Aamir Ibrahim was the captain of his school cricket team. In an exclusive chit chat, he shared with us his journey from being a cricket enthusiast to a leader at Mobilink.
The Chief Commercial Officer & Deputy CEO of the company excitedly talked about how he wishes to change the culture at Mobilink through digitalization which according to him will strengthen the market position of Mobilink and generate more profits.
Here are some interesting facts that he shared with us;
Where does the market leader stand in the existing 3G regime?
I think Mobilink started on a good journey as you know that 3G licenses were awarded last year, and four of the operators got the license whereas all five are rolling out their respective networks.
Mobilink is at par with the remaining telecommunication companies, but if I talk more critically, I would say we still have the potential to improve.
When I say more, I think we entered the price war too soon rather than improving the grade of our services.
Talking about industry, the transition we had from broadband to mobile broadband was a slightly immature fashion.
Primarily because as an industry we were probably too excited to announce the early number of subscribers rather than creating a stable environment for the customers to benefit from.
When you work in a competitive environment everybody has the same rule which is to add more subscribers and cities and in a similar manner you respond as well. But this all lead to a statistical race which in no way favors anyone.
And how do you plan to alter this strategy at Mobilink?
As soon as the government awarded 3G licenses, Mobilink, like rest of the players, entered into a race that was aimed to capture highest 3G customers in the shortest time.
I disagree with the strategy. I would rather have preferred to give a stable experience to the existing customers.
After coming over here I changed this strategy a little by trying to improve our services in over 300 cities instead of going to thousands of towns. Today we are providing more stable and consistent 3G experience in all the cities where we exist. So I can confidently say that we are going through a strategy of densification and improvement of our services.
In terms of building a real 3G eco-system, all members of the industry lack in one way or the other. We have just built the highway but we still have to provide our customers with what is on the other side.
Not going after customers, doesn’t it pose a threat to the revenues generated?
I think as a market leader we have to show the direction, which is my strategy, but of course I am equally concerned about the revenues and like every other commercial officer or a CEO you have to deliver the performance to the board in terms of daily, weekly and monthly revenues.
Hence, I can’t completely lose sight of it but I have to decide whether we are greedy in the short term or we are greedy in the long term. I believe it’s better to adopt the long term approach.
When you have a fairly satisfied customer base, then you should avail the next opportunity. Provision of uncooked food will do us no good.
I have fixed my business, and I hope that others will follow, but the decision lies in their hands.
Does it indicate that you are not generating the expected amount of revenues from 3G services?
Honestly, no, we are not! And it is due the price war I mentioned earlier. If you look at some of the offers flowing in right now, you will find something like 7GBs in 7 Rupees in 7 days.
1GB around the world can be sold for as much as hundred dollars but in Pakistan, we are selling it for Re. 1 which is highly unacceptable.
The craziness that we have been showing in the market may be liked by some customers, but it is unfair. The rate at which we are providing unit GB is less than our cost.
Here is the thing, 4 companies bid for licenses, paying over $ 1 billion collectively and then further invested 500 – 600 million dollars in rolling out infrastructure.
We provided 3G services for our 18 million customers in Pakistan at significantly low prices, government generated money from the licensing and unfortunately us, the providers of the service, did not benefit.
If you look at the top-line of the industry the increase has only been 1% for us from last year. Now find me one investor in the world who will accept a response like that. After spending this much you get nothing at the top-line which is a fairly damaging score card from a financial investment standpoint.
Do you think Pakistan was not ready for 4G yet and what a subscriber should buy at the moment, a 3G connection or 4G?
Today 4G has only 2 hundred thousand customers whereas 3G has 18 million subscribers. We know that 4G is a very good technology from speed’s point of view but the 4G handsets are expensive at the moment.
The cheapest 4G handset is cost around Rs. 13,000. How many customers in Pakistan are willing and able to pay Rs. 13000 or beyond? A 3G handset comes for Rs. 4,000 only. The price difference between 4,000 and 13,000 is one of the major reasons why 4G is not that popular.
I think prices will drop and penetration rise although it was 2 years ahead of time but sooner or later it is likely to happen.
