Saturday, 14 January 2012

TM undergoes cosmetic and customer-centric changes

Saturday January 14, 2012

STARBIZWEEK held a question and answer session with Telekom Malaysia Bhd group chief executive officer Datuk Seri Zamzamzairani Md Isa recently. Below are excerpts:

Zamzamzairani: All these changes are necessary because we are not just in the wholesale service but also at the retail level.
SBW: Did you expect the monthly run rate of new additions to be 20,000?
Zamzamzairani: It was beyond our expectations. Achieving 220,000 as at the end of last year was fantastic too.
What contributed to the take-up?
The Internet, broadband and the lifestyle change. We also have Hypp.TV, entertainment and voice to offer. It is more of the customer experience. With UniFi, people don't talk about doing speed checks, they just tell their friends about their (surfing) experience and the (fast) speed. So, word of mouth was also a way of getting new subscribers.
What is the customer rating of Unifi?
We use an index, the TRI*M to monitor, measurement and manage customer service levels and expectations. It is internationally recognised. The customer can tell us if they are satisfied or not. In fact, for our headline KPI for 2010, apart from the revenue EBIDTA, we had the customer element as KPI. This year there is a lot of focus on customer experience and we have embarked on the transformation journey and the focus now is on the revamping of our outlets.
Is this just cosmetic or bold change?
Both. Our staff now wear T-shirts instead of jackets, we started with our Kelana Jaya outlet. It is not implemented at all outlets, but the change is taking place. We also have our staff at the shop floor to attend to customers, and we now have payment kiosks at the outlet.
There is an average waiting time so that customers are not kept waiting, and all this is to improve the waiting experience. We also have a rating system at the counters, so that after they have been served they can rate the service of the individual.
We have introduced parking bays for customers at our Kelana Jaya branch so that people need not worry about parking their cars. All this is intended to reduce the waiting period so that more can be attended to.
All these changes are necessary because we are not just in the wholesale service but we also have to compete at the retail level, so customer service will be the differentiating factor since the technology platform for all is about the same. We have recognised that and we are making all the necessary changes. We also use the Kelana Jaya outlet as a model for others to emulate. We bring managers from all over the country to tell them what we need. It (boils) to managing people's expectations.
We are modelling the transformation programme based on the “cool'' concept where customer-centricity, one company mindset, company operational excellence and leadership are addressed.
If we do not focus on the first (customer-centricity), the others will not make sense.
How is your Streamyx service fairing?
It still has the strong appeal even though many of the existing subscribers have migrated to UniFi. About 53% of Streamyx users are on 1Mbps. Streamyx has 1.7 million users, and when combined with Unifi's 220,000, we have 1.9 million broadband users.
What is the priority, grow UniFi or Streamyx?
It is about growing broadband. There is an impact of migration especially in UniFi areas but that is alright as we can now offer an enhanced system.
The percentage of subscribers loss?
Quite surprising, the migration is 40% from Streamyx and 60% are new users plus those who had left Streamyx are coming back to UnFi. We cannot consider those who migrate from Streamyx to UniFi as a loss to Streamyx ... it is about rolling out a new service.
Any new player buying wholesale HSBB from you apart from Maxis Bhd, Packet One and Celcom Axiata Bhd?
We welcome anyone ... it is not an issue to us. For us it is about getting returns.
Which is better, wholesale versus retail business?
Where wholesale is concerned, we enter into long-term agreements with those who want to lease our HSBB and we cannot compare that with retail. It is not about which is better or worse, it is about two difference businesses.
What is the differentiator for both?
Retail business and the product itself. Whereas in wholesale we can offer higher speed, its up to them to proceed as they have the flexibility.
Maxis is riding on HSBB to offer about the same services, will it affect your retail business?
Of course, it is competition for the retail side and we have to do it better.
When you are packaging WiFi with UniFi, are you making money on WiFi? We will package it with UniFi but we will also offer prepaid. The good thing about our WiFi is that our backhaul is on fibre and we are able to offer high capacity. But a lot of users get locked out (if there is no strong backhaul) and that puts a strain on cellular networks. We have a strong backhaul.
What is your capex requirements for 2012?
Our yearly capex is normally less than RM3bil and since we have built a sizeable broadband infrastructure and reached up to 1.17 million premises, the cost will taper down and a lot of cost will now go to access to homes.
We have to continue to build but we have to move from a supply driven model to a demand driven one.
We are looking at a RM2.7bil and RM3bil will be the maximum but it should be about RM2.7bil.
What was the capex for 2011?
What we can say is that up to September 2011, it was RM1.4bil, and the full-year capex will be announced during our 4th quarter results.
TM managed to bring down the cost of rolling out HSBB by RM1bil, how difficult was it to do that?
It was really about choice of network architecture and our strict procurement process, besides, we also speed up the installations.
The voice business is on a declining trend, any way of re-igniting the interest?
The decline has slowed down and we are going to re-package our voice business again. Today voice is one element of our fixed line business, the other is data. As at the end of September 2011, our voice business contribution towards revenue was 42%, Internet 22%, data 20%, and Enterprise 16%. A year earlier it was 45%, 19%, 19% and 17% respectively. All the growth is led by Internet and data.
When are you going to implement the cap on usage and force through the fair usage policy?
We have been educating the market, we have not put the cap even though we have the right to do so. We will implement it at some point because 20% of the users are hogging 80% of the capacity.
Are there plans to get back into the cellular business?
We are always looking to enhance our fixed line broadband offering. MNVO is one arrangement that can complete our suite of services. We are open to having arrangements with mobile players to offer services.
How soon will you do that?
Soon, but it has to be market driven commercial arrangements, and one that makes sense. Today we are still pushing UniFi and that will carry on.
What are the challenges for TM going forward?
Increased competition and it is getting harder by the day. We are strong in our wholesale business and weak in retail. Technology-wise, a lot more can be done but it is about timing, investments and returns. And again, there is execution how well we can do it all this will be key for our business.

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