Mr. Mahtab Uddin Ahmed has been Chief Executive Officer and Managing Director of Robi Axiata Limited at Axiata Group Berhad since November 1, 2016 and served as its Chief Operating Officer until November 1, 2016. Mr. Ahmed served as the Chief Financial Officer of Robi Axiata Limited from 2010 to 2014. Prior to joining Robi, he spent 17 years of his career with Unilever where he held various business and finance leadership positions including the post of Finance Director in various operating companies like Unilever Pakistan, Unilever Arabia and Unilever Bangladesh. He is also a Fellow Member of Institute of Cost and Management Accountant of Bangladesh (ICMAB), FCMA & CGMA of Chartered Institute of Management Accountants (CIMA, UK). He holds a Bachelor of Honours and Masters in Accounting from the University of Dhaka, Bangladesh. He is also an alumnus of the Harvard Business School (AMP 190).
A session with Mahtab Uddin Ahmed, the Chief Executive Officer (CEO) would enlighten anyone in many ways. Being the first ever Bangladeshi CEO of any major telecom operator of the country, Mr Mahtab not only knows about the ins and outs of Bangladesh’s telecom sector but also knows about the hidden secret of attaining leadership of highest standards.
And the best part is that he wouldn’t mind sharing his secret as he believes in dissemeniating information and knowledge for the greater good. The Fintech team recently went to his office at the Robi headquarter in Gulshan to pick his minds. He didn’t disappoint. Here is an excerpt of that interview for our Fintech readers.
FINTECH: What is the vision you have for Robi and how will you realize that vision?
MU Ahmed: Our vision is to be the next generation digital company. Telco business is transforming rapidly all over the world; Bangladesh is certainly not an exception to this norm. We’re observing tremendous growth in data and digital service-oriented businesses. In order to lead the ensuing digital revolution, we have chalked out a number of organizational changes.
We’re promoting agile working culture within Robi to facilitate rapid innovation, engaging with the employees to develop a learning culture based on digital technologies, adding a slew to digital products such as digital advertising solution, mobile financial services, enterprise cloud solutions, partnering with specialized tech companies to provide IoT-based solutions and offering a whole range of digital lifestyle services while focusing on strengthening the corporate governance framework.
In addition, our Corporate Responsibility (CR) initiatives such as the mEducation platform: Robi- 10 Minute School (The largest online school of the country) is providing quality education content to the millions of students across Bangladesh for free and youth awareness programme named “Internet4U” is enlightening the youth about how to use the internet effectively and ethically. These digital-based CR initiatives are vital in our pursuit to become a digital company. However, we’re still at the early stages of this journey, but the progress made so far is quite encouraging.
FINTECH: Do you think Robi is heading towards right direction in terms satisfying the three major stakeholders-customers, government and the operator itself ?
MU Ahmed: If I have to talk about customers, I would say that they are clear winners here. It is true that customer’s expectation is always high but you just cannot question whether those expectations are realistic or unrealistic. The customers in Bangladesh are getting the services at one of the lowest rates in the world. We have only 1% call drop whereas the International Telecommunication Union (ITU) allowed 2% call drop for a mobile operator. If you go to even at the developed countries across the world, you will see that 99% coverage is an unbelievable thing over there. Bangladesh has 99% coverage. Yet the customers are still not fully happy. I however see this in a positive way because we improve ourselves constantly due to their unhappiness.
The government is also a winner because we- the major operators- are working on to build digital Bangladesh. More than 10% of the government’s revenue comes from this industry. Besides we have significant contribution in the country’s GDP.
On that note, if I have to talk about the operators, I can tell you that aside from one operator, no other operators are making profit now. Now if we are going on for years without making profit, then it will be very hard for us to survive.
So out of these three parties, there are still challenges for the operators in terms of getting benefit and satisfying ourselves.
FINTECH: You have worked in different countries with telecom operators. You worked in Srilanka with Dialog-another Axiata operator. What are the major differences between Dialog and Robi? Why they are so successful?
MU Ahmed: Dialog has everything. Staring from mobile money service to TV license including broadband, NTTN, Dialog has the license to provide all sorts of services. So they can control a lot of things and has a good number of channels for generating revenue. In comparison with them, Robi has very few things. We used to have NTTN license but now it is given to a third parties who are making profit whereas Robi is not. We also used two own IGW, ICX, IIG but now we not.
