Celcom trying to create a startup culture to regain its mojo

  • Product, network quality up, speed to market up, dealer confidence recovering
  • Planet Celcom eCommerce drive not successful, assets moved to Axiata Group

Celcom trying to create a startup culture to regain its mojo

 

IN a clear sign of how speed and agility are increasingly seen as important traits that even large companies are trying to embed into their cultures, Celcom Axiata Bhd’s CEO, Michael Kuehner is trying to create a startup culture at his 3,500 strong organization that he hopes will help it regain its mojo as the mobile market leader in Malaysia.

“It is part of the journey we are taking as an organization and the goal is to do things quickly and always with a focus on the customer for how they experience our products and service,” he tells DNA, after announcing Celcom’s results for Q2 2017 for the period ending June 30.

And those results, where Celcom registered a 1.4% growth in service revenue at RM1.495 billion (US$355 million) with total revenue at RM1.621 billion (US$385 million), up 0.7% quarter on quarter tell Kuehner that Celcom is on the right track. “We are the only player in the industry that recorded quarter over quarter service revenue growth,” he highlights.

The speed it is trying to work at has seen it start to introduce new products as quickly as within a two-week period versus the two to three month period that was the norm before.

It has also brought on board a chief digital officer from Vodafone South Africa who has been building Celcom’s internal capacity around user interphase, design and coding. “You need your own firepower for digital execution and the results are already bearing fruit as we now can release updates for our app on a weekly or two weeks basis where before it took us one to two months,” says Kuehner.

This speed also extends to its social media platforms on Twitter, Facebook and Instagram where its social media team take to responding to customer queries within two hours – a huge improvement from the days long period it would take them in the past, Kuehner admits.

The team is also being ramped up and he is trying an experiment here where the team is younger, with no one being the leader but everyone empowered to solve customer issues. “We want to learn from this and see what we can apply to Celcom,” he says indicating his willingness to experiment with new ways of working and engaging with an increasingly digital work force.

While this is going on, there is still lots of room for improvement in Celcom, especially around digitization [of business processes] with Azwan Khan Osman, Deputy CEO, admitting Celcom has not done well here. But, there is progress with one significant step taken last month when it introduced a dealer app for all its distributors.

The previously manual process to register a pre-paid customer now requires the dealer scanning the customer’s ID with the form auto-filled. “It takes 15 seconds now and is a tremendous improvement on dealer efficiency while reducing fraud,” says Azwan.

It should be noted that its competitors, especially Digi and Maxis already have introduced such services to their dealers. And Azwan acknowledges that there is “tremendous room for improvement” for Celcom in terms of dealer experience and it is taking big strides here, having made changes to its dealer heirachy and benefits with its goal to be “the telco that is the easiest and best to deal with,” he says. Kuehner chips in here, “we are not there yet but the potential is there for us.”

Biggest achievements after one year at the helm

While regaining dealer confidence with its impact on sales and distribution is a key priority for Kuehner, who has been at the helm of Celcom for a year now, he feels that he has made the most progress in terms of the competitive products Celcom has rolled out to the market and the transparent nature of those products which then leads to happier customers.

“Besides moving at a quicker speed, we have competitive and transparent products in the market and customers know what they are getting. There are no hidden clauses. We are really focused on this transparency to customers.”

In tandem with the product focus of the past year, has been a focus on the network that delivers those products to customers and whose performance dictates the customer’s experience of the product they have purchased from Celcom. And Kuehner was not happy with the network when he came in, describing it diplomatically as “we were not in a good situation a year back”.

Since then, he has initiated a whole range of activities from investing in capacity, tuning, optimizing and deploying new technology to improve the performance of the network that now covers 77% of the population with data focused 4G coverage. “A big part of having a good network is about disciplined practices, having good people, the right tools and the right mindset and these we have developed now," he says.

In tandem with the stronger network, data usage has shot up as well from 3.5GB per customer a year ago to 6.2GB based on Q2 usage, with Celcom’s CFO, Jennifer Wong, sharing, “we have seen usage shoot up at sites where the network quality has improved”.

With the continued focus on improving the network, with RM1.4 billion allocated for capex in 2017 where 70% has been dedicated to networks, Kuehner sees no slowdown in this strong data usage trend anytime soon.

Especially not with the recent relaunch of their post-paid plans with massive data allocations of up to 80GB per month where the use case is about whether customers need a home connection anymore for their broadband needs and where the data can even be shared with a supplementary line.

The search for new markets or untapped markets has led Kuehner to the foreign worker market, a space that Azwan admits Celcom had never really seriously looked at but is now a lot more serious about, believing this to be a huge untapped opportunity for them. Its current offering here is the Asia Pass that covers nine countries and offers migrant workers various benefits.

One area that Celcom has not benefited from is its initial focus on eCommerce, which was part of its desire to transition to becoming a digital company. It had launched Celcom Planet in May 2015 to explore eCommerce opportunities in Malaysia. Celcom Planet was a joint venture between South Korean SK Planet and Celcom. SK Planet is a subsidiary of South Korean mobile operator SK Telecom and operates eCommerce specialist 11Street.

Despite being in the market for over two years, Kuehner describes the contribution of its non-data digital initiatives to revenue as “very very minor”, and shares that Celcom has transferred ownership of Planet Celcom to its parent company Axiata Group. “Digital is not a local play, it cuts across countries. Under this circumstance, we felt that Axiata, with its regional footprint could extract better value from Planet Celcom.”

Meanwhile Kuehner is looking forward to the next few quarters as he expects to see further improvements in Celcom’s performance from the various action plans he and his management team have put in place and are driving.  

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