Before taking the helm of Vodafone Hutchinson Australia, as of March 1st, Inaki Berroeta talks about his 3 years as CEO of Vodafone Romania. Berroeta reveals a real boom on the smartphones segment: 80 per cent of the operator’s phones sales, last Christmas, were smartphones.
Vodafone Romania had 8,182,923 customers, at September 30, 2013, which is a growth of 308,703 customers compared to same period last year, according to key performance indicators for the six months as reported by Vodafone Group. Overall, Vodafone had good results, strongly supported by the adoption of RED packages by Romanian mobile users.
Mr. Berroeta, you have been representing Vodafone Group for many years already, with great experience in Spain, Malta… Can you make an analogy between the customer profiles of those countries and the one in Romania?
The markets are very different in many senses. When I arrived in Romania three years ago, I found a telecom market dominated by mobile. It was also an extremely competitive market and it still remains. This is a market where we have the most aggressive pricing in whole Europe. This is also a market where the smartphones introduction was a little bit lower for the capacity that operators had. There were not too many customers using smartphones, because they were not using too much mobile data. Today, the picture is much different: Romanian telecom market has stabilized as a high data voice one. Also, the mobile services tariffs in Romania are the cheapest in the whole EU which is very convenient for the Romanian users. When I start working here, the smartphone sales were around 15-20 per cent. Last Christmas, it was 80 per cent of our sales which is a significant change in customers’ choice. In these three years, Vodafone worked hard to make smartphones more accessible to clients through special offerings and plenty of communication.
Another characteristic of this market is the quality of the network, which is also one of the best in Europe, as we invested a lot to keep it at this high standard. In this respect, Romania is one of the first European countries were we launched 4G services.
In H1 2013 financial year, the company you managed increased the customer base with more than 300.000 users, year on year. Mobile data continued to be the main driver of Vodafone Romania growth. However, the service revenues slightly decreased. What are your estimations for the entire 2013 fiscal year and what are your expectations for this start of the year?
I cannot make any forward looking statement before the figures will be published for the whole financial year, which in our case ends at March 31st. As you mentioned, we have had a good year so far, with customer growth and also significant mobile data increase. The drop of the mobile termination rates was the factor that had a strong impact on our results. Without the MTR cut, we would have increased our revenues, year on year. But beyond the figures, what really matters for us is the customer experience and the priority of making things better for the customer. And in this area, we did a lot of improvements.
From what you said before, it highlights that you put more emphasis on client than on financial results… This explains what you said in a recent interview, that your obsession is for the company to be the best, rather than the first?
Actually, it is the same thing! You need to concentrate a business on what is important. The profit, the financial results are the result of what you do. For Vodafone, it is important to give customers a good value. Doing this right, you will get then good profits and good revenues. Vodafone Romania is a very profitable company and a very healthy business, because we concentrate on the customer. If the customer thinks than you are not relevant, you can concentrate on the profit as much as you want, but who is going to pay for your services? This is not management, this is common sense!
In addition, the number of customers reported in the industry is mostly volatile. There is a huge amount of customers’ numbers reported and they are not real people. I think this market is a little bit obsessed with reporting things that look good. I am obsessed to give the client big value.
How do you see the local market compared to the external one?
Here is a market that combines very affordable prices with performing products. In Romania, mobile phone is a mass market product, a commodity. This is a market where you have choices, with strong competition. There is also a market with significant investments in telecom infrastructure. The only thing that is a little bit to watch out is the uncertainty of some conditions under which we operate on the market. For us, predictability is key.
Will Romania continue to be a point of interest for Vodafone in Europe?
Yes, definitely. We are here to stay. More than this, Vodafone will supplement the investments in Romania for the timeframe 2014 – 2016 with an additional EUR 55 million, which will mainly be used for the development of the 4G network, as well as for the store network refurbishment and the fiber optic backbone dedicated to our enterprise customers. This money was allocated to Vodafone Romania following the sale of Vodafone’s stake in Verizon. We continue to say to authorities that this country needs more investments. Romania is no longer an emerging market, it is a consolidated one. So it’s important to continue to make Romania an attractive place to invest in.
You recently renewed the contract with Petrom…
On the enterprises segment, we are number one in the market, and we have a strong record in working with large companies. In Romania, we have 70 per cent market share in this sector, which includes the largest employers from utilities industry, banks. The contract with Petrom is our number one contract which makes sense considering that Petrom is the number one company in Romania, by revenue. We are a single supplier for Petrom’s business, not only locally.
Do you intent to enter on the TV market?
From my point of view, Vodafone Romania is not interested to launch a satellite television service because the market is saturated. We want to approach another level of quality and we are working on that.