The air in the room crackles with energy and power as technicians and engineers scurry back and forth before rows and rows of flat-screen monitors flashing numbers in red, blue and white, 24 hours a day, seven days a week. From the meeting room behind the ceiling-high glass, giant projectors flash graphs, charts and maps that track the pulse of millions of people as they chat, email and talk across the country.
Jon Eddy Abdullah, the chief executive of Total Access Communication (DTAC), waves a hand across the room.
“From the network control room, we monitor transmissions nationwide, every minute in the day,” he says.
DTAC, the country’s second-largest mobile operator with more than 23 million subscribers, is in the midst of a massive upgrade of its network infrastructure aimed at supporting the firm’s business growth through the rest of the decade.
Why? Only several years ago, mobile phones served primarily as a tool for voice communications and SMS. Now, the explosion of smartphones such as Apple’s iPhone and Samsung’s Galaxy line, social media networks such as Facebook and the growth of bandwidth-hungry applications and services has put more strain than ever on GSM networks developed over a decade ago.
“We’re changing an average of 225 base stations per week and expect to complete the upgrade for the entire nationwide network this year,” said Mr Abdullah, referring to DTAC’s core 1800-megahertz GSM system.
DTAC is also rolling out an 850-MHz third-generation (3G) wireless network, with 5,000 stations installed nationwide by year-end. The firm has budgeted up to 9 billion baht for capital investments for 2012.
“We have five years left [under DTAC's concession contract with CAT Telecom],” said Mr Abdullah. “We want to invest in both 2G and 3G. We’re investing in the entire customer base.”
Demand for 3G network services has skyrocketed with the proliferation of always-on smartphones. Both DTAC and market leader Advanced Info Service (AIS) are rolling out limited 3G networks while awaiting plans by telecom operators to auction new 3G licences using the 2100-MHz spectrum later this year.
DTAC has seen data traffic increase four- or five-fold since it launched 3G services one year ago. The company currently has 850 3G stations in Bangkok and 2,300 nationwide.
Mr Abdullah said DTAC’s plan to improve both its existing 2G network and invest in its 3G network is a “strategic move” that will give the company an advantage over both AIS and third-ranked TrueMove.
AIS, with more than 34 million subscribers as of March 31, has been struggling with call congestion and dropouts due to network constraints on its 900-MHz spectrum. TrueMove, meanwhile, with 19.3 million subscribers at the end of the first quarter, has been promoting its TrueMove H 3G service in Bangkok and other urban areas.
Regardless, Mr Abdullah said the rollout of 3G on the 850-MHz band is a stop-gap measure, and that a genuine change in the industry’s infrastructure will not arrive until the auction of new 3G licences on the 2100-MHz spectrum.
Both AIS and DTAC are pushing for the 3G licence auctions to not only gain breathing space to roll out new network technology but also escape their existing revenue-sharing concession agreements with the two state utilities _ TOT Corp and CAT Telecom.
DTAC currently pays a 30% concession fee to CAT Telecom compared with 25% for AIS. Rising regulatory fees have been a factor in the drop in DTAC’s recent financial performance _ first-quarter net profit was 2.99 billion baht, up by 25.9% quarter-on-quarter but down by 10% year-on-year.
Network disruptions also affected the quarterly results, said Mr Abdullah.
“First-quarter gross sales showed some fallout from the network troubles, but second-quarter sales have come back,” he said. “Actually, what we saw was users switching away from DTAC as their primary SIM [due to the network problems]. Now the trend is reversing.”
In December and January, DTAC suffered a series of network outages due to technical database problems and a cut in its fibre-optic cables running to the southern provinces.
Mr Abdullah said DTAC has since “doubled its risk-prevention measures” and built more redundancy across the network.
The outages, which spurred an outcry on social networks among customers, also forced DTAC to re-examine its communications policies and how it treats customers overall.
Mr Abdullah said DTAC is in the midst of “completely overhauling the organisation”, with the goal of streamlining work processes and realigning operations to focus on customers.
“We’ve also rethought our core values. Who do we want to be? We want to be the good guy, the cool guy, the guy at the party who is in the know,” he said earnestly.
“Fresh, innovative, cool _ we’re cool, we’re trendy. That’s the goal.”
Mr Abdullah said it starts with a simple question _ would customers recommend the brand to their friends and family?
“Our biggest obstacle is our processes are not customer-focused. We’re stuck in time and too aligned to voice and SMS rather than a model based on applications, data or [smartphone] devices,” he said.
More than 20 transformation projects are underway, with regular high-level meetings held each month.
“What I’m telling people is not to spray perfume on things. If there’s a problem, then we have to fix it,” said Mr Abdullah.
The transformation is most evident with DTAC’s retail strategy and the planned revamp of its 300 stores nationwide in a project that borrows a page from Apple’s wildly successful retail stores.
“People want to buy the top-10 devices. Our goal for our stores is to split 50% retail sales, 50% services. Previously, most of our stores focused on service,” said Mr Abdullah.
He said the growing sophistication of modern smartphones and their integration with email, chat and social media accounts have increased the need for personalised configuration services right at the point-of-sale.
“We’re offering a full-service package bundled with our 3G services, but we’re not pursuing the mass market. Our retail strategy isn’t going to compete on volume,” said Mr Abdullah.
“But modern phone operating systems are complicated. The idea is for us to control the experience, to help ensure that it all just works.”
The strategy is showing results, as DTAC’s first-quarter sales of handsets and starter kits jumped by 116% quarter-on-quarter to 2.95 billion baht, driven primarily by the launch of the new iPhone 4S.
News from the Bangkok Post