If you have a stable 3G, you should be fine. 4G is obviously faster, but it greatly depends on your requirement. If you are a regular YouTube user, so a stable 3G connection will fulfill your requirement but in case you have to download a movie in 10 minutes then it’s a different story.
For daily use, a 2 Mbps 3G connection will be more than enough.
The government wants to sell the leftover spectrum, what is your take on it?
If you look at the existing numbers you can ask the operators if they are happy with it or not. For a new investment, best metric would be to know if existing operators are satisfied.
If, for example, an operator spent 300 million or so for a 4G license and after one and a half year manage to get 200k customers, will they be satisfied? I am sure we can make a sensible judgment by analysing their statistics and decide whether to enter the arena or not.
I personally think the current score card for 4G is very weak from an investor’s point of view.
What are the biggest external and internal challenges your company faces?
When you are at the top there is always a threat to be attacked from outside. There are always numerous people to take a shot at you so maintaining our leadership position is a challenge for us.
It’s not a secret that the difference between us and the second best in the industry has decreased significantly over the years which is understandable. We are trying to increase that gap again but as a leader you are likely to be attacked.
Internally, you become less agile. And more process oriented. When one earns success, it is likely for them to become complacent and lose the hunger to strive for more. People following you on the charts are less likely to lose theirs.
How to create the excitement and get these kids and middle senior management out of bed is the task now.
It’s been 4 months since I am back and my observations are mostly revolve around the cultural elements. I think our ability to execute things should be faster.
We need to regenerate the spirit. Our ownership as employers needs to change and I think our working culture should allow for some risk taking and induction of fresh ideas.
No matter how good you are as an employee, after some time you need a new challenge and I think the level of cross fertilization of talent has gone slow at Mobilink.
People were doing the same job for a number of years and to create a healthy environment, the workers need to be provided opportunities to carry out a different task after some time. This helps in the destruction of monotony and helps them to learn a new skill.
I think the rate at which factors are changing externally is faster than how things are changing inside. If that remains the case then you lose. Looking at Mobilink in its entirety, our biggest challenge may be internal and not the external.
Since Mobilink is unable to cross the target of 40 million, where are the new numbers and revenue streams coming from?
Pakistan still has a huge potential especially in terms of number of subscribers in the multi SIM environment. We have approximately 120 million unique subscribers and you can see there is an organic opportunity.
When we look at revenue streams, we have 3 major areas. We have talked about digital data, although the trend hasn’t been very healthy but I think in the long run everyone is going to be a 3G user. We just have to create the appropriate local content which will excite customers to spend money.
Secondly, Mobile Financial Service is another growth area. Pakistan is a hugely under-banked environment as about 12% have access to some kind of financial institution.
These financial services coupled with data, aid the building of a digital economy where the actual growth lies.
I also think that there is an opportunity in B2B area. Traditionally, we have only thought about selling SIMs to businesses but other than this, businesses need IT support.
They need to have plan storage, data centres and Mobilink being the biggest technology driven entity is ideally placed to exploit that opportunity.
So when i talk about the growth within the company i think of 3 things: Digitalization, MFS and B2B.
What does this digitalization mean to you and when is it likely to take place?
The way technology is moving around the world, these things can happen in a span of 3 to 5 years. Yesterday I read that Uber is coming to Pakistan so people are going to experiment with different business models and Mobilink wants to be there for facilitating them.
Sometimes we overestimate what we can do in one year but sometimes we underestimate what can be done in 5 years. So I am very optimistic that in 5 years a lot of things will change. When we talk about digitalization, it also includes the organization’s internal digitalization.
I, myself, am a digital immigrant. We hire youngsters from different universities so they can reverse mentor people like me. They can tell us what the possibilities are because we maybe senior members of the organization but we do not have the required digital spark. So we have to get the best of knowledge and ideas from youngsters and try to implement them within the organization. It could start from things like paperless environment or getting rid of old fashioned structures.
Another example is how we initially develop a website for PCs and then make it friendly for mobile phones. When all our businesses and daily life work will be carried out through mobile phones in a few years then the process will be other way round.
We need to develop things for mobile phones and you may or may not go over to big screens because for majority of people the internet would be on mobile phones.
