Erik Hallberg is the president of Business area Eurasia of TeliaSonera which operates Ncell in Nepal. Born in 1956, Hallberg joined TeliaSonera in 1999 and has held various positions within Mobility Services and Broadband Services and served as Senior Vice President and Head of Market area Baltic countries for four years. Before being appointed as President of Business area Eurasia in December 2013, Hallberg was President of TeliaSonera International Carrier. Hallberg, who has studied engineering, was recently in Nepal with TeliaSonera President and CEO, Johan Dennelind and other top officials of the company. In an interview with Akhilesh Tripathi of New Business Age, Hallberg talked about TeliaSonera’s investment in Ncell, technology transfer, future plans and other issues: Excerpts:

 

Could you tell us the purpose of your visit?

I am here together with TeliaSonera President and CEO, Johan Dennelind. It is his first visit to Nepal. Since he started at TeliaSonera in September last year, he is visiting all the countries where the company has operations, to get acquainted with the local businesses and cultures and meet employees and government representatives. 

 

I am also new to this region, as I was appointed President of business area Eurasia in December last year. However, this is my second visit to Ncell and Nepal.

 

How different is TeliaSonera’s Nepal experience in comparison with the other Eurasian countries?

Apart from cultural differences and less stable economic and political situation, the Nepali market resembles other Eurasian markets in the sense that it is going through the same development stages, from low mobile penetration to saturation and from voice services to growth in demand for more sophisticated value added services and mobile data.

 

TeliaSonera has extensive experience in establishing and developing successful operations from scratch. We were among the inventors of mobile communication back in the 1950’s, when the first mobile network appeared in Sweden, and we were among the founding partners of the first mobile operators in Eurasian markets in the early 1990’s. We know how to build and operate good networks.

 

Nepal is a mountainous country and most of the population is rural and scattered in the mountains. This is difficult for building networks. But we have this experience from Kazakhstan, where 60 per cent of the land is mountainous and the 17-million population is scattered on the territory the size of all continental Europe. In Tajikistan, 90 per cent of the country’s territory is mountains. Uzbekistan and Georgia are also mountainous countries. And we provide mobile coverage to almost all the people living there.

 

Our network in Nepal already covers 90 per cent of the population. When we came to Nepal by acquiring Mero Mobile in 2008, mobile penetration stood at 20 per cent of the population. Today it’s 70 per cent. Penetration here has been growing slightly faster than in other Eurasian markets. This is because technology and various services have been developing faster in recent years and the demand for high quality mobile services has been good.

 

As in other countries, Nepal too expects technology transfer while accepting foreign investment. How successful do you rate TeliaSonera in meeting this expectation?

We have brought the latest available technologies to Nepal, including 3G, new generation billing system, energy-efficient and solar powered base stations, earthquake-resistant data storage and switching centers which are expected to keep mobile communications up and running during an unwanted event of an earthquake. We are also willing to acquire license and frequencies that would enable us to offer fourth generation services, 4G/LTE, offering features like enhanced speed and availability of data services, internet access, video streaming and many others.

 

A complaint against Ncell is that all top management positions in the company are being held by foreigners. What is your plan to replace them with Nepalis? 

First of all, I’d like to say that out of the 492 employees working at Ncell, only 11 are expats. The executive management team consists of 11 people, 3 of whom are Nepali nationals.

 

We encourage employment of local professionals, and it is also required by law. As soon as we have transferred the knowledge and groomed the right competence, we are happy to hire locals with appropriate competencies to top positions.

 

I’d also like to highlight that TeliaSonera creates opportunities for international employment for all its employees. Currently, a Nepali professional is working in a managerial position in TeliaSonera Eurasia headquarters in Istanbul, Turkey. Another Nepali is on a 3-month experience exchange assignment in the same office.

 

What are the major challenges faced by TeliaSonera in Nepal Market?

Mainly it’s the current political and regulatory uncertainty. We are hopeful of more efficient regulation processes to enable growth of the telecom industry and entrance of new technologies to the market, for the people of Nepal to enjoy.