FINTECH: Bangladesh is an emerging market. How do you look at being a telco in an emerging market and, at the same time, address the needs of young customers with digital services?
MU Ahmed: A study conducted by the Boston Consulting Group (BCG) showed that the middle and affluent class of Bangladesh will account for around 17 per cent of the population by 2025. The study also found that although most transactions are in cash, more consumers would be shifting towards mobile payment, creating an opportunity for reaching households through digital services. The study also found that 81 per cent of the consumers read online while 66 per cent of them search for product information online.
As per World Bank data, around 36 per cent of the population falls under the age bracket of 15 to 34, otherwise termed as millennials, the generation ideal to become digital consumers. According to Price Waterhouse Coopers, Bangladesh is set to be the 23rd largest economy of the world overtaking the Asian tigers like Malaysia and Thailand. All these indicators suggest that the demand side of the digital industry is also on the rise in the country.
FINTECH: How would you characterize the recent merger and its success to date?
MU Ahmed: The merger between Robi Axiata Limited and Airtel Bangladesh Limited was the largest ever in the history of Bangladesh. It also happens to be the first ever merger in the telecom sector of the country. Following the merger, the merged company is operating as Robi Axiata Limited; Robi and Airtel, are two separate brands of the merged company. The merged company started its commercial operation from 16 November 2016. As promised earlier, we had started offering the on-net call rate facility to the 32.2 million subscribers back then. In Bangladesh, the off-net call rate is higher compared to on-net call rate. In this connection, the merger had instantly provided savings opportunity for the Robi and Airtel subscribers; more so for the Airtel subscribers since their subscriber base was much smaller than Robi’s prior to the merger.
Following the successful network integration, Airtel subscribers are now enjoying network coverage in 99 per cent of the geographical area of the country, just like the Robi subscribers. Before merger, Airtel subscribers were concentrated in mostly the urban areas only, since they had limited network coverage. This has encouraged many subscribers to choose Robi and Airtel as their preferred brand in the highly competitive market. At the end of the second quarter of 2017, the subscriber base of the merged company now stands at 39.6 million. As projected, the merger is clearly bringing in the benefits for our business.
FINTECH: How was the integration process? Did you meet your goals?
MU Ahmed: Merger is a complex affair by any stretch of the imagination. Globally, we have observed that the merged company loses up to 25 per cent of their subscriber base during the network integration process. This mainly happens due to the lapses in the level of Quality of Service (QoS) that occurs while integrating the network. In this backdrop, we’re extremely happy to see that we have almost completed this very complex technological process without any hitch. Rather than a massive slide in subscriber base, we have had millions of subscribers joining us, as mentioned earlier.
Let me give you an example: our biggest challenge was to complete the network integration in the capital city, Dhaka, considering the large number of subscribers who are based in this geographic location. But, we completed the network integration even in this most challenging location without receiving any customer complaint; this just goes to show the level of expertise we have brought in to complete this vital task. We started the network integration project in areas where we have comparatively less amount of subscribers. Gradually, we integrated the network across the entire country.
Integration of the human resources was one of our prime concerns in the post-merger scenario. Here again, I thought we dealt with it in the best possible manner. We accommodated all the employees from Airtel who decided to join the merged company. While our competitors are laying off people, we were taking on a large number of employees from Airtel. I can proudly say that all of them have been given a career path to follow in our much bigger company. This certainly adds to the strength of Robi, post-merger.
FINTECH: Tell me about your revenue and subscriber growth details in Bangladesh. What is your forecast for future growth and how will you achieve that?
MU Ahmed: Robi has added 3.4 million new subscribers in Q2 2017 to reach 39.6 million, representing 29.2 per cent subscriber market share. The company witnessed solid growth in both voice revenue (YoY +36.5 per cent) and data revenue (YoY +106.9 per cent) driven by the merger resulting in overall revenue growth (YoY +35.1 per cent). Data revenue growth was propelled by significant investments in network coupled with customer-oriented data offerings to drive 3.5G data usage. Robi achieved operating profit (EBITDA) margin of 15.9 per cent and PAT was recorded at BDT 685mn in Q2 17 with the margin of 4.1 per cent. Although, the merger is translating into revenue growth for both voice and data service, the hefty investment for post-merger network expansion and heavy tax burden is holding back the company from meeting its potential. We expect the next level of growth to be driven by LTE, IoT, Digital products and other non-core but relevant/dependent to telecom products.
FINTECH: What are your plans for product and service evolution?
