On 01 June, GO appointed Attila Keszeg, a Hungarian, as Chief Executive Officer. He has had a dynamic high profile career; prior to this appointment, he was Senior Vice President Commercial at Deutsche Telekom AG, responsible for the overall business to consumer activities in 12 countries. His experience also includes five years as General Manager for Red Bull Hungary. He joins GO at a most interesting time. The Malta Business Weekly caught up with him and asked him to share some insights.
Q: You have made quite a transition from large organisation with oversight for a number central European markets to a relatively small, Mediterranean market, albeit one with a regional dimension. What was it that attracted you to GO?
AK: Malta is a respected member of the EU, and rapidly experiencing many of the trends and influences one can observe in mainland Europe. The Maltese telecommunications market will soon arrive at a crossroad, and require a transformational effort from market players to live up to the twin challenges of expansionist global players and rapidly evolving customer demand. After several years at the Head Office of a multinational company, I was looking for a CEO level operational challenge. GO is a great company, with excellent fundamentals and experienced people. I am looking forward to making my own contribution to GO's ongoing transformation as the best service provider in Malta.
Q: What are your first impressions of the market, and the people/culture here in Malta?
AK: Clearly, Maltese society still embraces strong traditional values, the result of your history and enviable heritage. People here care about each other. However, the Maltese are resilient fighters, survivors who can rally round and protect common ground. One observes a strong work ethic and high standards. GO is not only an essential part of the local fabric and a fantastic national brand; it sums up what Malta is all about - tough, rooted in strong values, outward-looking, perfectly capable of rising to the challenges of the future.
Q: All the network operators seem to claim they are the best/fastest etc. What's your own view, how does GO compare say on mobile network speed and reliability?
AK: The telecommunications industry is driven by technology, which evolves continuously. As operators inevitably follow different investment cycles, their capabilities continue to change. There are, however, two important facts that we need to be clear about. Firstly, fibre-to-the-home, which only GO is rolling out is the best available fixed line technology in the world. All major global players are investing in fibre. Some of our competitors have broadly available cable coverage, which is good technology, but one generation older than ours. With this technology they are still able to temporarily claim a speed advantage in those areas where fibre has not yet been deployed. But in areas covered by fibre our speed advantage is undisputed and will remain so in the future.
Secondly, GO has the fastest, broadest, best mobile network in Malta. This is a fact which was recently confirmed by Net Check, an internationally recognized independent certifying agency. GO's mobile network is superior, particularly when it comes to data, because ours is the only network which is entirely connected by fibre. Our major mobile competitor is talking about future capabilities, and some test operations in some areas of Gozo. But the truth is that GO is ready to launch 4G+ as soon as the regulatory bodies allocate the necessary frequency bands required for enhanced services. Going forward, GO is determined to ensure we remain the fastest network across Malta.
Q: GO has embarked on some pretty major investments such as fibre to the home, is this on track and will you pursue it further?
AK: GO's commitment is to bring the best available technology to Malta; we always did, we always will. Over a span of five years or so, our cumulative investment in fibre and 4G technology as well as in systems and IT infrastructure is indeed significant, exceeding €200 million. This makes us the largest investor in the telecommunications industry in this market and probably one of the largest investors in the Maltese economy. Additionally, we are also investing in Maltese IT companies, and expanding GO's skill base. GO employs either directly or indirectly, over 1,200 Maltese people, and we enjoy the trust of some 8,500 shareholders via the Malta Stock Exchange. We always were - and aspire to remain - the largest investors and employer in our sector. As a leading Maltese company firmly rooted in the local economy, GO is very committed to Malta's ongoing prosperity.
Q: You arrive at the helm of GO at quite an interesting time: your two major competitors are in the process of joining up to compete with GO and reshape the market. What are your views on this development?
AK: Despite our competitors' dominance in their respective sectors, I suppose this move by them is in a way recognition that GO is also a sound player in the market that is able to deliver what the Maltese consumer needs. GO welcomes competition; we believe that it leads to better services and triggers more timely and larger investments from which everybody in society benefits. Our history demonstrates our investment approach to competition. We built a mobile network to successfully compete against Vodafone and likewise invested heavily in TV infrastructure and content to compete effectively with Melita. The proposed Melita takeover of Vodafone indicates that our competitors have chosen a different approach.
Q: We are, effectively, heading towards a duopoly of two large quad play operators. Presumably it will be hard for any new entrant to make an attempt to penetrate the market in the foreseeable future?
AK: Well, a duopoly is an interesting phenomenon. One first has to see whether the Maltese competition authority will approve the deal or not. And, if so, what conditions they would impose on the takeover parties. I trust the Maltese regulatory system, and I'm sure they will prevent market dominance in fixed or mobile telephony. It is certainly not in the Maltese consumers' interest for there to be an unbalanced situation in the market as this would have a negative effect on competitiveness. This in turn would affect investment levels and the introduction of new technologies. What incentive would an artificially created dominant player have to do anything, other than milk the market, and how could the lesser player meaningfully change the game? There is also the threat of price increases. How is Melita going to recover the cost of buying Vodafone? It will use its acquired dominant position in the mobile market to raise prices. If that happens, then it opens the door for prices across the board to go up.
Q: What's your guess of the way customers may shift following the merger/acquisition - would you expect customers to migrate to GO or, conversely, may GO's customers be tempted by the new combined offering?
AK: The main point is that Vodafone in Malta - as we know it today - will cease to exist because, as a company, it is leaving Malta. The Vodafone brand name may well be retained, only because the new company would pay franchise rights. The new company will no longer form part of the Vodafone Group and its accounts will not be consolidated into those of the Group. So, in such a scenario, where Melita is essentially taking over Vodafone's Malta business, the main decision is for existing Vodafone customers, and whether they will be happy with Melita customer service or not. GO's customer service is always a priority area and we do not envisage any significant loss of customers ourselves. On the contrary our doors are wide open to welcome new customers who may now be looking for new options.
Q: Further from our shores, the last set of published accounts show that GO's subsidiary in Cyprus, Cablenet, is contributing EBITDA and new income streams to the Group. How do such developments fit into GO's overall strategy?
AK: With the market in Malta largely saturated, Cablenet remains a crucial growth engine for the GO Group. I've already attended a board meeting in Cyprus and must say that it's an excellent company with a committed and ambitious management team. We are focussed on continuing to improve service levels and increasing our customer base in areas where Cablenet has coverage. But we are also taking decisions to ensure continued expansion and growth in the coming years. I expect Cablenet to remain on a growth trajectory, nicely complementing GO's overall performance.
Q: What are you main strategic priorities going forward?
AK: We have already deployed the fastest and best 4G mobile network in Malta. We are in the middle of deploying the best available fixed line technology to ensure high speed broadband and high quality TV services. As such, GO is well placed to provide the best speeds and highest quality services in Malta. Investing in infrastructure is the first step. But our principal aspiration is to offer businesses, households and individuals the solutions to their telecommunications needs. In parallel with new services, we have the ambition to deliver the best customer service on the Maltese market. We are Malta's original telecoms company and we want to be the first choice for customers.