High numbers of university graduates working at Connex, entrepreneurship at company level and the launching of 3G were key points highlighted by Arun Sarin about Connex.
"One of the things that I am particularly proud of at Connex-Vodafone is that we have launched 3G, because 3G is the next generation", said Arun Sarin (photo, left), CEO Vodafone, who added that Vodafone has reached 4.5 million 3G customers around the world.
3G will be the dominant focus of Connex's growth strategy once integrated into Vodafone. Regaining market leadership is also a matter of 3G growth at Connex.
"We clearly want to regain the leadership but we want to regain leadership in a way where we are providing good services and customers are coming to us because we have a better value proposition: we have better services, we have better handsets, we have got exclusive handsets, we've got good distribution, we've got a great brand. That is the basis on which we want to attract our customers," said Arun Sarin.
Ted Lattimore (photo, right), President and COO Connex explained further: "The question of overall market leadership and its relationship to 3G actually exists. We very very deliberatelly moved quickly on 3G. We see that as being a sustainable difference and being first on 3G and getting that around the country is how you will see that we are leading 3 years from now, 5 years from now, 10 years from now".
"The average 3G customer (at Connex) uses 3 to 5 times as much of our services as the average contract customer and the average contract customer uses 3 to 5 times as much as a new prepaid customer, said Ted Lattimore. Who do you want to get first?" added Ted Lattimore.
Transcript of press conference follows:
Arun Sarin, CEO Vodafone:
"I have been following the progress of Romania, our company here, Connex, that we had a 20 percent interest in up until recently, very closely over the years and it is trully one of the exceptional companies that I know. In fact, we had a team breakfast this morning and it was fascinating for me to talk to our senior executives and find out that most of them have come up through the ranks. Somebody joined as a customer service representative and is now leading our customer operations. Somebody starded in a retail store and is now head of sales and marketing for us. These kind of stories are trully fantastic stories. I am very proud of Ted, of you and your team here for having done a magnificent job in the last seven or eight years.
The thing that I am particularly happy about is that we have built out a very good business here, whether it is the customer service that we are providing, whether it's the network we are providing, as you know we have more than 5 million customers here.
I am completely convinced that countries that have good mobile infrastructure have actually improved their chances of economic success. Because mobile telephony is at the center of improving productivity in countries. As you know, we have businesses in thirty plus countries around the world and it's fascinating to me to watch countries that have good mobile infrastructure, productivity improvement in their population and their citizens and prosperity for the country. In my view this is completely an inextricable mix.
One of the things that I am particularly proud of at Connex-Vodafone is that we have launched 3G, because 3G is the next generation. GSM has served us very well over the last many years, but frankly we as an industry are moving on to 3G. And what 3G brings is more voice minutes, more and cheaper, it brings Internet access at high speeds - you don't need an ADSL line, you don't need anything from the landline telephone company, you can go completely wireless - and, finally, it brings entertainment on the go. So if you want to do wireless Internet, you want to do video calling, you wanna do mobile TV, you wanna download a song, you wanna play games as you are running around Bucharest or anywhere in the country you can do that on the Connex-Vodafone network. What I've just described in the last minute is the future of our industry. Of course, where we are coming from is voice and text, which are all very important, but at the end of the day we have to look ahead. And what we are doing is we are investing the money in third generation systems to be hugely successful in the marketplace.
I want to say a word about Vodafone, some of you probably know us quite well already. We are a relatively large company, we have 165 million customers around the world, our market capitalisation is 175 billion dollars, we have 70000 employees around the world and we are a fabric of companies. One of the reasons I am here is because I want to make sure that the 2000 plus employees from Connex-Vodafone are enjoying the Vodafone family, that they feel completely welcome in this larger family here. I am completely conviced that our company here will integrate very nicely, because in many ways the culture, the values are very similar. Our culture and our values are around being customer-centric. We are very interested in making sure that we serve our customers, that we have the right products for them, that we have the right value for them, that we have the right service for them and that each of us work hard every day to make sure that we are doing a good job for our customers because at the end of the day we are in the customer service business.