 

What are your future plans for Nepal market for 2014 and beyond?

We firmly believe in high potential of mobile data in Nepal and Ncell will engage in talks with Nepal Telecommunication Authority (NTA) regarding bandwidth and technology neutrality, which are needed for future successful development of mobile data services enabling individuals to benefit from a wider access to the world. 

 

Technologically neutral licenses allowing operators the most efficient use of the allocated and scarce frequency resources is the best way to boost competition and to deliver advanced services to users in rural areas where digital divide is very obvious today.

 

How stiff do you find the competition in Nepal’s telecom sector and how do you plan to stay ahead in this competition?

Fair and level-play field competition based on the service quality is healthy for any industry, because it benefits the customer. Quality of our networks and products and customer service excellence will remain our long-term competitive advantage. Unfortunately, the lack of stable electricity supply in Nepal challenges our quality and customer experience with us. We hope for a solution to this problem by the government, so that we, together with our competitor, could focus on delivering high quality services to our customers.

 

Government authorities are saying that all telecom operators should be listed in the Nepali stock exchange. When can we expect Ncell to take this step?

We have several of our operations listed in various stock exchanges - the most recent one being Kcell, in Kazakhstan. We are positive on listing and it is our view that listing provides value additions to most of the investors. We are also aware that NTA has published a consultation paper also covering issuance of shares to the public by telecommunication companies. This is something we need to look from the perspective of local market situation and Nepal’s capital market.

 

How much has TeliaSonera invested in Ncell so far?

Over 630 million USD.

 

Why did TeliaSonera sell its stake in Nepal Satellite Telecom? Are there any other acquisition plans?

Over the past year, uncertainty regarding the regulatory and legal environment for consolidation and granting of licenses in Nepal has increased. Therefore pursuing the acquisition of Nepal Satellite was not considered possible for regulatory reasons.

TeliaSonera will concentrate on development of Ncell.

 

What are the innovations in the field of mobile communication services by TeliaSonera and when can we expect to see these innovations in Nepal?

We are currently developing 4G/LTE services which enable super-fast data transfer speeds. For example, 4G enables downloading a movie of several gigabytes in size in mere seconds. For corporate customers, such as TV companies and publishing houses, it enables high quality live video streaming, sending of large-size photographs from a camera by email directly from the spot where an event is taking place, etc.

 

TeliaSonera was the first in the world to launch 4G in the capitals of Sweden and Norway in 2009. Today, we offer 4G services in all Nordic and Baltic countries, as well as in two countries in the Eurasian region – Azerbaijan and Moldova. Our 4G coverage in Estonia, one of the Baltic Sea countries, has been named the best in Europe. The demand for mobile data is growing exponentially. Mobile data is the future of our industry.

 

As part of mobile data services, we also focus on development of Machine-to-Machine (M2M) solutions which enable time and cost saving for the user. Very soon, everything will be connected and “Internet of Things” is becoming a reality as we speak. We are determined to be pioneers in this area. TeliaSonera is already leading several pioneering M2M projects. Among them is our cooperation with Tesla Motors, a US-based producer of electric vehicles, where our innovative solution will enable connected services like remote vehicle diagnostics, internet radio, and web browsing. We are also testing “smart homes” where the home owners will be able to remotely control, for example, the level of heating and cooling in the apartment, lights, security systems and even domestic appliances. 

 

Already existing M2M solutions implemented in many of our markets include mobile car parking, remote management of vehicle fleets, remote control of electricity consumption with the help of SIM-cards installed in electricity meters in houses.

 

Being part of TeliaSonera, Ncell will be able to benefit from TeliaSonera’s know-how and experience in these innovations and deploy them in Nepal when the time comes. 

 

We intend to start small M2M pilots in Ncell, as we definitely see opportunities for M2M in Nepal in the future. As for 4G, as I said earlier, Ncell will engage in talks with NTA regarding frequencies and technologically neutral licenses allowing operators the most efficient use of the frequency resources.