Interview with new CEO of Vip mobile, Beta News Agency

Mr Thanasis Katsiroumpas, CEO Vip mobile

1. You have been working across Balkans and Central Europe in last 15 years, what are your impressions on the regional telecommunications market?

Telecommunication industry is one of the globally fastest moving sectors, so Central Europe and Western Balkans are not an exception. Trends driven by customers needs are changing incredibly fast, and you need to always stay alert to be able to keep track and stay ahead of competition. Telco sector is also one of the major economy and GDP drivers of every country, and I can say that this fact is well recognized in the region. Investment plans of telco companies is quite aggressive, they heavily invest in technology, open new job posts and drive higher usage of new services. Regulatory bodies succeeded in reducing bureaucracy and are focused on the market development approach. I hope that Serbia will undertake more steps to align its regulatory framework with EU best practices.

2. The majority countries where you previously worked are EU members or candidates for EU. What are the benefits and challenges of this status in telecommunications?

The most important thing a regulated market such is EU brings is a clear and predictable environment which is of an outmost importance for every business operation or investment. Regulated market oriented toward fast, efficient and sustainable development adds up to country’s economy and competitiveness. Also, I see no challenges other than increased competition makes you always strive to be more competitive and better which is, again, for the benefit of end customers.

3. How do you assess Serbia telecommunications market and its potentials for development?

Serbia is still a developing market for mobile telecommunications with a good potential. Economic crisis has slowed it down and also 10% tax on mobile phone usage has negative effects on customers, operators' financial results and investments in the sector. Instead of punishing our industry Serbian government could ask all sectors to take fare share in difficult times. I was told that all three mobile operators had these initiatives towards respective ministries last year before this burden was introduced. Recently we also jointly urged Government for the mobile tax abolishing before the end of summer.

Capability of providing modern telecommunication services is also connected to the quality and capacity of IT infrastructure. Investments and improvements of IT infrastructure, like an optical transitions, mobile broadband or digital dividend would have a great positive influence on development of many other business sectors.

4. What are the advantages of Serbian market and what are the main differences between market in Serbia and in the region, i.e. Bulgaria, Romania, Greece and other countries where you previously worked?

In a comparison with other countries in the region, there are things that work better here, such as paying parking fee via SMS. In Serbia, in almost every major city, you can pay parking via SMS, whilst in many countries in region it still does not exist. Electronic recharge of customers' prepaid accounts is also very simple and good solution.

On the other hand, your first neighbors are exposed to the most up to date product and services sooner than Serbian customers and can use the most advanced services thanks to well developed IT infrastructure and EU regulatory framework. Serbia is being oppressed by slow and heavy red-tape and enormous paper work that takes so much time and obstructs business operations. For example, mobile phones that got the attest in the EU need additional certificate from the Serbian authorities, which significantly slows down the introduction of the latest devices to the market and increases the cost to the end-user

5. What do you expect from the new Law of electronic communications?

Bringing the Law that is harmonized with EU regulations is definitely very welcome. The Law should bring high standards at the field of market analysis procedure, customer rights, certification process, two phases proceeding decisions, technological neutrality of radio frequencies, VAS services.

I expect that, among other things, the Law will move telecommunications from too much paper work to more innovative business and market approach, so that domestic customers can enjoy all services and innovations already implemented in the region. For instance, MNP service would be customer friendly with a procedure that requires only one stop for changing operator and 1 day procedure. Current Bylaw foresees complicated procedure and it is not in line with the recent EU directive.

In addition implementation of the Law might be even more important than the regulation itself. We often face a situation that local authorities tend to differently understand the same regulations which makes doing business in Serbia even more challenging.

6. What do you think about Vip’s achievements so far?

Despite fierce competition, difficult situation in the country’s economy and additional mobile tax burden, Vip achieved a remarkable growth. It is already well organized and well established company, bringing true alternative on the mobile market, stronger competition and better conditions for customers. At the end of March 2010 Vip had over 1.164 million customers and 12.2% market share. At the end of Q1, negative EBITDA is reduced to EUR 5 million, and revenues are increased by 51.1% to EUR 23.2 million.

Thanks to well selected, right offer for each customer’s segment we managed to ensure further market share and revenues increase, and we plan to grow this further.

7. Are you familiar with Serbian customers’ attitudes in mobile communications? In what way they are different in comparison to customer’s habits in the region and EU?

Customer’s habits are pretty much similar everywhere in Europe. Serbian customers are well informed and become more and more demanding. They follow international trends and accept new services and devices well. Also, they carefully monitor and compare prices, tariffs and services, so Vip is always trying to have the most competitive offer.

I’ve noticed that a lot of business people here use BlackBerry in order to efficiently respond to their business tasks even when they are not in the office. Last year we have introduced HTC phones with innovative Android platform, which are also well accepted with the customers.

Still, majority of customers are using only basic mobile services, such as voice and SMS, and we are encouraging them to become more aware of the benefits of more advanced solutions but to offer it by favorable prices. Just to give you one example, our postpaid tariffs contains a lot of free monthly MB for internet surfing and data transfer and many latest devices can be bought for the price of 1 dinar. Also, I’ve noticed that in Serbia people send much more SMS than in other markets.

8. What new services will Vip offer until the end of 2010?

We are leaders in a smartphones segment and that obliges us to offer even wider range of smartphone products in Serbian market and continue being devoted to developing Android platform technologies. Also we continuously invest in our state of the art network across Serbia. I’m certain that customers will have enough reasons to be satisfied as they can expect much more pleasant surprises to come.

9. Should customer expect the trend of better services and lower prices to continue?

Vip is constantly hearing the market, trying to develop and present exactly what our customers would want and need the most. For instance, we were the first who enabled customers to talk for free in our network. For the summer season, we have prepared the most competitive roaming containing free minutes and data packages for communications across Europe. I see no reason why we should not continue with this trend especially after 10% mobile tax will be abolished and purchasing power of customers increased due to the country's economic recovery.

10. In your opinion, what is the future of mobile telephony? Are advanced services and handsets really useful in everyday life?

Market trends are different and in constant change, but on the global level we see them moving to new innovative solutions and all-in-one user-friendly products. Now, consumers want more advanced efficient phones with new platforms, such is Android, enabling them to always keep track with the world, business, all sorts of information, friends etc. That need will not disappear and so called smartphones will be more and more popular as we see this trend in Serbia as well.