Ineke Botter

With the mass migration of almost one million 03 mobile numbers to the 71 prefix set for the night of September 17, Ineke Botter, Managing Director and CEO of Alfa, would have every right in the world to be a bit nervous. After all, the switchover involves several private and governmental entities, not to mention the Lebanese public itself who is not necessarily given to listening to patient lessons on the need to reformat the country’s collective digital phonebook. The thing is that Botter is not particularly nervous – at least not outwardly. In fact, while the four week lead up to the switchover will undoubtedly involve her in a blizzard of PR and outreach efforts, she’s as focused as ever on the big picture: Revamping the mobile network, offering expanded services and, hopefully, expanding the customer base so overall rates might eventually come down.

Executive: Lebanon is set to see the mobile code 03 change to 71 in mid September. What is Alfa doing to inform a potentially confused public about the switch?

Ineke Botter: We are doing a lot now. We started with a kick off interview on LBC…. and the Ministry of Telecommunications (MoT) will organize a press conference shortly. We are talking to each and every paper and magazine, and we will have a billboard campaign with Alfa, MTC, Ogero and MoT along highways – around 1,500 in all. We will also have a number of inserts in magazines etc. When the mobile code 03 is transferred to 71 on the night of September 17 and into September 18, if you make a call nationally to 03 then you have to change to 71. If it is an international incoming call however, then it will be forwarded automatically to 71 forever – although the caller will get a message to dial 71 next time. So we are doing a lot of “pretty” work and a lot of work after the 18th of September. The reason why we are doing all this is it has already incurred a lot of work for ourselves for over a year now – lately we have a project team of about twenty people and endless suppliers involved all making sure that this is a seamless enterprise at least from a technical point of view. So one month before, we want to make sure that people understand how [the changeover] will function so we don’t get any overload in customer care with questions that are basically crystal clear if we explain them over time. The other aspect here is that we are trying to make people aware that they really need to do something. This means that [customers] have to change in their mobiles the codes from 03 to 71. Once it is done it will not happen again, so it’s a one-off. The final issue I want to mention is that people will most probably have to print new business cards and stationary, so the public cost is so big that we found it necessary to inform people well beforehand.

Executive: Is there a number now for how much the switchover may cost consumers?

IB: There is no estimation of the cost… Although there is international benchmarking, it is very dependent on the local situation because, for example, printing costs are a lot lower here than in Europe… definitely though [the cost to consumers] will be in the millions.

Executive: Is one month of publicity really enough time? Why didn’t alfa start earlier?

IB: Well the MoT is the owner. Of course, the mobile operators are the first ones involved in this project. We are very willing to do whatever is necessary to inform the public, but you have to recognize that in May, for example, there were other items on the agenda, the elections. So the changeover was not the top priority, and I think people have to understand. It is quieter now though so I think people will understand.

Executive: Why was this step necessary in the first place?

IB: The fixed line network uses 01 and 02 and then all of a sudden 03 is mobile and then you have 04 and 05 etc [local numbers]. So to have a numbering plan in place, the MoT decided that this needed to be harmonized. The first step was that they restudied the fixed line network so you have to dial an area code and then the number. Now, 03 will be put aside and used later in the fixed line network. The other reason was that, at the moment, [the MoT] had to introduce a new number block for one million new numbers… So we released 70 [in June] which you now have and you will have 71 and if the market ever grows to 100% [penetration] you might have 72.

Executive: What is your biggest concern about the switchover?

IB: Well it is not a big concern, but there will be some outages in some systems because they have to migrate. This is just a fact of life that we have to do. One of the things that will be affected is the Intelligent Network for prepaid subscribers. In any event, we are now determining with suppliers at which hour we will be doing something, and we will send out this schedule to customers. My expectation is this will be a very small issue. And we will compensate if there is some loss.

Executive: Is the introduction of new numbers –the 70 prefix – helping to bring down Lebanon’s notoriously high mobile rates?

IB: The MoT decides on the prices, not us. After 14 months here, I have said this a million times: it is not us. Each and every new service or tariff change we need to ask approval. We do have the expertise in house to act as a consultant to the government to say ‘if you lower the prices by XYZ then we can predict to you the following customer take up.

Executive: You can show them this. Have you shown them?

IB: Sure….but you have to look at the other side of the coin, which means what is the investment per subscriber and how can I recoup that investment. You have to study your addressable markets, then you have to see what the revenue stream is for the government… all while investing for these additional customers. So these calculations are not on the back of an envelope. You can say, for example, ok we estimate the market growth at 30%, which means for the government that the investment will be so much. And that investment needs to paid from the revenue stream which, at the moment, goes straight to the state budget.

Executive: So even if the government wanted to drop mobile prices tomorrow and expand the customer base, the network itself is just not ready for this?

IB: First of all this network is old, so the first calculations that you have to do is to see how you have to replace network elements – we have to replace quite a bit of the network, for the existing customer. Second, you have to look at services you want to offer to your current customer base. If we want to go to the 2.5 generation G – the EDGE technology – at the moment a lot of the network cannot support it. Then, the third thing is that we want to have a bigger uptake of new customers so we would need to build out to cater to this [lower level] market segment…. My top priority is the replacement of network elements, while doing this we can also add capacity itself.

Executive: It has been more than a year since Alfa came to Lebanon, how has business been thus far?

IB: The first year after the take-over has been a challenging time starting with the ramping up of the number of personnel. As you might remember, we lost 57% of the employees when we arrived and had to start recruiting at great speed, then of course, all recruits had to be trained on the job, which was and is a great task and achievement for everyone involved. Then, there was the rebranding from Cellis to alfa which involved over 50 people. That said, from a management and operational point of view, I’m quite happy. We have increased subscribers by 15% and also increased our roaming partners by 13%. Now, what we urgently need is investment in replacing equipment and expanding the network, as I said, to cater to the continuous growth of subscribers. Also, alfa wants to take the next step in launching more data services, again, a project that needs time and substantial money but will support the development of the economy. To a certain extent, I compare Lebanon to the Netherlands where I’m from: both are trading companies really… and traders need the newest business tools to make sure they are on the cutting edge.