With over 20 years of experience, Mobilink is like a dinosaur within the telecommunication world. It is completely successful but with success sometimes you become sluggish and there is a danger that you will fall behind unless you reinvent yourself.
So this time I am back at Mobilink and greatest challenge for me is to transform the company into a digital entity.
How comfortable are you with the existing taxation system?
Nobody is comfortable with taxation in Pakistan especially the telecommunication sector. We end up paying for the lack of progress country has made in collecting taxes from others.
I read that out of 190 million people only 920,000 people filed their tax returns last year. So in a situation like this the reliance on indirect taxes becomes very high.
Telecommunications, as mentioned have 120 million SIMs so it becomes a very effective mechanism for the government to collect taxes. The level of taxation in this country is highest in the world taking one third of our revenue.
Lately, despite all assurances, all provinces have started taxing mobile data which is extremely detrimental to the investment and also to the vision that the government and even provincial governments have towards the progressive digital educated workforce.
It is very counterproductive and it’s a short term approach which may not be beneficial. For data the biggest user base is youth and imposing taxes means taking away their pocket money.
Why has industry failed to convince the government on the taxing issues?
We have been talking to the respective authorities and he response was not positive. We go and meet officials and present our cases but sometimes they take these decisions which in my opinion will only benefit us in short run.
We are still fighting and we haven’t given up. Interestingly, we are arguing with the provincial governments too.
Over the issue of 19.5% tax on mobile internet, we had assurances from CM Punjab on the reversal. This statement came 2 – 3 weeks later when Provincial Finance Minister announced it on the floor of the house while delivering budget speech that tax on internet will be revoked.
But so far, nothing on ground has been witnessed. If you look at it, Punjab consists of 60% of the total cellular consumption and sets agenda for the rest of the provinces.
Once we get tax refunded here, we will go to other provinces for the same cause.
What should be the rational tax regime?
It should never be more than 10%. Withholding Tax (WHT) is the advance tax which people can reclaim at the end of the year but interestingly people who are paying these taxes are below the minimum income group. These people do not really have the ability to get the tax refunded.
If we were in the elite industry, I would have understood but majority of the customer base is formed of people such as watchmen, drivers, maids etc.
They are not supposed to pay taxes but every time they top up Rs. 100 about Rs. 25 or 30 out of them go straight to the government in terms of various taxes.
What market share are you likely to get in the next 5 years?
We have a growth strategy, and it’s mostly around B2B. MFS easypaisa is clearly the winner today by a long margin and in next 3 years, we hope to get parity with easypaisa.
Number of subscribers then becomes less important as a metric. We have around 29% market share for subscribers and we will be growing that considerably over the years to come.
I think every company likes their plan where they project themselves high but we are now back on our winning wings and we have to focus on our revenue side as well as on the digital side.
The gap is of around 2 million subscribers with Telenor. These numbers can go up and down, but the real question would be which brand the customers love the most? Which Internet connection do people want? This is where the battle lines.
Does energy crisis have an impact on telecommunication companies?
Power and energy are the biggest cost for running the network today. We have mainly 3 kinds of costs; first one is electricity, which is very inconsistent with ever increasing rates, provision of backups through deep cycle batteries and once that source is depleted we turn the generators on, which obviously runs on diesel.
So we have 3 layers of expense for running the network along with providing security around the towers. From the technology standpoint, this is one of our biggest expenses.
These sorts of challenges are not present in other countries. We could have avoided these costs and focused on providing better services. We could have rolled out more 3G sites, investing in 4G. Provision of a handset subsidy could have been possible too.
At the end of the day every investor wants a certain return. These unwanted expenses force you to cut down the costs from other sides which could have been invested into technology.
Alternative energy is very costly. It can be done in remote areas but the logistics are not easy, and the payback is not viable. The photovoltaic cells are not strong enough to capture sunlight and generate 16 KV that we need for our towers.
Do you believe that mergers and acquisitions will help the industry?
Pakistan is a fragmented market and there are 5 operators having market share ranging from 10 to 30%. There have been talks about mergers for last 7 years but it hasn’t happened.
Whether there is a consolidation or not one of the operators will either drop out due to financial in-viability or there would be a merger.
