Worst is over for Celcom, now all set to regain lost momentum

• Postpaid momentum showing good signs
• Unfazed with aggressive plans initiated by rivals

IT WAS a roller coaster ride for Celcom Axiata Bhd over the past few years. 

The Malaysian mobile operator, which had the most number of customers a few years ago, is currently having the smallest market share in terms of the overall subscriber base. 

At its peak in second quarter 2014, Celcom had over 13.44 million subscribers - comprising 10.52 million prepaid and 2.92 million postpaid customers. Today, it has 10.56 million customers (7.6 million prepaid and 2.96 million postpaid).  

Good news is that the worst appears to be over for Celcom, as strategies are currently being implemented to help it regain the lost momentum. 

In fact, the company is also eyeing to capture leadership position in the postpaid space and initial signs indicate that it is able to do so.

"I can't talk in details about the first quarter 2017 yet, but clearly there are positive signals and signs are continuing," said Celcom chief executive officer Michael Kuehner (pic above) in an interview with Digital News Asia in Kuala Lumpur recently.

For the full year ended December 31, 2016, Celcom has 2.96 million postpaid customers, just 10,000 behind Maxis Bhd's 2.97 million postpaid customers. In terms of postpaid market share, Celcom's 36.8% market share is just 0.2 percentage points behind Maxis.

"The momentum started last quarter of 2016, and there is nothing to make me believe this has stopped. We are still pushing very hard and creatively working on our offerings, and our visibility in the market is increasing," he said.

About two weeks ago, the company launched GBshare -- a function for the postpaid package that allows sharing of data balances with family and friends. 

"This is to further foster the digital lifestyle and make it easy for people to interact and use their data allowance. This is also another sign that we are further improving our product portfolio in that range," he said.

Even if Celcom secure the postpaid subscriber lead, its customers are not spending as much as its rivals. Maxis' postpaid average revenue per user (Arpu) is about RM104 and Digi's postpaid Arpu is about RM81. 

While growing the postpaid customers' Arpu is part of the company's strategy moving forward, Kuehner's main focus isn't so much on growing the Arpu.

"For us, every customer is important and we focus on each and every customer. Our focus is clearly on the customer experience and we want to make it easy, contingent, fast and transparent to our customers. 

"We believe that if we do so, they will respect us more and we will get more customers, and eventually, they will spend more on our services," said Kuehner.

Addressing prepaid slide

Since second quarter 2014, Celcom's prepaid subscriber base has shrunk by more than 27% at 7.6 million. A main reason of the decline is driven by the hiccups it experienced when it went through its IT transformation programme.

During the "bumpy" period, the company's prepaid operations took a hit, whereby customers wanting to sign up to a prepaid plan may need to wait for days before the line can be activated. Prior to the that, customers wanting to sign up the a prepaid package will only need to wait for a few hours for activation.

This situation has resulted in frustration on both customers and dealers -- customers walked away as they do not want to wait for days for their line to be activated, and dealers were unable to generate sales due to unsatisfied customers. 

"We have lost the dealers' confidence," commented Axiata Group Bhd president and chief executive officer Jamaludin Ibrahim during a media briefing in February. 

When asked on how Celcom plans to regain prepaid momentum, Kuehner said that plans are underway to regain dealers' confidence, but reminded that it will take time before the results start kicking in.

"As much as we are on track with the activities, the prepaid business, to a very large extent is driven by the quality of your distribution and ecosystem in the market. 

"It is not only these, but also the visibility in the shops around and what and how present you are, at any point of time. 

This obviously takes a little longer and in the past we have had less trust from dealers through events that happened, starting with problems on the IT side, impact to not being quick enough to drive the dealer experience," said Kuehner.

"It was bureaucratic, took longer, and made dealers also reserved against promoting our products."

Good news is that changes are starting to occur in this space. The company has  revamped its dealer hierarchy -- which Kuehner described was "cluttered and with no visibility" previously. It informed the dealers on their responsibilities and their obligations. It has also structured its dealer programme to make it more attractive. 

"Nevertheless, there's still convincing to be done. We see a good trend on dealer signups on the new concept, and further steps will include improving the dealer experience. We now have the dealer app which gives them a good connection to us and makes it easy for them to sign up," said Kuehner.

It's not about the commission all the time

In this highly competitive mobile business, wouldn't it be easier if Celcom just pay its dealers with more commission in order to regain their affection? 

"Of course, it is good for dealers to have more commission. However, if you ask them what they don't like and how to improve our relationship, it never ever relates up to us needing to pay more commission.

"They also know it is a business. You need to be on par as your competitor in the business but you don't want to overdo it. From the market visits I have made, it clearly showed that the dealers want us to make it easier for them to sign up, less bureaucratic," said Kuehner. 

Besides making it easier for the dealers to sign up prepaid customers, Celcom has also started to increase Xpax (its prepaid brand)'s visibility -- whereby new signboards and banners are provided for the dealers. 

Unfazed with new competition

Recently, U Mobile launched a new postpaid plan that essentially gives customers unlimited voice calls and text messages, along with xx GB of Internet quota -- starting from RM30 a month. It is also the cheapest postpaid plan that offer unlimited calls and text messages. Other mobile operators offer unlimited calls and text messages only for plans that are RM70-80 and above.

In response to the recent U Mobile's aggressive move, Kuehner remained calm and believe that consumers will look at the overall offerings and it has a strong offering in the market.

"I think seeing it from a customer's perspective, which is what we should do, the customer has to decide if the service against the value is worth it or not. It is always the balance of experience I get, the speed , what is the overall coverage and that all together, which makes the customer experience. 

"At the end of the day, it is up the the customer. I am not too worried about the competitor launching anything because I believe we have strong offering in the market," said Kuehner. 

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