Aamir Ibrahim was the captain of his school cricket team. In an exclusive chit-chat with MORE News, he shared with us his journey from being a cricket enthusiast to a leader at Mobilink.
The Chief Commercial Officer & Deputy CEO of the telecom company excitedly talked about how he wished to change the culture at Mobilink through digitalization which according to him would strengthen the market position of Mobilink.
Here is the excerpt of what 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 on 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 instead of improving the grade of our services.
Talking about the industry, we transited from broadband to mobile broadband in 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 a common goal, which is to add more subscribers and cities, and in a similar manner, you respond as well which ends up only going after statistics, a race that does not favor anyone.
And how do you plan to alter this strategy at Mobilink?
As soon as the government awarded 3G licenses, Mobilink, like the rest of the players, went after subscribers for grabbing the highest 3G customers in the shortest time.
I disagree with the number strategy. I would have preferred to give a stable experience to the existing customers.
After joining I changed this culture a little by trying to improve our services in over 300 cities, instead of expanding to thousands of towns. Today we are providing a more stable and consistent 3G experience in all the areas 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 the customers, wouldn’t you compromise on revenue?
I think as a market leader we have to show the direction, which is my plan of action, but of course, I am equally concerned about the revenue since a commercial officer is supposed to deliver the performance. Hence, I can’t completely lose sight of it but I have to decide whether our goal is short-term or we are looking at a bigger picture in the long term. I believe, it’s better to go with the latter.
When you have a fairly satisfied customer base, you can explore multiple opportunities.
I have fixed my business, and I hope others will follow, but the decision lies in their hands.
It simply hints that Mobilink is not generating the expected revenue from 3G services, is it?
Honestly, no, we are not! And it is due to the price war I mentioned earlier. If you look at some of the offers on the market right now, you will find something like 7 GBs in 7 Rupees in 7 days. 1GB around the world can be sold for as much as a hundred dollars but in Pakistan, we are selling it for Re. 1 which is highly unacceptable.
The craziness that we have shown in the market may be liked by some customers, but it is unfair at the end of the day.
The rate at which we are selling gigabytes of data is less than its cost.
Just look at the equation; 4 companies bid for licenses, paying over $ 1 billion collectively, and then further invested 500 – 600 million dollars in rolling out the infrastructure, and at the end of the day, they fight over pennies.
We provided 3G services to our 18 million customers in Pakistan at significantly low prices, the government had its share of money from the licensing, and unfortunately, telcos did not get the due financial benefit.
The industry has recorded only 1 percent top-line growth this year. Now the question is, who would want to invest further with this kind of revenue trajectory?
Do you think Pakistan is not ready for 4G yet? And, which technology a consumer should go with, 3G or 4G?
Today, only two hundred thousand customers in Pakistan are using 4G services, whereas, 3G technology is serving around 18 million subscribers. Although 4G is way faster than 3G, its handsets are expensive yet.
The cheapest 4G handset costs around PKR 13,000 whereas, a 3G-enabled phone starts at PKR 3,000. This price difference is one of the reasons for the lower 4G penetration.
It appears, we are two years ahead for 4G in Pakistan but I think prices will drop and penetration will rise eventually.
Right now, if you have a stable 3G, you should be fine. 4G is obviously faster, but it greatly depends on your requirements. If you are a regular YouTube user, a stable 3G connection should be enough 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 of subscribers you can ask the operators if they are happy with it or not. For making new investments, the best metric would be the satisfaction of the operators.
For example, if an operator spent 300 million or so for a 4G license and after one and a half years it managed to get 200K customers, would this equation raise a need for further investment? I am sure we can make a sensible judgment by analyzing statistics and deciding whether to enter the arena or not.
I personally think the current scorecard for 4G is very weak from an investor’s point of view.
What are the biggest external and internal challenges Mobilink faces?
When you are at the top, a number of people are likely to take a shot at you, there is a threat to be attacked all the time. Yes, maintaining our leadership position is a challenge for us.
It’s no more a secret that the difference between us and the second-best in the industry has decreased significantly over the years which is understandable. Although we are trying to increase that gap again, as a leader, we should be to get attacked.
With success, you become less agile Internally and more process-oriented. As time passes, you become complacent and lose the hunger to strive for more.
But, people following you on the charts are less likely to lose theirs.
How to create 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 attention mostly revolves 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 to kill the monotony and make them learn new skills.
The rate at which factors are changing externally is faster than how things are changing inside. Our biggest challenge may be internal and not external.
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 may fall behind unless you reinvent yourself.
So this time I am back at Mobilink and the greatest challenge for me is to transform the company into a digital entity.
Mobilink couldn’t cross 40 million subscribers target, where the growth is going to come from?
Pakistan still has a huge potential especially in terms of the number of subscribers in the multi-SIM environment. We have approximately 120 million unique subscribers and you can see there is an organic opportunity if you consider the total population of the country.