In any environment where there are more than 4 operators, it is sensible for some of them to consider possibilities of consolidation and I think sooner or later it will happen, or the weakest one will be forced to exit the market.
Who has been your inspiration in life?
There are lots of people; from my father to mentors at work and people I’ve read about. It may not be one person, but there are qualities of different people which you try to copy. It could be as basic as getting up early in the morning or being disciplined.
How was your early college life?
I studied at Aitchison College. In my early years, I was a good student but later my passion for cricket grew. I played cricket and became the captain of my college cricket team.
As I became a better cricketer, I became poorer student. When I finished Aitchison, I was at the peak of my cricket and at the bottom of my grades.
Of course I had to become more serious about my college and in later years it was a regular college life for me. I went to US to earn my under graduate degree in accounting from GMS Austin but I didn’t really want to be an accountant.
Instead I started focusing on commercial functions and spent majority of my work life in commercial roles like sales to marketing to strategy.
Did you ever think you would come this far?
Without sounding arrogant, I do have what it takes to get far. I had all the ingredients, and it is just the question of applying me, staying the course and remaining committed.
I think the concept of far also changes with time. It’s not just the title, but it’s the sense of achievement and the personal satisfaction that comes along.
You start your career chasing a title and salary because you want to be a head of something but as you start walking through years you realize that what you are chasing is insignificant.
You just want to do something which makes you happy and makes you satisfied so you feel that your life is well spent because you did something that has had a positive impact on the lives of other people. So from that perspective I feel highly satisfied.
I have been very lucky, and I must thank God because there are a lot of other people out there who are smarter, knowledgeable and hardworking and fortunately the fate was on my side.
Did you find hurdles at the start of your career?
In Pakistan there is a typical culture that you must have “Safarish”. When I came back my father had already passed away. I didn’t really have anybody who could open doors for me. I knocked into the door myself.
There was a company called Mobilink at that time which had just started its operations. One day, I walked inside with my CV and I saw somebody making photocopies. I asked who was this guy and they said he was the CFO of the company.
I just walked over to him and introduced myself and gave him my CV. He chatted with me for a while and organized an interview session. I was later offered the job. That guy was Zouhair Khaliq. He became the CEO of Mobilink and is one of the few people who inspired me and became my mentor.
This doesn’t mean I never had to face any challenges. Career is not always a smooth sail. It goes up stays and sometimes comes down as well, but you just have to be patient, consistent and persistent.
When I talk to some of the youngsters, there is a lot of impatience regarding how quickly they want to be at certain destination. It’s not a sprint but a marathon.
Sometimes we are going a little slow, but those are also times of our growth because we get time to think about our performance.
I have had periods of inactivity, but I think they were necessary for development. Not every day is going to be exciting and not every job is going to be exciting, but patience and consistency are not to be left.
Is the environment at Mobilink same since you joined or have any changes occurred?
We are trying to re-establish Mobilink on meritocracy. You don’t have to know somebody to get here. If you are good and have potential, we promise you to provide the perfect environment and in case you lack in something, we are always there to help and provide you a second chance.
However if we are unable to see the excitement to work and contribute, unfortunately we are to part ways.
The culture is more open here. We don’t’ sit in cabins any more. I sit in a hall with other team members. Cubicles, closed spaces, and closed doors are the relics of the older era, and they don’t belong in the digital world.
If you look at any digital company, even the Facebook, I’m sure Mark Zuckerberg’s office won’t be a spacious cubicle. We strive to become more like the Google, Facebook and other such companies that have revolutionized the technological sector.
This is what Mobilink’s ambition is, and I am just doing my job to set it on the right path.
We just need to take the approach and involve various components in this ecosystem. We exist because there are consumers who need a product, and we provide them with it. Various stakeholders need to work together to create this magic.
If everyone becomes selfish and greedy for money, then it is impossible to carry out a smooth run. In Pakistan we need to show maturity and how various stakeholders can sit together and take this industry forward.
The cellular infrastructure is just like road infrastructure which is very essential for Pakistan’s prosperity. Shareholders from outside Pakistan want a return on the investment, and when they get it, they are likely to invest more.
It is high time that our government starts to adopt a long-term approach to the following matters.