Erim Taylanlar was appointed CEO of Ncell in January 2014 and brings with him almost three years long experience of working at TeliaSonera. Before coming to Ncell, Taylanlar served as Vice President for Corporate Communications, TeliaSonera Business Area Eurasia since April 2011. Prior to joining TeliaSonera, he worked at BP Shipping PLC for 15 years, his latest positions being Regional Manager, Turkey-Middle East-Caspian & Director at Anatolia Star Denizcilik. In an interview with Akhilesh Tripathi of NewBiz, Taylanlar shared Ncell’s present situation, future plans and challenges. Excerpts:

 

It’s been about a couple of months since you took charge as Ncell’s CEO. What is the situation of the company?

The situation is satisfactory. We are thankful to our customers who have shown faith and trust in Ncell’s services. Ncell is a great company with competent people working in it. One of our biggest aspects is we are trying to provide social benefit, besides the commercial activities. Corporate social responsibility is a significant part of our business.    

What is the share of Ncell in Nepal’s cell phone service subscribers market?

We hold 56 per cent currently. We are the number one in the market and we aspire to remain that way.  

 

Ncell’s customer base has expanded significantly in comparatively less time. What is the secret behind this huge success?

I would not say that’s a secret. Most important thing is, we understand the need of our customers and provide services accordingly. And more importantly, we are always focused on the quality. Thus, our customers can feel the difference. We always thrive for making it better because we know that we are capable of providing even better service. Our primary objective will always remain to get better in coming days.

 

The company must be making a lot of profit by now. How is the situation?

Of course, a healthy company needs to make profits. But what is important for us is that we invest most of the money we make. From 2008 onwards our investment well exceeds our net profit by more than 50 per cent. Since 2008, we have invested close to USD 650 million in Nepal. In 2014, we are looking to invest over USD 100 million. Yes, we do make profits which all healthy companies need to sustain and pay taxes to the government and provide employment.

 

It is said that Ncell is facing some problems from the government authorities in the repatriation of profits. What is the actual issue?

It’s been nearly a year since we have been trying to repatriate dividends, which is a very common practice in foreign investment. Our priority at present is not to extract dividends; it is to invest and reinvest, but it’s a very natural right of a foreign investor to repatriate dividends. It’s a legal right. We have applied for repatriation of dividends but it seems to have stuck somewhere between Nepal Rastra Bank (NRB) and Nepal Telecommunications Authority (NTA). It is very important for foreign investors to see that systems are working and it doesn’t take a year to repatriate dividend.

 

Talking about the environment for foreign investment, Nepal has been ranked the least competitive in South Asia for foreign investors blaming mainly the lack of transparency in governance. How do you find doing business in a place like this?

It has its challenges. The bureaucracy can definitely be reduced and improved. We are operating in the IT sector where things change overnight. We have to respond to customer needs and requirements very fast. Hence we have very qualified vendors providing services to us. But there is a regulation which limits payments abroad by USD 10,000. That means, for payments above USD 10,000, we need to apply to NTA for permission. This is just an example. We want to grow in rural areas, providing voice and data services to the rural parts of Nepal. For this we have applied to NTA. But we have been waiting for a very long time and still we don’t have the answer. Basically every application is taking months and months. These are some examples to show how the government machinery is working. NTA does not have a permanent chairman since long time. Thus, important and to-be-promptly-made decisions keep lingering. 

 

How is the company’s penetration in the rural areas?

We have above 90% population coverage. We are present in the rural areas but there are many more areas to be covered. However, the difficult geographical terrain and lack of proper road access to many such points, make the expansion a costly and time-consuming proposition. Also the lack of electricity is a hindrance. Thus it is challenging, expensive and technically detailed to establish voice and data services in the rural areas.   

 

There is a widespread complaint that Ncell surcharges its customers. What do you say?

I disagree. Let me give you an example. We have a flat rate on voice which is Rs 1.99 per minute on all networks. On data, we have 0.39 paisa for an MB which is extremely cheaper. The only thing is that we would like the customers to be committed to the data services. If you make one month’s commitment, you pay Rs 699 for limitless Internet. What beats that?

 

Does it mean that Ncell wants to move into providing data services rather than voice services?

Our market is still a very much voice-driven market. But data is the future. We are responding to the data demand. Lately, there has been a significant increase in data demand in Nepal. The demand for data services shows that people want more information; they want to know what is happening in the rest of the world. The demand for data services is increasing along with the growing use of smart phones. We are responding to this demand.

 

The use of over the top (OTT) services like facebook, skype, viber etc is growing rapidly in Nepal too. Does it have any negative impact on the SMS services provided by Ncell?

Nepal is following the global trends in telecommunications. The use of SMS in the world has been decreasing. What is coming in is, as you said, more OTT versions – be it whatsapp, facebook and so on. So, there is a huge demand for the usage of data which we are trying to catch up with. Naturally, SMS will be on the downward trend in Nepal too but we do not have any complaint against it. Nepal is still a voice-driven market; the literacy rate is just about 50 per cent in Nepal.

 

What are the major challenges faced by Ncell?

We talked about some of them earlier. The other bigger challenge is the power shortage, disruption because of breakage of fiber apart from regulatory challenges. We rely significantly on the national electricity supply grids but the existing long load-shedding makes us rely on diesel as back up fuel. We are investing heavily on solar and we continue to invest in solar power.

 

The lack of coordination between government entities concerned has an adverse impact on our services. A glaring example is expansion of roads where we lose a lot of fiber connection. It seriously affects the quality of voice and data services. Ultimately, this makes the customers suffer.

 

Could you please elaborate a bit on the regulatory challenges?

Telecom is fast moving industry .The regulator needs to adjust to the speed of the IT sector. They need to have a global perspective of where and in which direction the mobile services are going. They need to be prepared enough to regulate the market.

 

What are the main opportunities for growth and expansion of telecommunications in Nepal?

Nepal has a young population which represents the future of Nepal which is very vibrant and energetic. So, from the telecommunications point of view, the growth demand is still there. On the other hand, the market has to be regulated properly. We need a level playing field where all mobile operators receive the same treatment from the regulator. There needs to be a fair approach and a level playing field.     

  

Ncell has become the top cell phone service provider in Nepal. But there are rumors that it evades tax. What do you say?

Rumors are just ridiculous rumors. The fact is contrary. Ncell has become the number one tax-payer in Nepal. It has always been among the largest tax payers of the country. We have been contributing significantly to Nepal’s treasury. Ncell’s tax contribution to Nepal is huge. Ncell is part of an international group, the TeliaSonera Group, which has Swedish and Finnish government's investment and is publicly listed at Stockholm and Helsinki. We obey rules and regulations everywhere we are present. 

 

What are your plans for 2014 and beyond in Nepal?

We plan to continue to grow. We look forward to the NTA’s response on our plan of regional expansion. And we look forward to providing new data services. Most importantly, we look forward to keep the vibrant mobile atmosphere alive in Nepal.   

 

You said Ncell is planning to introduce some new data services. Could you elaborate a bit on it?

We always come up with surprises. All I can say now is the data services we will be introducing will be in favour of the customers. We are ready to provide 4G services. We applied for it three years ago and are still waiting for the go-ahead from the regulator. 

 

Earlier, you talked about a level-playing field in the telecommunication sector. Do you think such a field is missing in Nepal?

I don’t want to speculate on what is missing and what is not. But what I am underlining is a level-playing field is a crucial element for all mobile operators, especially the foreign investors.