Kamar Abass is Country Manager, Managed Services of Ericsson Nigeria, since August 2012. Kamar brings to this position more than 20 years of experience in global telecommunications services industry.
In this interview, Kamar tells Bemigho Awala about his organisation’s leadership in the Managed Services business and the uniqueness of his organisation’s contract with MTN.
We understand that you recently signed a managed services contract with MTN. Can you shed some light on this development? What is the essence of this contract and what does it intend to achieve?
The contract that we won with MTN is for full passive and active maintenance of MTN’s cell sites in five of seven MTN regions. This means that we will be responsible for making sure that each and every MTN site is correctly maintained and help MTN improve their quality of service which will be a test of our effectiveness. I look forward to being able to confirm that that has happened in three months’ time.
What are the immediate benefits of the managed services agreement to MTN Nigeria subscribers?
We believe that the key benefits for MTN subscribers will be the impact of improved operability of individual sites. We believe that sites can be kept running for much longer, faulty components can be replaced or repaired much faster; so customers will know that the network is available at all times. Because we will be able to upgrade the network, through being visible at the network more promptly, through regular checks and knowing the capacity at any time; we will be able to help MTN prioritize fixes. We believe we will be able to help improve the capacity of the network too.
Can you talk about the network sharing model adopted in Nigeria? Would you say it is effective?
Well, networks today are shared at the passive level in Nigeria. By this I mean that operators share towers, and power at the towers. They may share transmission but generally speaking it is the towers, physical infrastructure and the power that they share. Maybe there is an opportunity to share transmission and antennas but that is a second order sharing opportunity. The immediate sharing is the towers and that is an essential thing because all operators need towers and it makes absolutely no sense to have towers built literally next door to one another, it will be a blight on the landscape, waste of resources, and frankly it is also bad for the radio performance to have all the towers potentially clashing with each other on sites very near to one another. That sort of sharing is quite entrenched and works well.
Another level of sharing that goes beyond the passive category is active sharing. With active sharing, both the physical and electronic components of the cell sites are shared. So you are sharing the radio and the antenna in this situation and that produces significant benefits because it means that the operating costs at that particular tower are halved, in a situation where two service providers are utilizing the tower. If it’s three, it’s a third each, and really that is absolutely what the doctor recommended for the telecoms industry in Nigeria. Greater cost efficiency is achieved in this manner.
In which other markets does Ericsson have such managed service agreements and how would your experience across the world impact telecom services in Nigeria?
As I said before, we are a world leader in managed services. We provide managed services for Airtel in about 16 countries. We are currently holding discussions with two other operators with regard to providing them with these services. We expect to conclude these discussions in a matter of months.
Another customer that is currently engaging our services in this area is Atlantic Telecom, a member of the Etisalat Group. We provide managed services for the organisation in four African markets.
Our business model is very unique. We have robust local capability at all the cell sites that we manage; this is supported by all cell sites remote capability in one of our global service centers. This means that all of the expertise that has been accumulated from our global work is available to our local team at the end of a communications line, be it telephone or computer. So people can locally tap into a global knowledge base or simply call somebody in a remote location in one of our local service centers and that person will be able to answer any enquiries that they have or specifically deal with the problem that the client is faced with. We are doing a lot of work in the area of reporting, fixing and reviewing faults remotely
We understand that the bid for the managed services contract was very competitive. What would you say are the unique qualities that helped Ericsson win the contract?
We have bided many times for managed services projects. What is of utmost importance to our customers is knowing that they can trust in our ability to deliver the service that they need and that is reflected in the experience, track record and commitment to quality of the service provider. So, this is the first and most important factor.
The second thing is being able to reach a common ground with the client with regard to cost of service. The third factor that worked well for us is that MTN knows that Ericsson is committed to this market and is here for the long-run. Is MTN going to do business with any organization that will probably be here for maybe two years and not much longer? Probably not.
So, I think those are the three big questions they asked themselves: can this company deliver the right quality, sustainably; can we get a price that makes sense to both parties, and thirdly are they committed to a long term partnership both with me and also with the country in which they are operating. I am happy to say that we could pretty much say yes unambiguously on all of these three points. The important thing is that we offered better answers to those questions than the other parties to the bid.
We understand that there are fears, particularly among a handful of core network staff of telcos about managed service contracts, of the potential of job losses and reduction in remuneration as well as perks associated with working directly with the telcos. Is there a justification for these fears?