When we look at the revenue streams, we have 3 major areas that are still untapped. Firstly, the 3G is yet to take off and in a few years, we are expecting everyone to be on a 3G network provided there is enough local content to excite the customers.
Secondly, Mobile Financial services is another growth area. Pakistan is a hugely under-banked environment and about 12% of the population has access to some kind of financial institution. The financial services coupled with the data cab aid the building of a digital economy where the actual growth lies.
I also think that there is an opportunity in the B2B area. Traditionally, we have only thought about selling SIMs to businesses but, they need IT solutions in the shape of plan storage, data centers and, Mobilink being the biggest technology-driven entity is ideally placed to exploit that opportunity.
So when I talk about growth I think of 3 areas: Digitalization, MFS, and B2B.
What does digitalization mean to you and when is it likely to impact us?
The way technology is moving around the world, it can happen in a span of 3 to 5 years. Uber is coming to Pakistan so people are going to experiment with different business models and Mobilink wants to be there to facilitate them.
Sometimes we overestimate what we can do in one year but sometimes we underestimate what can be done in 5 years. I am very optimistic that in 5 years a lot of things will change.
When we talk about digitalization, it has to start first from within the organization. Frankly speaking, I am a digital immigrant, therefore, we hire youngsters from different universities so they can reverse mentor people like me.
It is a fact that we [peopl like me] may be the senior members of the organization but we do not have the required digital spark. To fulfill the need, 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 the 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 we know the fact that all our businesses and daily life work are going to be carried out through mobile phones in a few year’s time then why not consider the mobile interface first.
We need to start developing things for mobile phones because in the years to come, for the majority of people, the internet would be all about mobile devices.
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 the country has made in collecting taxes from others.
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 easy mechanism for the government to collect taxes. The level of taxation in this country is the highest in the world, taking away 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 that may not be beneficial. For data the biggest user base is youth and imposing taxes means depriving them of their pocket money.
Why has the industry failed to convince the government on the taxing issues?
We have been talking to the respective authorities and the response was not positive. We go and meet officials and present our cases but sometimes they take such decisions, which in my opinion, will only benefit us in the 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 have had several assurances from as high as CM Punjab but so far, no concrete effort on the ground has been witnessed. If you look at the statistics, Punjab being the largest province with nearly 60% of the total cellular consumption sets the agenda for the rest of the provinces. If Punjab refunds the tax, 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 that people can reclaim at the end of the financial year but interestingly people who are paying these taxes are below the minimum income group and of course, they are not tax return filers. These people do not really have the ability to get the tax refunded.
They are not supposed to pay such taxes on cellular services but every time they top up Rs. 100, about Rs. 25 or 30 are deducted out of them that go straight to the government in the shape 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. Easypaisa is clearly the winner today by a long margin and in the next 3 years, we hope to come on par parity with them.
At such a state, the 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 its plan where it projects itself 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.
With Telenor, the is close and we are only 2 million subscribers ahead. These numbers can go up and down, but the real question would be, which brand do the customers love the most? Which Internet connection do people want? This is where the true battle will be fought.
Does the energy crisis have an impact on telecommunication companies?
Energy is the biggest cost of running the network today. We mainly incur three kinds of expenditure; the first one is electricity which is very inconsistent in terms of 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.
In addition to the power, we have to provide security around the towers 24/7. From the technology standpoint, this is one of our biggest expenses.
These sorts of challenges are not present in other countries. Had we not faced such a burden, we could have focused on providing better services, rolled out more 3G sites, rather invested in 4G technology. Even, a subsidy on handsets could have been a possibility.
At the end of the day, investors want a certain return and such unwanted expenses force them to compromise on other things that are vital for technology expansion.
If you talk about alternative energy, it 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 the 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 the 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 that 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 a 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 career, that is why in later years were all about regular college life for me. I went to the US to earn my undergraduate degree in accounting from GMS Austin though I didn’t really want to be an accountant.
Instead, I started focusing on commercial functions and spent the majority of my work life in commercial roles like sales, marketing, and 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 rightly, 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 ahead 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. You feel that your life is well spent because you did something that has 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 you need pull strings. When I came back after completing my study my father had already passed away. I didn’t really have anybody who could open doors for me. I had to do it 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. Later, I was offered the job. That guy was Zouhair Khaliq. He became the CEO of Mobilink and he 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 a certain destination. It’s not a sprint but a marathon.
Sometimes we are going a little slow, but there are also times of growth. 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 shouldn’t be lost.
Is the environment at Mobilink the 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, unfortunately, we are to part ways.
The culture is more open here. We don’t’ sit in cabins anymore. 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 Facebook, I’m sure Mark Zuckerberg’s office won’t be a spacious cubicle. We strive to become more like 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 what they want. 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.