MU Ahmed: The plan, in a nutshell, is to go Digital. That means, our entire product and service portfolio needs to incorporate elements of digital technology suited to consumer needs. I’m quite happy with the progress made by the company in this regard, so far. We were the first mobile phone operator in the country to have set up a separate division for digital services.
This visionary decision has allowed us to boast a rich portfolio of digital services that includes mobile financial service, mobile phone based utility bill payment services, mobile app-based train ticket purchasing solution, mCommerce solution: shop.robi.com.bd, online ticketing platform: bdtickets.com, online recharge platform: rechargeplus, digital advertisement solution: AdReach, IoT-based vehicle tracking solution: Robi Tracker, mobile application platform: bdapps.com. Besides, we are providing entertainment contents through Robi TV and Robi Screen.
Together with Yonder Music we have introduced Robi and Airtel Yonder Music App- the country’s largest library of local and international music. Airtel is offering specially designed lifestyle solutions for the youth under YOLO (You Only Live Once) community. Airtel’s YOLO community is touring the country with Yonder Music to organize musical concerts. Youth are thronging these concerts in thousands.
FINTECH: How Robi can contribute to Bangladesh’s growing economy? Is this important to you and to the company?
MU Ahmed: We’re very proud of partnering the Government and the Regulator in implementing the vision of Digital Bangladesh. The vision pretty much depends on how quickly we can get the entire population to use the internet as a way of life. As of June 2017, the country has managed to take internet service to 7.33 crore people which translates into the internet penetration rate of 44.7 per cent. It is interesting to note that more than 95 per cent of the country’s internet users access internet through mobile handsets. So, when you consider that Robi has 29.2 per cent subscriber market share, you can imagine the enormity of our contribution to implementing the national vision. Since inception in 1997, Robi has paid more than BDT 193.5 billion to the Government Exchequer.
The entire contribution by Robi along with the rest of the industry players can be summarized by saying that we have brought about significant improvement to life-style of more than 120Mn people through increased connectivity, easy access to information, enhanced productivity.We are determined to continue this partnership as the country climbs the prosperity ladder.
FINTECH: As a first Bangladeshi CEO in a multi-national telecom operator in Bangladesh, what is your personal formula for success? Do you have any advice for our youth?
MU Ahmed: Unfortunately, success is not biased towards Bangladeshi CEOs. But jokes apart, the formula is very simple. Have a clear vision for the future and channel all your efforts towards that end relentlessly. An organization is much like a team sport; being the CEO, I’m like the captain of the team. My primary job is to cascade the vision down to my direct reports and make sure that the the entire company is pulling in the same direction with a lot of motivation. I’m very fortunate to have very dynamic team mates who are very much aware of what is expected of them; that really helps. Being the CEO, I also have to shoulder the role of Chief Motivation Officer as well as Chief Culture Officer for my colleagues. We work in a very dynamic market, where everyone is pursuing their dreams from their respective roles. But being humans, it’s natural to see the enthusiasm waning in trying moments; this is where I have to step in to lift the morale.
For the youth, I just want to say that you have a great opportunity waiting for you. All you need is to acquire the right skills that will be needed for you to thrive in the era of fourth indusrtrial revolution. But, above all the skills, I’d like you to stress on developing your ability to think of your own. You need to be able to find simple solution to complex problems in future. So, allow yourself exposure to good educational materials.
Youtube is a great tool; to me, it’s the biggest university of the world. You just need to search for the right content and concentrate to digest the message. While you need to pick up on the much needed digital skills, you also need to develop abilities to interact with society; because, end of the day, your livelihood will depend on how good you are in solving problem of the society. So, strike a balance between analogue and digital life, don’t blindly indulge on digital life.
FINTECH: What new technology excites you the most today?
MU Ahmed: IoT, Augmented Reality, Artificial Intelligence etc. for sure. The more I learn about it, the more exciting it gets. It truly has the potential to redefine life as we know it. There is hardly any aspect of life that it can’t change for the better. Its commercial potential is just amazing. According to GSMA, by 2026 IOT technology alone can generate $1.8 trillion globally. As Bangladesh is poised to enter the 4G era shortly, the prospects for the technology in the country looks ominous. Another factor that is working in our favour is that Bangladesh will rank among the top ten countries of the world in terms of growth of smartphone usage. Smartphones being the key enabler in the promotion of IoT, Augmented Reality, Artificial Intelligence, we are bracing ourselves for a riveting time ahead.
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