Equally we are very good employers, we have passion for our employees, we genuinely care about our employees. As you know, Romania is a country of very well qualified people. I was at our call center this morning very impressed to see all the young people serving our customers - most of who, I would say 90 plus percent, are university graduates. That's a fantastic thing. They join us there then they go on to sales positions, they go on to technical positions, they do all the things in the business. I am here because I want to make sure that our company here integrates wonderfully with Vodafone and I am completely convinced that given our values, given who we are as Connex Vodafone that that will happen in a seamless fashion.
Equally we are present in many different parts of the world, there are many great ideas around the world, we want to bring some of those best ideas, new products and services to the Romanian consumers. Equally, there are many things going on here in Romania that are world class, that I know we will benefit from in the Vodafone family. I am particularly impressed by the enterprise enthusiasm, entrepreneurship and I am looking forward to having a very long and productive relationship with my coleagues and hopefully from time to time I'll come visit you again. The mobile industry, as i said, is a fantastic industry and I think we"ll be assuring you products and services that you will say "Whow, this is trully fantastic".
Q&A:
Q: What 3G business model are you going to implement in Romania - branded handsets, data cards, prepaid services also?
Are you going to have a 3G Christmas in Romania too?
How are you going to regain leadership in Romania?
Arun Sarin: 3G is the future in our business. What 3G brings to the customer is bigger bundles of minutes at much more affordable prices. It brings mobile TV to a handset, it brings games, Internet access, it brings all those things as customers begin to use them. As we have launched 3G around the world, we now have 4.5 million customers on 3G. The most popular thing that they use it for is mobile TV and downloading songs and doing some Internet access for things they are interested in - sport scores, business news, whatever interests them.
For the question of how big a 3G Christmas is going to be and how we are going to regain the leadership - which Ted and I have had a brief conversation about - we clearly want to regain the leadership but we want to regain leadership in a way where we are providing good services and customers are coming to us because we have a better value proposition: we have better services, we have better handsets, we have got exclusive handsets, we've got good distribution, we've got a great brand. That is the basis on which we want to attract our customers.
Ted Lattimore: I would like to add a comment, too, because the question of overall market leadership and its relationship to 3G actually exists. We very very deliberatelly moved quickly on 3G. We see that as being a sustainable difference and being first on 3G and getting that around the country is how you will see that we are leding 3 years from now, 5 years from now, 10 years from now, frankly Vodafone is going to be here forever, so all the time. When you do that, you look at the business a little bit differently. You wil never ever here me saying that it is not important to have the most customers. That is very important to us. But we want the right customers too. I know you like numbers. The average 3G customer uses 3 to 5 times as much of our services as the average contract customer and the average contract customer uses 3 to 5 times as much as a new prepaid customer. Who do you want to get first? That is what we are trying to do. As to Arun's part, yes, he is looking to me to boost every part of the business and we are going to do it well.
Q: What are the benefits that Vodafone brings?
Arun Sarin: First of all, if you think about 3G services, as I said, we have 4.5 million 3G customers, we've got data cards that go into laptop computers, we are bringing laptop computers that have 3G embedded in them already, we have deals with large media companies and large music companies so that we can actually bring content to the table.
Let me just put this in perspective, because this is not about what Vodafone necessarily is going to bring here to the company Connex Vodafone. Equally there are many things that Connex Vodafone is going to give to Vodafone. That is the real magic in our company. It is not one way, but it is two way. It goes back and forth.
So clearly, terminals, the kind of terminals we are producing you cannot find them anywhere else, because they are exclusive, designed for Vodafone. If you think about infrastructure, you can buy infrastructure much more inexpensively, whether it is servers, whether it is switching here or whatever it is. These are all examples of what we will bring to the table. But equally, the things that impressed me: the people, their very analytical mindset, their education, their entrepreneurship might be the very things that frankly Vodafone will benefit from when I think about the Connex - Vodafone connection.
Q: What will happen to the Connex brand? How are you going to turn it into Vodafone and when?
Arun Sarin: Clearly there will be a time, hopefully in the foreseable future, when you will see Connex Vodafone as a dual brand and then over a period of time Vodafone will become the main brand. The exact timing of this is of course dependent on the legal process that is going on at this stage. My view is we will go through the legal process, whatever the legal process is and after that we will start planning as to when we introduce the dual brand and as to when we introduce the single brand.
Ted Lattimore: There are some details that you are all aware that there is a litigation going on and has been going on for some time, it has gone through the courts twice, we won both decisions, it is an appeal process. We will go through the due process, we are not going to interfere on that. October 6 is the next stage in court, we fully expect to win that and we will launch the brand when everything is set up.