In relation to this project, there are people being transferred from MTN to Ericsson. They will still be doing the work they did in MTN for Ericsson but still focused on MTN. So, there are no job losses within that transfer. Indeed going forward, our expectations are that MTN’s number of sites will grow. If their number of sites grows, then we will need more people to manage them. If you look at the stats, by 2050 Nigeria could be the second most populous nation in the world. My thinking is that demand for telecom to-telecom services will continue to grow quite appreciably. We can think of a scenario in which employment will grow, but within that it has to be said that particular skills would be in more demand than others – this will necessitate some restructuring. Overall, I can anticipate jobs growing in the telecoms sector.
In a matter of weeks, we will inherit an additional number of staff to our family. This project is very specific; it’s what we call the placement of the managed services project which basically means that work that used to be done by MTN will basically be handled by us. They are transferred on substantive terms and conditions, people are paid the same salary or more, they get the same set of benefits. Generally, they are doing the same job but in the Ericsson way.
Nigeria’s telecom market, although growing at a fast rate, is hobbled by challenges associated with inadequacy of support structures, especially power infrastructure. How challenging do you foresee managed services will be in Nigeria?
I do not necessarily accept that those are challenges. I think I will categorize challenges as unpredictable occurrences, and after 30 to 40 years of power interruption, we cannot refer to power failure in Nigeria as unpredictable. What is unpredictable is continuous power supply – that will be a big surprise and a challenge because what do we do now with our generators and fuel supply?
The key challenge that I see is the ability to maintain a staff strength that is well trained, motivated and properly equipped to do the job. Because the job will be done by people, we need to make sure that these people can access the sites, work safely and effectively; have the tools they need and also have access to the appropriate expertise. That’s the bit that we will pay most attention to. We know about power, we know about fuel and these need to be managed, no one can neglect these issues but they are not unpredictable. We know how much fuel they need, the quantity that needs to be stored, the alternative sources of power and how we need to get all that working properly. I mean it’s not trivial but it’s not unpredictable. I think the human element is what we need to watch out for.
How do you intend to get professionals for this project?
We will bring experienced people from MTN and re-train them in our way of doing business with help from experts from other parts of Africa and the world. Our staff undergo an enormous amount of training, via both traditional and electronic channels towards ensuring that Ericsson’s standards of practice are reflected in every contact with our customers.
Your business model is ordinarily a business-to-business model. With the exposure you are likely to get from running the network on a day-to-day basis, how prepared is Ericsson to deal with challenges that come with being exposed to stakeholders such as communities and others that are not in your traditional B2B purview?
We have an enormous number of partners, who will work with us, and with those partners we have ways of working which are very clear, ranging from definitions of what is required, guideline on how work should be done, to what the results should be. We have our own means of checking and controlling that work is properly done and we pay a reasonable price for the work we need to have done.
There are lots of people in the value chain and we use our various partners to help maintain a peaceful engagement with our customers. We use a lot of people in the local communities to help make sure that we have understanding of the situation locally, that we can respect local customs, we can support communities where possible and generally be seen as a friendly face in those communities and a part of the solution, not a part of the problem. Connectivity in the local villages is something that is valued and there are very small villages that are covered even in the remote communities. Our job is to engage with those communities so that they understand what we are trying to achieve and we can find a way to work with them for the mutual benefit of all parties.
Can you tell us to what extent your service delivery centres have been able to enhance your operations?
The delivery centres are pools of expertise and that expertise is deployed to customer networks and so they will be a part of the solution here for Airtel. What networks have to do is they have to be kept running and that means traffic has to be managed across the network. If there are problems in one location, traffic has to be diverted and those issues are fixed. There are people in our service centres who have deep expertise in how to manage the network, how to operate them effectively and how to get more out of the networks. They are here and we need more of them as they will be transferring knowledge to the people who do the work but are not in our network center.
Each industry has factors or indices that generally influence investment decisions. In the managed services sector, what are the key growth indicators that would likely push you to invest more in the market?
We are here to serve our customers and we will focus on what they need. Ours is to make sure we have answers to their questions. Ericsson invests a significant amount of its turnover, I think it’s somewhere between 15 percent and 20 percent of its turnover in research and development. The investment is in services, solutions, and products that support telecoms operators. We are very keen to make sure we spend a lot of time with our customers for them to understand what the capabilities of our products are and how it can help them enhance their businesses. That investment is ongoing.
