The chief executive of Smart Axiata has turned the company into a technology giant in Cambodia and connected nearly six million people to the mobile network
Thomas Hundt arrives dressed casually in a blue Polo shirt and slacks. The Smart Axiata chief executive has more than a passing resemblance to a young Bono – sans shades and with a mission not to save the world, but more modestly to make sure every Cambodian is connected to the mobile internet.
He has almost accomplished that. Today Hundt, 37, is one of the Kingdom’s success stories after arriving in 2008 on what he describes as “on paper, at least, almost a suicide mission”. Since then, he has taken a one-man show to heights that seemed impossibly ambitious – 800 employees, close to six million subscribers, the second biggest telecommunications provider in Cambodia.
Born in 1977 in former East Germany, Hundt was 13 when the Wall came down. “Everything changed overnight,” he said.
After the first wave of enthusiasm about reunification, there were years of depression and unemployment. But Hundt got his break at 19 when he joined the engineering and electronics giant Siemens after finishing his one-year compulsory military service. “Siemens had its own education programme at the time – a degree for grooming its own leadership,” he said. “It had very rigorous selection criteria. Where I lived there were 2,000 applicants and eight were selected. I think Germany-wide there were [between] 8,000 [to] 10,000 applicants. [Only] 20 to 25 were taken on board.”
During the course of the two-year programme, Hundt trained in sales, finance, accounting, commercial law and business administration. “After two years, I had a good sense of how Siemens worked overall, and I was relocated to Munich, where I worked with the Mobile Communications Division,” he recalled.
It was now 1998, and the early days of mobile phones. “I remember getting my first mobile in 1996 – it was the size of a brick,” said Hundt.
After helping Siemens with its telecommunications rollout in Taiwan, he spent a year in Shanghai. He was then working in the Commonwealth of Independent States (CIS)– the republics formed after the break-up of the Soviet Union.
By chance, in the course of his travels in the CIS, Hundt met a team of investors who had just acquired a licence in Cambodia.
They needed someone to build a team for them. The first project meetings took place in Phnom Penh in early 2008. In July that year, Hundt moved to Cambodia permanently.
“I was the only employee,” he said, adding: “We looked like we were programmed for failure – fighting in a market of 15 million people with eight competitors.”
Despite the magnitude of the challenge, Hundt was fascinated from the start by the absence of branding. “Everyone recognised operators by their prefixes, so we created the green Smart logo, and we put it everywhere,” he said.
In those early days almost everything about Cambodia’s telecommunications sector was “less than ideal”. Coverage was bad. It wasn’t possible to call from one network to another. Call charges were too high, leading Smart to embark on an aggressive tariff concept.
“We focused on branding and customer service – we were the first to introduce a 24/7 free-of-charge call centre,” said Hundt. “We introduced Smart stores that were open seven days a week – things nobody here had done before.”
Smart’s first major milestone was the acquisition in 2010 of Applifone’s Star-Cell brand, which was privately owned in Cambodia. “When we took Star-Cell, we had 600,000 subscribers, and they had 300,000, but they had more stations, including a 3G spectrum,” said Hundt.
By June 2011, Smart was aggressively promoting 3G. “Our competitors were one to one-and-a-half years ahead of us, but we took the position that Smart stands for affordable telecommunications, so we were aggressive on pricing for data,” said Hundt, adding that by the end of 2011, the company had reached three million subscribers.”
Then, in December 2012, came the clincher – a strategic merger with Hello Axiata, which became effective in early 2013, making Smart part of the Malaysian Axiata Group. “Smart was on the tipping point of being the number two operator in Cambodia, but the merger with Hello gave us 5.5m subscribers.
Today, Smart has 27 shops nationwide and about 5.8m active customers. As smartphones become increasingly affordable, the growth area is now data – particularly 4G, which Smart has been rolling out in Phnom Penh since last year.
“Most of our competitors underestimated us,” said Hundt. “They thought we would fail, so we were under the radar for quite some time.”
Looking back on his mission impossible, Hundt briefly has the look of someone who is still surprised at what happened. “It is relatively obvious we should have failed. [Instead] we broke even in two-and-a-half years, and went into profit, which in this industry is remarkable,” he pointed out.