Ramamurthy says he’ll be thinking about add-on services later.

‘Adding services on top—whether you want to be an ISP, whether you want to deliver radio services, whether you want to deliver web services, whether you want to deliver TV services—you have to have a fundamental network of sorts and that is our mobile network. That is our core focus and right now that is our only focus.’

Duplication

As the telecommunications landscape in PNG develops, more players enter bringing advanced technologies, the former government adviser is concerned about duplication of services.

‘It makes little sense for us (bmobile) to put in equipment right next to Telikom. We should be sharing facilities. It makes little sense for us to both be building mobile networks. We should be building one network.

‘So we need to move people to more secure forms and more easily accessible forms of being able to purchase airtime.’

‘That’s an area where government has to use its resources wisely. Where you’ve got government radio stations and TV stations and they have no reach they should be able to use co-location facilities.

‘Whether it’s Indonesia, India or the Philippines, the government dictates whether or not there are three towers in the same village.

‘It costs as much to relocate a tower as it does to build one. So we’ve got to solve this problem quickly.’

Buying airtime

Buying airtime is another ‘basic’ issue facing bmobile customers.

‘In PNG, our primary aim is to move towards electronic vending. At the moment, we’re selling physical cards and that’s like moving cash. It’s a complete pain. They can get stolen and frequently do.

‘So we need to move people to more secure forms and more easily accessible forms of being able to purchase airtime.

‘This country about eight million people and if two million have a phone, there’s another two million at least who don’t. So there is certainly a greenfield market out there.’

‘Price is a factor but again pricing is all about whether you do intelligent bundling and it’s about simplicity.

‘I think the mobile phone business is overly complex. People routinely suffer from what we call ‘bill shock’ and we need to have our plan simple. When a customer has an issue, we need to address it with compassion and speed.’

Ramamurthy says Telikom and bmobile need to have a good working relationship as so much of bemobile’s network is reliant on Telikom. As Telikom moves from wholesaler to retailer, bmobile and Telikom need a close relationship.

‘Our boards see eye-to-eye, our management teams meet regularly. So there is certainly a very good working relationship that didn’t use to exist.’

‘This country has about eight million people and if two million have a phone, there’s another two million at least who don’t. So there is certainly a greenfield market out there.’

bmobile in Solomon Islands

Known as: bmobile Solomon Islands

CEO: Niall Downey

Staff: 60

Launch date: August 2010

Coverage: Across all major provinces

Market share: Approximately 35%

2014 Achievements: International roaming (outbound and inbound) and national 3G network