Caspian Energy (CE): Mr. Shearer, Bakcell signed a partnership with Manchester United, one of the world’s biggest football clubs in 2012. What can you tell us about this partnership?

Richard Shearer, Chief Executive Director, Bakcell: Manchester United is an incredibly well-known brand. We are the only partner for Manchester United in the region, and it has provided us a very strong platform to take our brand to the next level and also to get us recognition more widely outside Azerbaijan. The content that Manchester United brings to the partnership and the opportunities for us to leverage its brand amongst our customers and the broader market as a whole is fantastic. We looked at several other clubs and other sports, and the package that Manchester United brought was significantly better than anybody else could deliver. We have had a number of events already and a very big launch event, which brought us a large amount of brand recognition. We are currently leveraging content to our customers and also the broader partnership relationship with our corporate customers and opinion-makers in the country. Football is a global game; it reaches out and touches people at all levels of society. It is a great means for people to talk and interact, and we like people talking and interacting, especially when they do it on our network. It is a sport that touches people at the senior levels as well as the more mainstream levels; it is a very egalitarian sport and a lot of the brand values associate with the sport and specifically Manchester United resonates very well with our own brand values.

CE: What technological innovations Bakcell has made in 2012? 

Richard Shearer: During 2012, we have switched our focus from macro cellular coverage projects into micro coverage projects in order to improve our customer’s experience and provide unparalleled network quality. In other words, Bakcell has installed indoor equipment in several famous hotels and business centers in Baku. We have spent about 70 million AZN for application of technological novelties, installation of new base stations, etc to ensure the best network experience for our customers. 

Installation of the in-building solution at Baku Crystal Hall is one of the largest projects of Bakcell during the year 2012. It was a major stadium project which was delivered in a record time for the Eurovision 2012 event. As a part of the overall solution, Bakcell has designed and implemented a high capacity multi-mode in-building network for the one-of-a-kind venue. Mobile telecommunications infrastructure of “Baku Crystal Hall” was designed by Bakcell and installed by Komtel Company, which had previously implemented similar project at “TT Arena” – one of the Turkey’s largest stadiums. A unique system of American Bravo Tech Inc. Company was used for this project. Ninety stadium antennas especially purchased for this event, provided Bakcell customers with the best and highest quality communication. In recognition of the high profile of the Eurovision and to present the country visitors with the best service customers of the country’s other mobile operators were also able to use this system during Eurovision. 2G and 3G channels installed for use by all three operators provided more than 30 000 subscribers and visitors with a possibility to use communications services. 

We have been awarded two times for the implementation of Baku Crystal Hall project. In the month of June, Bakcell was honored with “GTB Innovation Award 2012” for provision and successful operation of in-building mobile communications system at “Baku Crystal Hall” Palace. The Ministry of Communications and Information Technologies of the Republic of Azerbaijan (MCIT) has also awarded Bakcell with a Honorary Diploma for provision of high quality and reliable mobile communication services during Eurovision 2012 song contest. Bakcell was the only mobile communications operator to receive an award from the MCIT.

CE: How would you evaluate the today’s mobile communications market in Azerbaijan? Which projects are the most demanded on this market?

Richard Shearer: Building of mobile telecommunication and information technologies sector became one of the biggest demands of the Azerbaijani subscribers. Despite a number of problems inherited from the past, such as poor telecommunications infrastructure, a substantial platform for the ongoing development of Azerbaijan’s telecom sector was put in place a decade ago. The external view of our sector in Azerbaijan seems to be very positive. We have gone to the market a couple of times to raise bonds, and they were massively oversubscribed, which is encouraging. All of the major vendors are present here and are aggressively competing for business. In general, it is a buoyant place to be. A lot of money is flowing from the oil sector, which is coming into the non-oil sector and attracts investors. There is a lot of infrastructure to build and we have a lot of spectrum to exploit. 

A very competitive environment has allowed this sector to grow rapidly. Mobile revenues have increased two-fold, and the number of GSM subscribers has also doubled. Now, telecommunications is one of the most rapidly growing sectors in Azerbaijan and it has taken place in the context of a very strong developing economy. The market continues to be buoyant, with new products and services being launched by the two largest operators to stimulate the market. While subscriber penetration is high in Azerbaijan, probably in excess of 100%, the market is continuing to grow. Data is now becoming a significant revenue stream for operators and the number of dongles in the market is growing rapidly. Bakcell has grown its overall market share by some 1.5% since Q1 2012.

CE: Since April 2011 you have been in charge of Bakcell – the first mobile operator and the leading mobile internet provider in Azerbaijan. What has been achieved throughout this period of time?

