CEO Talk: Mobile operator targets star status in tight market

Photo by: Vinh Dao
Tolga Gedikoglu, CEO of Appifone Co, operator of Star-Cell.

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Written by Hor Hab
Friday, 12 June 2009

Applifone CEO Tolga Gedikoglu talks about how the company plans to carve out market share for its mobile phone brand Star-Cell

What is your background?
I started my career with Turkey's leading mobile operator in 1997, where I worked in sales, marketing, public relations, special projects and international business development. In 2000, [Swedish mobile operator] TeliaSonera and the local shareholder decided to create another company to manage international assets, and that is where my international life started. Since then, I have worked in various start-up operations in countries such as Moldova and Kazakhstan, and in mergers and acquisitions in Tajikistan, Uzbekistan and Cambodia. In 2002 I became the marketing officer at Georgia Geocell and later became the chief marketing officer and the brand and commercial officer in the Ukraine.

What are your initial views on Cambodia's telecom market?
In my view, it's a very interesting market because having a market with this number of people and this level of competition is very rare. Having only 14 million people but nine operators is a big challenge, and an important one for TeliaSonera because we are always in the top three in any market that we operate in, and usually we are number one.

You entered Cambodia by buying local operator Applifone, which owned Star-Cell, Cambodia's fourth-largest mobile operator. What was attractive about the country?
TeliaSonera is Europe's seventh-largest telecom group, and we are constantly and consistently investigating opportunities around the world. When we investigated opportunities in Asia, we found that Nepal and Cambodia especially had room for growth. Then we started to investigate further, as every big holding group must do to understand a new market, and found the penetration rate around 30 percent, which still leaves good room for growth in the future.

We should acknowledge that Cambodia will become a pretty important country in the coming five to 10 years, and in that respect TeliaSonera is always a pioneer in investing in rising-star countries five or 10 years in advance.

Do you see room for growth in such a crowded market?
Although the market is not that big, there is room for growth. The competition, when you look from various angles, is pretty harsh, but if we can achieve scalable growth over the next five years in any operation that we do, then we can certainly become a dominant player in this respect.

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We can compete with eight or nine players ... because we are TeliaSonera.
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Do you have any specific strategy to capture market share?
Sure we have. When we became the majority shareholder, we created and implemented certain strategies. Everyone implements their own strategies after they buy something new so that it will bring them the success they are looking for. I agree that our growth is a little bit slower at the moment, but, as TeliaSonera, we want to create things in the way we choose, and sometimes that takes time.

Actually, we do have big skills in competitive markets, due to our past. So it is not a big deal to have eight or nine operators in the market because if you have a solid and sound strategy to increase your status, then it is not different than competing with four or six operators. By stretching the limits, we can compete with eight or nine players at the same time because we are TeliaSonera and we are skillful and strong in such positions.

Do you think some operators will get out of the market in the future?
I would not call it a "get out". There is always the possibility in any market that consolidation happens. Some companies merge together. In Cambodia, I don't see any reason why this will not also happen.

How does Star-Cell differentiate its service offerings?
We are currently providing more priority to network improvement, and I can probably say that our network infrastructure has increased drastically in terms of capacity and coverage area if we compare to when [we bought] Star-Cell. Of course, we are constantly improving because we are constantly investing to have a more effective reach in the market. All the actions, campaigns and promotions we are having at this moment, we have one aim only, and that is to make Cambodia talk only with Star-Cell.

What is Star-Cell's coverage area?
Right now, we are covering 11 provinces, and this number is constantly increasing, more or less every day. Our technical team, they are constantly in the field installing antennas.

Cambodia does not have a telecom law; will this affect the nature of competition?
First of all, I believe there is a law in Cambodia. Of course, the law or regulation is not the same in all markets, maybe, and there is always room for improvement based on the characteristics of that market and the characteristics of the competition. In that respect, I believe that the Cambodian government is taking necessary steps to create a fairer competitive atmosphere. We see that the Ministry of Posts and Telecommunications gets certain feedback from each player, and therefore we can see the good will of the ministry to solve ongoing issues as well as create a certain logical understanding and competitive environment.

Star-Cell has had interconnection problems. Does this still happen?
Such kinds of interconnection-related issues can happen from time to time to anybody. The important thing in this respect is when the problem happens, do we correct it in a timely manner? My answer to that would be, ‘So far, yes', and the problem that Star-Cell mainly has is similar to that of others parties, not only from our internal system. But every time we have a problem, it is being solved in a timely manner, which is very valuable and important for us. I should say that in the world right now, I don't believe that any country does not have any single problem with interconnection; it happens. The ministry has been acting as a mediator in the way that it should be, and we and our competitors are also working for the best interests of our subscribers.

Will the financial crisis affect Star-Cell's expansion plans?
The effect of the financial crisis is unavoidable. We aquired the majority stake of this operator in September 2008 when the financial crisis was barely started, but we kept believing in the country and investing more in Cambodia. From one angle, of course, it affects our situation, but being a big, sound company with a solid financial background and having the forward planning skills needed to prevent any crisis at the time it starts, we are in a winning position rather than a losing one.

Many people carry more than one mobile phone. Is that an issue?
In price-sensitive markets like Cambodia, this is a very common practice. In the prepaid market, people always look for the best value for money option, and therefore they follow promotions, campaigns, technology trends and so on. Just keep in mind that we have nine players in the market, and I am not surprised about people having six or seven different SIM cards in their pocket. What matters is how you treat them. Customer centricity is the most important issue here. I think Star-Cell is going to be very successful and a new rising star in Cambodia. This is what I believe.