No. 4 / 2010
SAS Adriatic Region Newsletter
Banja Luka 9.4.2010.
Four pillars of sustainable growth
In addition to the overall situation in BiH and the continual downward trends in the basic indicators of purchasing power, such as GDP, inflation and unemployment, another challenge m:tel faces is the territorial division of operators for historical reasons. This specificity of the market puts m:tel in the unusual position of being an absolute market leader in Banja Luka and a challenger in Sarajevo and Mostar. It was clear already from the start of the conversation that m:tel’s expectations were a joint market in BiH and that their business plan also envisaged a higher market share in those territories where m:tel is only a challenger.
It is a fact that m:tel is the only operator in BiH which can boast growth in the last year and whose results in terms of increasing market share outside its historically allocated area are the highest. We were interested why m:tel has been more successful than its competitors and why they consider market liberalisation in BiH, such as the “mobile portability” initiative, to be not a threat but an opportunity for further growth. The precision of the answers to our questions reflects the clear vision of the company and the fact that this vision has already been incorporated into their way of doing business.
During the conversation, four major pillars were unveiled, creating the competitive edge of m:tel, contributing to the company’s sustainable growth and also underpinning the optimism for this and the coming year.
Pillar 1: Quality (offered products)
Unlike most other operators, m:tel has followed its goal since the beginning of the crisis, namely to fulfil the users’ expectations in terms of technology and attract new customers with the most comprehensive offer. The company has continued investing in network coverage, fibre-optics, broader ADSL functionalities … in other words; it has ensured that any of its products were at all times competitive on the market at least for their quality.
Pillar 2: Realisation (operational readiness)
The quality of the offered product alone is not enough. The users’ interest and intention had to be translated into action, e.g. offering new services, maintaining the level of satisfaction of users with the existing services … Over the past three years m:tel devoted considerable effort to the centralisation, standardisation and modernisation of the inherited business processes. Every user had to receive the same level of service and an equally fast response to their request. These changes were all but simple considering the geographical dispersion of sales and service points. Moreover, 2,400 employees had to adjust to these changes.
Pillar 3: Comprehensive market communication
The achieved quality of the offer and the readiness to implement this offer had to be communicated to the market. Focused investments in marketing and socially responsible activities were important elements of m:tel’s business plans. Through market communication, m:tel reached beyond the predefined territorial boundaries in BiH and has thus become a modern telecommunication company with a wide range of products and services on offer and with client satisfaction at the forefront of everything.
Pillar 4: Understanding the users (analytical CRM)
The fourth pillar of sustainable growth is connected to the analytical domain enabling the creation of a partnership with the customer through products and services designed to meet the customer’s needs and expectations, with a win-win effect. This pillar finds expression particularly in market situations similar to BiH where there is a broad range of products which are relatively comparable to those in more developed countries, but where the purchasing power is quite a bit lower. The primary role of analytical CRM in m:tel is connected with maintaining the loyalty and satisfaction of customers, which contributes to the stability of revenues from individual users and, consequently, the stability of the average revenue per user (ARPU). In this way the financial growth rate approaches that of the market share.
The effect of negative social trends
The decrease in purchasing power and the feelings accompanying the recession since the end of 2008 have caused particular changes in user behaviour, mainly for social reasons.
At the beginning of the crisis, ARPU declined visibly and then stagnated, whereas the number of users who were not sensitive to the prices of services and for whom the quality of services was the only selection criterion dropped considerably. The average user in BiH now consumes less than in 2008. The lost revenue from individual users was successfully compensated for by revenues from a bigger market share.
Users switching from prepaid services to subscription and the other way around have become common for unpredictable reasons such as loss of job or lower salary. The consequences of this trend are seen in the same number of new and former users of subscriptions. Its partnership attitude and the readiness of m:tel to pay attention to these users are reflected in the fact that nearly all former subscribers continue to be users of m:tel; they have just switched to the prepaid service.
Amended regulations governing the telecommunication sector in BiH
Let us return to the specificity of the telecommunication sector in BiH, where the introduction of mobile portability has brought about a whole new perspective on competitiveness as the choice of operator has become a completely personal choice, no longer subject to group feelings. This change is more important in BiH than in other countries and clears the way for a new market race which m:tel is eager to take part in.
The management style makes all the difference
The results and the continuous growth of m:tel over the past three years, along with the modernisation of the organisation, speak volumes about the company’s high performance. After focusing on m:tel and the telecommunication sector, the conversation carried on with some final questions about the management style applied by the person at the helm of the company.
The first question delved into the most important experiences which Predrag Ćulibrk has acquired since he became General Manager of m:tel. The first had to do with patience and time which is dedicated, whenever possible, to the understanding of problems which are not strategic at first glance. He provided some examples and it was clear how, for instance, a response to a seemingly unimportant user complaint can prevent something similar from occurring with other users and thus contribute to maintaining the satisfaction of a larger number of customers.
The second example of experience was related to management methods and business communication, where a change of opinion, after hearing the arguments, need not be equated with loss of authority. If it is not difficult for a director to confess a mistake, everyone in the company will find it easier to do the same and this will enhance the quality and frankness of communication at work and lead to progress.
The very end of the conversation was related to the expressed feeling of belonging to the company and the loyalty of the employees of m:tel, which was noticed already at the beginning of our co-operation. As for questions about sustainable growth, the answer combined market conditions and business processes.
The market position reflects the freshness of m:tel as a trademark, the reputation of the employer and also the fact that m:tel is the only operator in Banja Luka – thus strongly influencing the decision to switch employers. In terms of process, the emphasis is on communication of the management through an internal newsletter and a corporate portal. This type of communication offers the employees a different view of the operations and also of the people running the organisation. The newsletter is intended for all employees regardless of their location. The feeling of belonging and the family atmosphere are further strengthened during celebrations and sports events where a large number of employees gather in one place and discuss a variety of subjects.
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