Brekke back in the spotlight

Brekke back in the spotlight

Second-time DTACboss faces challenges

Fifteen years ago, Sigve Brekke entered the Thai business landscape with the goal of building an Asian foothold for Norway's Telenor Group.

Sigve Brekke recently took over as chief executive of Total Access Communication for the second time. He plans to promote DTAC's four-pronged strategy of working with established industry leaders and app specialists in the areas of entertainment, agriculture, health and financial services to provide mobile services under the 'Internet for All' banner.

In time, the former politician and Harvard graduate helped to build Total Access Communication Plc (DTAC) into a credible competitor to long-standing front-runner Advanced Info Service Plc through innovative marketing strategies, internal changes and a resolute focus on efficiency and performance.

Now, six years after leaving DTAC's top management spot to oversee Telenor's Asian operations, Mr Brekke has returned to the chief executive seat following the abrupt departure from the company of Jon Eddy Abdullah.

The challenges today are greater than ever before due to an explosion in the demand for data, he told the Bangkok Post in a recent interview.

"All of the mobile operators including DTAC are struggling. The demand for data has been much faster than anyone expected," Mr Brekke said.

He said Thai mobile consumers used twice as much data per month than in Scandinavia, while Bangkok was the Facebook capital of the world.

"Or take YouTube. In total consumption, Thailand is No.2 in the world after the US," Mr Brekke said.

"Five years ago, people used their phones 10 minutes per day. That same customer today uses their phone 3.1 hours per day. And he not only uses it many more times, but in many more places."

This massive increase in demand has resulted in new pressures on operators, be it in terms of network capacity, customer service or maximising profitability in a digital economy.

"The most difficult challenge is the business model. How do we ensure that we're not just a dumb pipe that provides Facebook for free to the people?" Mr Brekke said.

"What we see as the model moving forward is we have to be much better in customer analytics ... We have to really understand the customers and combine that information together with what we get from content providers in a way to tailor-make solutions."

He said the fact that mobile was the dominant access point for the internet in Thailand would give DTAC an opportunity going forward.

DTAC will use its insights into what products consumers purchase or are interested in to create added value for its content partners, push ads on mobiles or upsell its own tailored services.

"Right now, we're investing in people who use statistics, who are able to take the customer information and make it usable. We're hiring a lot of people that this is the only thing they do," Mr Brekke said.

"So we have something to offer to content providers that they're willing to pay for so that we can avoid just being a 'dumb pipe'. "

Currently 40% of DTAC customers are active internet users, a metric that Mr Brekke hopes to double by 2017.

"How do we engage [non-data mobile users]? For these customers, it's not about YouTube or Facebook," he said.

DTAC's four-pronged strategy is to work with established industry leaders and app specialists in the areas of entertainment, agriculture, health and financial services to provide mobile services under the "Internet for All" banner. A farmer may not be interested in posting Facebook updates but could very well use his phone to access world crop prices, purchase health insurance or check his banking account.

"We want to provide health services to people living in the villages in the same way that people in Bangkok enjoy. So we're working with Bupa Health Insurance and Microensure [a subsidiary of Opportunity International, a microfinance NGO] to provide health and accident insurance and medical services over the mobile," Mr Brekke said. "For banking, 22 million people in Thailand are without a bank relationship. We want to see if we can provide that relationship on the phone."

He waved his smartphone and said: "The idea is to use this platform as a low-cost distribution platform. There is no way you can establish bank branches or hospitals in every village. But you have the mobile phone.

"We have the brand. We have the physical distribution. We have the relationship with customers, we have a billing relationship. None of the other content providers have this."

Mr Brekke leaned back. "The real thing we have is customer insights. That's what I see is the future. If you're only a pipe, you will lose. It's the customer insight capabilities that matter."

DTAC plans to spend 10 billion baht in the next six months to improve its network including expansion of 4G service in the 30 largest cities nationwide.

Mr Brekke hopes the Prayut Chan-o-cha government will move forward with reforms to improve efficiency within the telecommunications sector and create an infrastructure that will enable the economy to enter the digital age fully.

"It doesn't make sense that everyone is building [telecom infrastructure] to every village. But that is what's happening," Mr Brekke said.

Instead, the government should take ownership of creating a national broadband network while leaving connections for the "last mile" and retail operations to the private sector.

"I'd be happy to be a customer [of a government-owned broadband network]. I don't need to own the broadband, I don't need to own the fibre," Mr Brekke said. "Why shouldn't every single village in Thailand have broadband, not just the high-rise buildings in Bangkok?"

DTAC posted a second-quarter net profit of 2.95 billion baht, up by 0.5% year-on-year but down 11% quarter-on-quarter, on revenue of 21.8 billion, down by 11% year-on-year and 2.6% quarter-on-quarter.

Quarterly earnings before interest, tax, depreciation and amortisation were 7.98 billion baht, up by 6.9% year-on-year but down by 3.3% quarter-on-quarter due to lower handset margins and higher expenses.

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