Richard Shearer: Along with the fact that Bakcell provides its customers with the best services, we are the Number One Mobile Interent provider and intend to continue developing our business aggressively. Moreover, we believe our mobile voice network offers the best customer experience and we intend to use this to increase our share in the traditional mobile voice market and continue to focus on customer satisfaction. During the last 2 years Bakcell was the fastest growing mobile operator in the country. According to the results of 2011, the biggest financial growth has been achieved by our company. According to various drive tests, our network is the most powerful among the three network operators providing the best quality signal and highest mobile internet speeds for customers. And these comparisons are not performed just by us – the users and independent organizations have also noted the fact that our network is the best performing. 

CE: What percentage of the country’s territory have you managed to cover with 3G services? 

Richard Shearer:n At BakuTel exhibition held on November 23, 2011, the President of the Republic of Azerbaijan Ilham Aliyev“pushed the button” of Bakcell’s 3G Sür@ service. We wanted to make Bakcell 3G commercial launch a significant and memorable event in the history of the telecommunication market of Azerbaijan. The launch of Sür@ was the main success of Bakcell in 2011. Bakcell has worked hard to ensure its 3G Sür@ service has the best quality connection for its customers providing the best experience. Number of our 3G subscribers is growing very rapidly. Today about 1.7 million Bakcell customers use Sür@ services. We have more than 800 base stations supporting 3Gcovering more than 65 cities of Azerbaijan. 

CE: What is the current status of your 4G plans’ implementation?

Richard Shearer: We have also demonstrated LTE (4G) service in our current network. This shows that Bakcell is ready to launch the service in the country. I would say that application of 4G service depends on availability of relevant frequencies and at present, the frequencies allocated to Bakcell by the MCIT (Regulator) are used by another mobile operator. In order to launch LTE services, we need to wait for another operator to vacate these frequencies. I would also mention that currently, there are very few mobile devices in Azerbaijan that support 4G technology. If the number of such devices increases, Bakcell will launch 4G services commercially and we will bring the speed and service quality of Sur@ to high speed internet services using LTE. And since the majority of devices available on the market and used by subscribers support 3G, we are currently focused on widening the availability and appeal of this service.

CE: The number of your customers grows day by day. The company has introduced additional benefits and unique opportunities of using free unlimited tariff. Another effective novelty was the electronic balance top up and number transfer. What has been achieved in the area of launching the MNP and which innovative methods your company is planning to launch in the future?

Richard Shearer: Bakcell was the first company to start preparation for the introduction of MNP.  In January of this year we implemented the new 10-digit dialing, by applying our 055 prefix before the number for making on-net calls. Our competitors have begun this process very recently. Bakcell’s network is fully ready to implement MNP today. But even though we are ready to start today, this is a service that all operators must launch together, so we are forced to wait for the other operators. 

We have invested significant time and money into the development of our MNP system. Our systems are technically ready and have passed all internal acceptance tests. Bakcell is confident that the launch of MNP will increase competition in the Azerbaijani mobile communications market and we are very committed to its introduction. Other markets’ experience clearly indicates that providing customers with increased options for choice leads to greater competition and customer benefit. Along with this,we see a significant opportunity for Bakcell in the corporate segment and also the national businesses segment. Bakcell’s revenues and profits mostly come from the consumer market and we see opportunities to move into the big international corporates and large national businesses operating in Azerbaijan, which for one reason or another currently have accounts with our competitors. We think the credibility we have built up in the consumer market puts us in a very good position to move into these segments. 

CE: Bakcell has extensive CSR program. On which stage of development are your CSR projects today, and are there any new plans in this regard?

Richard Shearer: Social responsibility is an important element of our brand. We see ourselves as a large national company that has social responsibilities within a country that is evolving. Azerbaijan is still quite a young country and some of the social fabrics need to be enhanced, and we see ourselves being able to assist with that. Our CSR strategy is one of the elements that differentiates our brand and we attach great significance to our CSR projects. Our Bakcell Stars program supports children-in-need, it has been running succesfully for about two years now. Another important direction of our CSR policy is to bring young people closer to the ICT world, to increase their knowledge in the telecommunitaions area and to formulate our position as the country’s“IP address”. Along with the partnership with JAA, we have the “Bakcell Graduate” program and internship projects for young people. 

CE: What should Bakcell customers expect in the near future?

Richard Shearer: We have a great brand, high quality services, very strong network, stable income and now a one-of-a-kind partnership with Manchester United. Our customers can be sure that Bakcell will continue introducing the best services in terms of quality and prices, bring great new innovations to the market and continue to ‘set the pace’ for competition and quality. Of course, we are planning to bring lots of novelties to our customers in the near future…watch this space!