In terms of local investment, we have currently 800 people employed at Ericsson in Nigeria. This figure does not include transfers from MTN. These individuals are trained, housed and operate from an office. We are opening up a new office shortly too. These are significant investments. We also invest in making sure that we can support our customers in all sorts of ways. We support our customers in everything ranging from briefings to visits to Sweden to support in discussions with the regulators, all the way through to trying our products and services. All these investments are available because of the commitment of Ericsson to the telecoms industry across 175 different countries, including Nigeria of course.
We have heard terms such as the “connected world”, championed by Ericsson, and several others, all of which generally point to the fact that indeed, broadband is the future. Given the unique challenges with which the industry is saddled in Nigeria, what are the key things we need to do as a country in order to fully optimize benefits derivable from broadband?
My stance is that this is a very exciting business opportunity: broadband. Many people measure it differently, but most measures we have seen are household broadband penetration at very low single digits. The average for Africa is about 4 percent to 5 percent and we are way below that. But more importantly, for our level of GDP if we look at the peers we have in the same GDP decimal, those who have GDP around us in the same decimal as us have 8 percent mobile broadband penetration and we have frankly less than 1 percent. There is a lot to do and part of the slowness has been the lack of any physical Public Switched Telephony Network (PSTN) infrastructure. The government prioritized what we did and one of the priorities was not PSTN in the old days. That was not a priority then and it was not done, so now everything is on mobile and there really is a struggle to build that fixed infrastructure underneath the mobile which is being done but that will be slow.
The other challenge of course is that rural communities as many cities today have broadband over mobile and some have broadband over fibre, certain businesses do too. That will grow and develop especially with things like the infracos which are a regulatory tool to encourage infrastructure to be provided in the local loop. That is a very good and important initiative to help make sure that people are attracted into this market in a business-like fashion. My thinking though is that this will work well but for rural communities I think we need to think of some sort of solution. It may be the approach that was used in Australia which is over mobile, as this is a much more efficient means of reaching small communities that are remote and may be some kind of open access rural network which is shared among multiple players to make it more cost efficient for the lower density of people and potentially lower spending of people in rural communities.
Ericsson has been in Africa for over a hundred years and in Nigeria for over 50 years. What is the secret of your staying power? Many multinationals complain about how difficult it is to do business in this part of the world.
We are here because there is business to be done. This is a telecom business where we frankly do not believe we are anywhere close to saturation. By any measure, we are somewhere between 60 percent and 90 percent of penetration compared to the market and many countries today are at 130 percent of the population penetration so we have still got some considerable way to go. Our business is telecommunication we are a market leader in telecommunications. Forty percent of mobile customers across the world have their traffic passed over an Ericsson network. So we are significant in this space and we intend to become more significant, especially in areas like Nigeria where there is still a strong growth potential.
What we have going for us so far is our very strong commitment to this country in terms of the number of people we have, how we support the people, the regional service centres that we have opened here, the commitment to our customers, demonstration of our products, support to the regulators – These are the things we do to maintain our position of a trusted adviser to operators in the telecoms business.
Multinational firms in the telecom industry appear to be increasingly disposed to hiring Nigerians as Chief Executive Officers as can be seen from the examples of MTN, Airtel and of course, Ericsson. To what would you attribute this rather new disposition by multinational telecom organizations?
I think there are probably a number of things that are happening. First thing being that you now have a group of Nigerians who have got the right experience, spent time working in global companies both in Nigeria and abroad, and have got deep experience, motivated and committed to a career in a corporate organization. The supply of executives who have proven themselves in the corporate global environment and in long term careers in the corporate world is increasing.
Secondly, I think there is a greater understanding now among companies about the need to manage local challenges and relationships with locals. In the old days, it may have been felt that the interest of a global company has to be served by the people from that global company, but it seems now there is a better awareness of the opportunity for a local person to achieve the right sort of relationships that will further the business interest of the company in Nigeria. I think ultimately, narrowing this down to Nigeria that Nigeria is an attractive place to work. It has not always been the case that Nigerians wanted to come back to the country whether or not the global companies were going to put them there. There are many Nigerians who simply do not want to come back here. Now Nigeria is a very attractive place to live and work in. Putting together all of those factors have meant that you could find people who choose where in the world to work or pursue a career and they are choosing to work in Nigeria.