Now with more than five million customers, the merger of Smart and Hello has positioned the mobile operator in the number two spot in Cambodia’s telecommunications market – but the new goal is to be number one according to Smart CEO Thomas Hundt.
“One day we want to become the number one mobile operator in Cambodia. We are number two, so if we don’t set the target now, when would we?” Hundt said in an interview Tuesday.
The merger puts Smart still behind Metfone which has an estimated seven million subscribers and ahead of Cellcard which has nearly four million subscribers.
Hundt and his team had been distressed two weeks ago when the government announced Prakas 232 which sought to prevent Smart-to-Smart phone call rates at less than 4.5 cents per minute.
Speaking in his office Tuesday, in the aftermath of the announcement by the Ministry of Posts and Telecommunications (MPTC) to abandon the enforcement of the Prakas, Hundt said he was happy with the decision.
“We welcome the decision by the MPTC to suspend the implementation and enforcement of the regulation that would have prohibited the promotions that we have had in the past. We understand that these announcements mean that the minimum price floor is de facto abandoned,” he said.
It had been a tense two weeks as the MPTC Prakas caused discomfort at Smart as the telecommunications company began to accelerate a range of post-merger systems integration projects.
Hundt expressed his gratitude and relief that Smart had been enabled by the MPTC to continue to offer low-cost service between Smart customers.
“We are happy being able again to offer the tariffs that are most affordable and attractive to our consumers and we would like to express our sincerest thanks to our customers for their continued support during that time,” Hundt said.
“We are in favour of a free-market economy, and we are here to serve the people of Cambodia, and we are aiming to offer the most affordable telecom services,” he said.
Hundt, who spend his childhood years in the former East Germany, has brought a set of standards of attitude and work ethic with him to the Cambodian telecom scene.
“I’m a pretty accurate and demanding person, and this is spreading into the organisation. In our business, likewise in all things, there is no such thing as fast enough. We are in a very dynamic industry and situations can change within hours and we need to be able to react on that. Now we are not a small organisation anymore. We are a pretty big company,” he said.
On December 19, 2012 Hundt and Simon Perkins of Hello announced a strategic merger of Smart Mobile and Hello Axiata, which became part of the Axiata group.
By February 22 this year, the new Smart brand was introduced, using the Smart logo with the Axiata prism above it.
In the deal, the shareholders of Smart Mobile sold their shares to Axiata, Hundt said. Despite the logo changes and the integration of the two systems, he looks at it as the same game, with the new shareholders having the same set of expectations.
“What matters is that the ambitions and the expectations have not changed. We still work for our shareholders and stakeholders including and in particular our customers, and we want to grow by enlarging our market share.”
“Now the two companies have been operationally and functionally merged and are one company. The product offerings are largely harmonised already and the networks are in the process of being harmonised,” he said.
Any old Smart Mobile or Hello SIM cards or scratch cards may continue to be used, he said.
“The clear commitment is they will be available continuously at any time and they can be used to top up any of the Smart numbers, so it is not limited to your former Hello or Smart Mobile number.”
Smart has a process now under way to harmonise and extend the two radio networks “and a massive rollout of further capacity and coverage in both 2G and 3G,” he said.
At the time of the merger Smart had more than three million and Hello had just under two million customers.
The radio transmitting devices of both Smart Mobile and Hello had come from the same supplier and were generally compatible, Hundt said.
Both the Smart and Hello base stations, which are located on the transmitting towers, had their own core networks connecting all the base stations and towers.
Those are now in the process of being combined into a single network.
The billing system and Value Added Services are in the process of being merged into a single entity as well.
Smart now has about 750 employees.
“The cultures of the two companies were not that largely different from each other,” Hundt said of the post-merger environment. “Both companies were performance oriented, with integrity as one of the big values, along with team play, teamwork and open communication”.
Hundt said the core values of Axiata as a performance oriented environment and Smart Mobile culture as a dynamic, energetic and largely youthful environment was evolving into a homogeneous team, based on achievements.
“The way the people are working together and enjoying their time together is remarkable in terms of their team play. They are more than just colleagues.The vast majority are Cambodians and they behave with friendliness and openness. In a company this results in not just collegial relationship. Respect plays a big part in this.”
He said the new Smart organisation was driven to efficiency and quality and was above average in Cambodia.
“There is evidence for this in the appearance of our brand, the brand in context, in our shop and our website. These things are superior to those of our peers,” he said.
Hundt said he’s optimistic about Cambodia’s future.
“During my five years here, Cambodia has changed tremendously,” he said. “The development has changed not only in urban centres, but in rural areas, with new paved roads, electricity and upgraded school systems. Phnom Penh is becoming a bustling metropolis. The situation is definitely improving and more and more people are benefiting from the development; there are still challenges but the direction is improving.”
He says the post-merger activities have made tremendous progress in systems integration.
“We are creating a combined spirit and value and we are well engaged on it,” he said. “We cover all 24 provinces with 2G and 3.75G. We have 95 per cent of population coverage and we will cover 98 per cent in next couple of months.”
Hundt said about 37 per cent of phones sold in Cambodia were smart phones and the figure was 50 per cent worldwide.
“You can get smart phones now for less than $100 and people are using them to connect to the internet.”
“For the vast majority of people, the mobile phone is the primary device to go into the internet. We see tablets and increasing numbers of people with two devices, both connected to the internet over mobile. There is exponentially growing data consumption right now and that won’t change.
"The challenge of all the industry players is to cope with that demand. On this point Smart is investing massively in its data network with 4G LTE probably coming,” he said.
Hundt serves as a board member in Eurocham, as vice president of the German Business Club, is an AIESEC partner and supporter and a supporter of Junior Chamber International.
