Caspian Energy (CE): How would you assess the development of the telecommunication market in Azerbaijan? What role is assigned to Bakcell in the market today?

Richard Shearer, Chief Executive Officer, Bakcell: The market continues developing steadily, as we saw around 8% growth in the overall mobile market in the year 2013, which actually is a very healthy growth rate.  As for Bakcell, we are growing very strongly, and last year grew even faster than the market itself, so we gained revenue share from our competitors, and were very pleased about it in terms of our overall performance in the year 2013. For Bakcell, 2013 was a much better year than 2012. So again, we are satisfied with our performance. Another big thing about 2013 was  a significant growth in mobile Internet usage and mobile Internet penetration.  People are starting to use their smartphones instead of accessing from their laptops and mobile modems. This means that consumers prefer having the internet in the palm of their hand. The cultural shift of using the mobile internet from simply accessing news and information to using it for entertainment is starting to gain momentum here in Azerbaijan. 

CE: How would you assess the activity of the company over the past year announced the Year of ICT in Azerbaijan?

Richard Shearer: first of all it should be noted that we have gained market share from our competitors. Mobile internet gained   popularity significantly and Bakcell’s 3G Sür@ service is among the market leaders. We own over 40% of the 3G market both for mobile modems and handsets here in Azerbaijan. 

CE: Mobile Number Portability (MNP) has been recently launched. To what extent did it affect the activity of the company?

Richard Shearer: We have waited a long time for the number portability to be implemented in the market. Bakcell was the first company to be ready for MNP. However, it took some time for other companies to prepare.  So we have had a lot of customers waiting for this service  to come into the market. Initial observations show that Bakcell is a net winner in port-ins, so more people are porting to our network when compared to the number of those who want to port-out. 

CE: Is there a tendency of growth of the quantity of Bakcell subscribers?

Richard Shearer: I think the number portability will gain momentum throughout the year. The processes are beginning to work more smoothly for moving customers from one network to another. Again, currently we  are the net  winner of the process and we would expect to maintain this position throughout the year. 

CE: Which projects of the company are gaining more popularity today? 

Richard Shearer: I think the most notable project at the moment is  Bakcell branded smartphone, which became incredibly popular in the market. These smartphones are being sold out within days every time they are offered.  In general, smartphones are becoming much more popular with our customers, we obviously have the best available data-network on the market and the consumers want to take advantage of this. For example, there are more iPhones on Bakcell  network than in any other network. Tablets and large-screen smartphones are becoming more and more popular as well. 

CE: Taking these trends into account and possessing information about the devices that your clients use, do you plan to make any changes? 

Richard Shearer: We will continue to evolve the concept of the Bakcell branded smart phone. And what we typically look for is a very good quality product at a very good price. There are  several options that we are reviewing at the moment for the next phase of development of that project. So it is very exciting. 

CE: What other technological innovations does the company plan to apply in 2014? 

Richard Shearer: A big attention will be paid to further rollout of our 3G network at areas outside of Absheron peninsula. We already have the best coverage in regions and will continue focusing on developing our network. We are currently building a 4G network and will consider launching it later this year. However, a short term focus remains on monetizing our 3G assets.  Another important focus area for us is developing our presence on the high-street to upgrade all our outlets. So it is about upgrading the customer experience and making us much easier to deal with and easier to buy from. 

CE: Could you tell us more about 4G plans? 

Richard Shearer: 4G is an obviously high-speed internet technology. It is much more efficient use of spectrum, so as soon as we see the growth for 4G in our network, we will launch the 4G. And of course, as usage of internet moves from simply searching and browsing  towards video and communication, the 4G is a much better technology to satisfy that sort of demand. 

CE: Are there plans to cover the capital with the company’s Wi-Fi network? 

Richard Shearer: We are already providing  WI-FI at such densely populated and visited area as the fountain square, universities, bus stations, tram stations, etc. But to be honest with you, most customers still prefer using 3G rather than WI-FI. 3G network is so good here that you may as well use it rather instead of the Wi-Fi. And to give you a comparison of the quality of local 3G networks: in most countries, the 3G mobile internet throughput is three to four hundred Kbps, while in Azerbaijan, it is around to 1Mbps. So we have a very high quality 3G networks. 

CE: Will you work for improving those figures? 

Richard Shearer: The improvement will the move to LTE 4G.  This  is the next big technological step. 

CE: From the standpoint of your company, where do you see the future of the whole telecom sector? 

Richard Shearer: Certainly, the future is very much linked with the development and usage of mobile internet. However, the voice communication remains a huge part of our business. We clearly see the text messaging (SMS) usage rate decreasing as applications like “WhatsApp” and “Viber” are taking over. Therefore, the voice services and mobile internet will remain the two core pillars of our business. The third element is the brand and our relationship with the customers. 

CE: How good was the improvement of your quality in terms of customer service?

Richard Shearer: Customer service is one of the major aspects of our business. In the previous years we were mainly focusing on  building the network and improving its quality. Now we are focusing more on  the how our customers interact with us as a business, i.e. our customer services. Like all large companies, we track our brand through various research companies and the results show that we are continuing to improve quarter by quarter, and our brand potential index shows that we have the highest BPI in the telecoms sector. And of course approachability, openness and high quality service are the key watchwords for our brand. 

CE: Which social projects is the company currently arranging? 

Richard Shearer: We have two main activity areas for our corporate social responsibility program. One is the development through sports, which is implemented by means of our partnership with Manchester United football club. The other area is educating and making people more familiar and closer to information technologies and telecommunications. We also work with various local NGOs to support children with need for special care. Also, we have recently signed a five-year deal with AFFA, in order to work together for the sake of development of football in Azerbaijan. I hope that in the future, we will see Azerbaijan in the final stage of the World Cup. 

CE: Will there be any action for reducing roaming tariffs?

Richard Shearer: Recently Azerbaijan has signed a memorandum of understanding with Russian Federation on a government level, aimed at implementation of activities related to reduction of roaming tariffs between the two countries, being major partners in various spheres.   And if you look at Europe, the trend in Europe is for roaming charges to disappear altogether. So we hope that eventually this region will follow this tendency. However, this process depends a lot on cooperation between the countries in this region, and a strong regulatory and policy framework applied by the governments. 

CE: Is there anything that you would like add about things that we did not cover?

Richard Shearer: I’d like to recommend everyone to port their numbers to Bakcell and enjoy the full range of our high-quality products and services at extremely attractive prices.