Q: What made you buy Connex now and not earlier?
Arun Sarin: For every buyer there has to be a seller. This was the earliest time that the buyer and the seller wanted to do this transaction, and hence the timing now as opposed to one or two or three years ago.
Q: How long will the rebranding process take?
Lidia Solomon: It is public, we announced this on June first, when we had the first media brieffing with Paul Donovan, CEO of Other Vodafone Subsidiaries, that the rebranding process will last between 6 and 9 months. We stick on it.
Q: Connex is a brand very close to Romanian people. What will be the most attractive advantages for Romanian customers after joining the two companies?
Arun Sarin: The most attractive thing about doing business with us is going to be our excellent products, our value for money that we are providing to customers, excellent customer service - all the basic things that one associates with Connex today will continue in the future. I understand that Connex is an important brand here, it is a home grown brand. As you know, we have joined together in the last 5 years many-many different brands. In Germany our brand was called D2, in Italy our brand was called Omnitel and I can go on and on in terms of all our brands. And they were all local brands, (all the brands that we now call) Vodafone. The power of Vodafone is simply that you are able to take your Vodafone anywhere in the world and make sure that you get outstanding service. We recently announced a product where you can actually take your price plan that you have here, at your home country, overseas. That gives you peace of mind in terms of what your roaming cost might be. So what we want to do is make sure that our customers can move around Europe or around the world seamlessly. That is the value that we bring. But the core values of great service, great value for money, great products and services, whether it is 3G, whatever it is, will continue.
Q: Are there major differences between 3G customers in Japan and in Europe?
Arun Sarin: Yes. There are important differences, in fact, country by country by country. You don't even have to think about Europe and Japan. The way our Portuguese customers are using 3G is very different from the way our German customers are using 3G, very different from the way our italian customers are using 3G and I am sure that our Romanian customers use 3G very differently. Everybody has a slightly different lifestyle, everybody has a slightly different need and frankly it is marketed and promoted somewhat differently. In Portugal, for example, we took the best rock band and introduced their music exclusively on a 3G handset. You could only buy their song if you had a Vodafone 3G. Of course, as you can imagine, it went completely wild. We had people who were buying 3G buy music from 3G. In Germany it is about mobile TV. They love to watch mobile TV - their soccer teams, their soap operas, whatever your fancy is, that is what people are buying in Germany. What is the challenge here - there is going to be What is it about the Romanian consumer that we can satisfy. And frankly I personally have many ideas. I think we are leading this revolution here in some ways, making sure we are delivering these products early and my view is when they come and you will se them you will be very pleased with them.
Q: What novelties can you announce for the GSM users?
Arun Sarin: Like I said, there are many novelties. It depends on what you like, frankly. If you like music, then you can get music anytime, anywhere - mp3 quality as good as any of the brands that you are familiar with in terms of music.
If you like a laptop, and I am not seeing many of you using laptops here, but if you had a laptop you could have a 3G card embedded in it and you could be sitting here filing your reports straight to your editor. And it could be on the Internet in 30 seconds, on your website.
If you are just a big voice user, you will get a much bigger bundle for far less money. It is more value for money in 3G. So I could go on and on and on. It depends on what it is that you want from the mobility services that we provide you.
Q: When exactly are you going to launch Vodafone live! in Romania and will it be in English or we shall use Play as the the Romanian version of it?
Ted Lattimore: Vodafone live! is one of the services that we talked about as being part of the Vodafone launching the brand in the country. So we did that and Vodafone live! will come too with that. As you already know, Connex Play, the 3G portal we've got now, has all sorts of services - a lot of Romanian services and some international. But live! brings in that whole infotainment category of international content that we don't have access to yet. So it will be part of the whole rebranding process.
Arun Sarin: Soon! Coming to the theater near you.
Q: You probably know there is a third Romanian GSM operator, who recently affirmed his aim to become the leader in the medium term. How do you comment on this?
Arun Sarin: Good luck!
Q: How many 3G customers does Connex have now?
Ted Lattimore: We are not releasing that information yet. But I can tell you we are way beyond our expectations from the service so far. It is a brand new service and we want to get some critical mass before we start throwing statistics at you.
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